$BTC today closed the week with a High-Wave Doji. It does not provide a clear path, however, sets the channel that, once broken, can point the direction. Let’s explore this from the different angles.
The June’s candle continues to be under a strong bearish pressure from the Tower Top combo in May. The technical indicators are slowly deteriorating.
The weekly closed with a High-Wave Doji. If the next week candle closes above the high of this week or below the low, the direction would be considered set. In plain numbers:
– close above 38340 – bullish trend;
– close below 31160 – bearish trend.
The daily candle closed below 8 EMA line and it looks like the bullish hopes over the last few days are canceled now. I am expecting lower prices ahead and this week we could witness a Death Cross (100×200 MA). Until we see a strong, multi-day closures above 8 EMA line with confirmation, the stance is bearish.
Odds: Strong Bearish
Elliott Waves + Channel
The coin is deep in the corrective counts and it is extremely challenging to forecast the minor waves. So I focused on the bigger picture.
Until the last day I did not even want to think about this possibility (though briefly discussed it earlier with Kyle), but there are too many signs that point to it. A monstrous motive wave down, consisting of 5 sub-waves, marked as (A). The price is now right at the boundary of the channel down and waves 1-4 fit strongly into the most typical Fibonacci levels for a motive wave. There are a few signs that support the hypothesis that $BTC could have started its wave 5 down. If it is so, there are several most typical runs for the wave 5 and I marked them with bold red lines on the chart above (in order of probabilities):
- 1.0x the length of wave 1 – target 20555
- 2.0x – target 2749 (4 digits, not a typo)
- 0.618x – 27357
- 1.618x – 9551
If BTC makes a new lower low (lower than on May 19) in the next 2 weeks, consider these targets. The worst thing is that the correction would not be over once the wave 5 ends. From the Elliott Waves perspective, the corrections are never five waves. This wave down would only be the first wave of a much longer (but not necessary deeper) correction. It is too early to project the possibilities further until the wave down complete.
I also want to emphasize the importance of not crossing the Long Term Support at 19870.6. If it is crossed down, it would mean that we are dealing with the corrective wave of a larger degree and the long term projection would need to change.
Another possibility is a very extended wave (B) in green. The channel for this wave is between the low on May 19 and ~43500. It is important that BTC does not make a new lower low in this wave. It might take another few weeks to fully develop. I think that the first indication of this extended wave would be a broken channel.
There are few other options, but I think that they are less probable at this point.
To summarize the above points, $BTC is under significant monthly and daily pressure and I would expect it to continue downwards. Until it strongly closes a day above 36000 (8 EMA), then 37000-38000 (20 EMA), the odds will be bearish.
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