Today’s BTC candle screams Reversal. Bullish Engulfing – a strong bullish sign. Let’s have a look at different aspects of the move.
The Bullish Engulfing today is well positioned and strongly supported by technical indicators. High volume and closure above 8d EMA increase the odds of reversal.
The weekly candle turned green and, if the rally continues for the next 3 days, it can develop a reversal candle above 50w MA, which would be a strong confirmation of the reversal move.
I mentioned in several studies before, that from the monthly candle perspective, BTC better not make a lower low this month. Otherwise, it would open a door to much lower prices.
In my weekly update on Saturday I counted a triple zigzag for the whole correction, ending with a diagonal. I was not sure though whether the diagonal ended or should it push for another low. Below are the charts from Saturday and now. I think that this is the count – a triple zigzag of 11 waves.
The same chart zoomed in below. It looks like BTC is about to complete wave i and retrace for wave ii. The green rectangles are the targets. Technically wave ii should take no more than 1-2 days and retrace no deeper than $30k. If it does, there is a chance that the diagonal has not completed yet and the red rectangle would be the target for wave 5.
In case BTC falls and makes a lower low before July 31, this would be a totally different story that I covered in separate studies and will not be talking about here.
If the motive wave continues, it would fit greatly into the Long Term Chart that I designed on March 24 (below).
A few additional considerations about the green count. As wave IV dropped below the all time channel line, this even is called a “throw-under”. If this is the case, the following wave V is expected to be rather aggressive and could go over the channel line (a “throw-over”). Based on the Golder Section and the Fib levels for the wave, it is possible that BTC reaches $70-87k late 2021 or early 2022. The counts are preliminary and are based on the longer term waves. Once we know the character and major points of wave V, I should be able to provide an estimate with greater accuracy.
Forecast and Events to watch
If the EW counts and channel are correct, expect wave i to reach $32700-33200.
Then a retrace to $31700-30700 would be a typical one.
Wave ii needs to complete and wave iii should start at least several hours before the weekly cut-off, otherwise the weekly candle will be bearish.
And keep in mind this:
1. If BTC breaks below $28901.8 before July 31, it opens a door to lower prices.
2. If BTC closes below $28901.8 on July 31, it swings this door wide open. Possible decline to the 4-digit prices.
3. If BTC breaks below $19870.6 anytime (long term support), the odds of going into the 4-digit area would greatly increase.
I am planning to update daily on changes after the closures, as usual.
The long term perspectives and the chart can be found in the Monthly/Weekly Analyses by the link below.
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Previous Monthly Analysis: