Today $BTC made the third green candle and it even closed above 20 EMA. But, anemic and declining volume. What could get wrong? Let’s explore the messages.
Three green candles could be viewed as Three White Soldiers. However, the indicators are not fully supporting this rally. We had several occurrences of similar pattern, but they were all rejected. It was likely because a strong bearish pressure on the monthly and weekly frames (refer to the monthly analysis for details).
If tomorrow BTC produces a strong green candle above at least 35.7k, it would be an initial confirmation of a possible bottom.
Elliott Waves + Forecast
In the last hour before the closure, BTC formed a clear motive wave down – it is best seen on the 1 or 5 min chart.
It could be a sign of a trend change. If the move continues, I would not be surprised by $33.2-33.7 by the morning. This action would align with the option 1 below.
This is the short term forecast from the weekly analysis. No changes so far.
“I think that BTC is trying to form a diagonal that would be the wave C of (B). If this hypothesis is correct, the upcoming week would be full of unexpected see-saw moves and BTC is expected to stay within the charted narrowing channel.
The typical target area for such formation would be 37k-39.5k.
1. If BTC starts an aggressive wave down before reaching the target, it would be viewed as truncation.
2. If BTC advances over 37k, the count will likely be invalidated and a bullish structure would take place.
Based on the anticipated candle structure and the most typical expectations of the corrective waves, I expect BTC to continue working on this diagonal structure for the majority of the week, reversing on Friday-Saturday. “
In the monthly and weekly analyses (links below) I discussed the mid/long-term perspectives and shared the long term chart that remains unchanged for many months.
Follow the blog in Twitter @InvestingAngles or by email subscription. Comment, Like and Retweet.
Previous Monthly Analysis: