12345 wave pattern ends inside an ascending wedge
Updated
It seems that my initial evaluation of the impulse wave were just subwaves of wave 1 in a larger 12345 pattern. But this wave pattern has created an ascending wedge, and wave 5 seems to end here at $9900 or not much further.
This time the expected correction should happen, for several reasons. First, the ascending wedge is a bearish pattern. Second, we still have bearish divergence on RSI, MACD and even momentum. Third, the bulls seem to have lost momentum, and even short liquidations at $10500 (as seen on twitter @whalecalls) didn't propel us there. And forth, we have even less bullish volume for now.
Not forgetting, however, that pumps, bull traps and bear traps happen all the time recently, it's not completely sure that the things will happen as I said, but without external intervention / manipulation, it's a large probability. Hopefully it's not another bear trap; we shall see.
How large the retracement should be, IF it happens now, it's hard to tell; rising wedge is just a reversal pattern. If we don't get out of the uptrend channel, the odds are still bullish, I think we are going to start a 5th larger uptrend wave after correction; that would be good to ride up until a larger correction.
This time the expected correction should happen, for several reasons. First, the ascending wedge is a bearish pattern. Second, we still have bearish divergence on RSI, MACD and even momentum. Third, the bulls seem to have lost momentum, and even short liquidations at $10500 (as seen on twitter @whalecalls) didn't propel us there. And forth, we have even less bullish volume for now.
Not forgetting, however, that pumps, bull traps and bear traps happen all the time recently, it's not completely sure that the things will happen as I said, but without external intervention / manipulation, it's a large probability. Hopefully it's not another bear trap; we shall see.
How large the retracement should be, IF it happens now, it's hard to tell; rising wedge is just a reversal pattern. If we don't get out of the uptrend channel, the odds are still bullish, I think we are going to start a 5th larger uptrend wave after correction; that would be good to ride up until a larger correction.
Note
As I was answering the comments, we broke down and now testing the former resistance at $9760 as support. If it holds, that will cut the correction; it would be very bullish!Note
We had a bull trap at the support; typical for a downtrend, even if short term. But the support didn't hold finally, and we are continuing the correction. I think we are going to retrace at $9200-9300 but I would watch all previous resistances which might have turned into supports.Note
For longer term forecast, the larger wave patterns are not very clear. We've either ended a 5th wave - in this case we are in a larger ABC correction - or we are inside a 4th wave which will have a minor ABC structure; the later would be the case if we retrace a bit here on the $9570 support.In the case we are starting a 5th wave, this should ideally happen at the bottom of the uptrend channel; that should be at about $9300. Otherwise we will get out of the uptrend channel, have a B wave retracement at about $9200, then a C wave targeting something in the range $8200-8600.
There would be also a possible more bearish scenario, cause an impulse wave is also possible after a diagonal wave expansion. In that case, we would fall other 2 waves below $8200, and because in the bitcoin case wave 5 is often longer than wave 3, that would send us in the 7000s range. I will try to make a new chart to show that after the first retracement.
Note
Ok, the first retracement should be here, but it's not quite an ideal bear flag pattern what we're building here, to be sure that we're going to complete an ABC pattern. If we are on a B (or second) wave, the next stop after retracing down should be on the support line at $9215; that would be outside the uptrend channel, which is not really good news for the bulls.That being said, the direction is not clear yet and I would definitely wait before shorting or going long with high leverage. But I'm looking at the large number of longs created on BTCUSDLONGS chart. If we are going down, it's going to be nasty, lots of stop losses will fall and lots of little fish are going to fry.
Note
Now we really have an ideal bear flag and minor second wave. If no manipulation happens, we are going to retrace down. Updates tomorrowNote
The update is here:
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