Today $BTC started a rally that I humbly mentioned yesterday and that had very slim odds. Despite the odds, it formed a Tower Bottom pattern and strongly closed above the 8 EMA line. That is quite a message. Let’s explore some possible next steps from the different angles.
The June’s candle is developing under a strong bearish pressure from the Tower Top combo. In order to cancel it and reverse, BTC needs to close June at about 44000, which is not impossible if the rally continues.
From the weekly perspective, if the coin closes above 39500, it would form a Bullish Engulfing and the odds would shift strongly to the bullish side. These days a 2k advance looks like a very doable task for BTC (it is 37500 as I type).
The daily candle formed a clean Tower Bottom, the odds strongly to the bulls.
There are a few possible scenarios to watch:
- A strong momentum continues and BTC makes another similar green candle tomorrow with a close above 20 EMA line. This would likely confirm the new trend.
- There are 1-2 days of horizontal moves (back test of the broken channel). In this case, the closing print should stay above the 8 EMA line.
- While Tower Tops have 70-80% probability of reversal, there is always a chance the combo is canceled. If tomorrow the price declines to below 36000, I would be very cautious.
Odds: Strong Bullish
LONG TERM FORECAST
Note: for the following chart to become main operative, this week needs to close above 39500.
The green is the main count. There are three Elliott Waves’ methods I projected the targets:
- The length of wave V is typically 2 times length of wave I. Thus – $71000.
- The wave IV undershoot the long term channel and there is a possibility of overshooting the channel and extending the wave. Based on that, I think that the wave V could be a rather steep and could extend to 3 times of wave I. Possibly – $87000.
- Golden Ratio. The end of wave IV breaks the long term wave into the Golden Ratio (golden lines on the chart). An expected end of wave V – $79000.
I charted the dark green rectangle as a primary target area.
There are also chances that the wave takes several years to develop, however, there is not enough data to either support or reject this hypothesis.
Let’s see how this week ends. I hope it provides enough information for projecting the next short term moves.
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