Today $BTC made two strong bearish statements – a daily 100/200 death cross and a daily Bearish Engulfing that stopped the micro-rally. Nothing bullish at all. Let’s explore the hypothesis from the different angles.
Today’s red candle formed a Bearish Engulfing on a higher volume. The bearish odds are high.
A daily bearish 100/200 MA cross completed today. Such cross happened twice before – in 2018 and 2019. In both cases, the event was followed, respectively, by 12 and 4 months of lower prices.
The weekly and monthly candle formations and indicators continue to put a bearish pressure on the daily and every smaller time frames.
I would like to see at least two strong green candles closing above 20 EMA line before I consider the first sign of a rally off the bottom.
Odds: Strong Bearish
BTC and ETH produced the strongest bearish candle formations today. The odds of bearish continuation are very high (>80%). ADA and LTC are bearish, but not that strong.
While lower prices are expected, it does not mean that it needs to happen tomorrow, there is a chance of a 1-2-day pause before resuming the decline.
The chart has the updated counts. As more waves formed, I changed the primary operative count. I think that the low on Jun 22 was the end of wave 3 and the wave 5 is still coming. Based on the channel, wave 4 has 4-6 more days to develop. Wave c of 4 has qualities of a diagonal, meaning that wave 5 could be quite strong.
Waves 5 typically extend the length of wave 1 or two times wave 1. In case of 1x, the end of wave would be just above the long term support line. If wave 5 becomes extended to 2x, the target would be $2-7k. I am skeptical of the latter, but Elliot Waves aren’t.
If the current wave breaks through the channel boundary, the blue count would become the primary.
I expected that BTC trades this week within a range between $36k and $32k with many abrupt see-saw moves. After today’s closure, the chance of a continued decline to the new lows is higher than yesterday.
So far, no bullish signs.
The long term perspectives and the chart can be found in the Monthly Analysis by the link below.
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