BITCOIN: Monthly and Weekly: 28.02.2021

It has been a very interesting closure of the month today and the week yesterday. The weekly Bearish Engulfing is saying “go down”, but the monthly is kind of chiming in “not so fast”. Let’s explore the hypothesis from various angles:

The January and February candles show an elevated selling pressure at the ends of the months; the large upper wicks support this. At the same time, the monthly RSI is just a tad below the all time high and has nowhere to go but down.
The weekly candles produced a full Bearish Engulfing (including the bottom wick of the previous candle) and it happened on a completion of Head & Shoulders in RSI.
While the weekly is ready to go down, the monthly would allow a little uptick. Perhaps, BTC will be consolidating for 1-2 weeks in the lower half of the red weekly candle before resuming its move down.

Let’s have a look at this from the Elliott Waves perspective:

A detailed analysis of the wave reveals that the wave down is likely complete and it has a 5-wave structure. It is more fitting to be a leading diagonal. If it is so, then it is only wave A of the correction. If we don’t see an immediate downfall from here, I would expect that wave B is on its way. Waves B are the most difficult to forecast, but I would be brave to assume that it could take a shape of flat, would not retrace more than 50% of wave A, and would take a little longer to develop than wave A. And we also remember the new resistance at 51079.
All together and I projected wave B on the Short Term daily chart above that could possibly last for about 2 weeks. Once it is complete, I would expect wave C to take BTC to 28000-30000 area I have been talking about for a while.

Speaking about the bullish perspective, if the price aggressively breaks through 51079 level in a motive fashion, I would consider that the correction is over and the bullish trend to resume. Though the odds are rather slim.

Classical Pattern: Possible Head & Shoulders
Today I analyzed BTC on the 4hr chart and spotted a pattern that would like to share.

At the month closing point, the price bounced up above the neck line – 44267. However, as soon it is crosses and closes below, the pattern would be considered complete and it would allow to project a measured move down to 30296, which would be in alignment with the projection by Elliott Waves/Fibonacci levels. Watch out for 44267.

The longer term chart has not changed and the long term channel seems to be aligned with the projections above.

1. I am expecting the see-saw movements in wave B for the next two weeks between 44000 and 52000.
2. As soon as a daily candle closes below 44267, this would be the first sign for the continued downtrend.
3. A break through 51079 with a back test from above would be the sign for the resumed uptrend.

Good luck with investing!

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