Short

Updated

Bitcoin (BTC) correction_2

In the previous analysis of Bitcoin, two major support areas were identified, and we observed how Bitcoin reacted when it reached the first one. Now we can update the chart based on the new candles. Based on the Bitcoin behavior it seems one of two patterns may be forming; a channel (blue) or an inverted wedge (yellow).

Unless some major-big-really good news about cryptocurrencies/Bitcoin occurs or some huge geopolitical changes happen, I think Bitcoin's overall direction is still in a downtrend direction and this uptrend wave is a corrective one. We have to wait for Bitcoin to reach the target area which is 28-29K and see what will happen there. Bitcoin will (have to!) visit the 18K support area again.

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The break has happened. Have to wait and see how waves unfold.

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Be very careful; the market smells like blood. There might be a sharp uptrend or downtrend move.

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The last correction wave ended at the 0.5 Fib level. Let's see where the current correction wave ends. The 0.382 or 0.5?

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The correction wave finished near 0.382 and the triangle pattern broke downward. As said before, Bitcoin has to visit the 18K area again.

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Bitcoin is going down along a downtrend line. If this line breaks, there could be a minor uptrend wave.

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So, the minor uptrend happened as stated in the above comment. How far this uptrend wave can go? These two analyses show the possible resistance areas. If this major downtrend is happening in a channel, the upper line of the channel is the resistance. Else, the major downtrend wave can be seen unfolding in a Fibonacci Fan; thus the Fans can act as resistance.

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Something like this might happen. Lets see what happens!

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BTC analysis is still in place. BTC has reached an area where two possible moves are more likely to happen. If BTC wants to break the support area below, it has to do in one big (or maybe two big) downward candle. Else, BTC will oscillate above this area then break the downtrend channel. Lets see which will happen.
(I think the former is more likely)

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A divergence between RSI and BTC price has formed. Lets see if it can break the downtrend channel line.

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Also, last time BTC reacted to the channel upper line, a triple 1-2-3 wave have formed. Is the same formation going to happen? Lets see.

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Get ready for BTC to drop!

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Well, BTC didn't dropped yet. Still might do, soon.

However, there is another possible move which BTC could do: break the adjacent Fan line and go up to the next support line, then drop. Keep this in your mind.

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So, the other possible move scenario happened; BTC broke the Fan line and moving up.

Currently, BTC is oscillating in a sideway channel. If BTC reaches the bottom of this relief zone, thinking of a buy position is viable.

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The channel's bottom held up pretty well-so far. And a strong come back, a impulse wave, is happening right now. If the downtrend line of inverted wedge breaks, there is a very good chance BTC reaches the upper line of the channel.

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Something like this might happen.

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Done!

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Okey then, the first major wave (1) ended and we are now in correction wave (2). Have to wait and see were this correction ends - probably around channel's mid-line. After that, get ready for major impulse wave (3).

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I updated the previous wave count and as expected the correction ended near the channel's middle line as well as Fibo 0.618 retracement. The next impulse wave has started, let's see how waves unfold.

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The previous minor analysis clearly failed. I made three trades: two TP and one stop loss hit. Hope you have used it too.

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Back to the first analysis, the big picture; there are three major horizontal support zones. BTC broke below the second one, recently, and going down toward the 12K zone. Have to wait and see how things unfold.

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Been away for a while.
So the Bitcoin analysis is still in place. Two signs (divergence in RSI and RSI downtrend line break) show that most probably there is a short trend change, i.e. upward.

Is the Bitcoin major downtrend has ended? I don't think so. At least the sufficient signs are not visible; there must be at least two HH and HL. I think Bitcoin will try another downtrend wave toward the 12K support are (shown in the chart).

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Lookin at Bitcoin movements from a different perspective.

According to this analysis, the main bearish wave of Bitcoin must have ended!
I don't think it is, but who knows! Have to wait and see what happens.

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Just a heads up; it seems a harmonic pattern is forming thus a pullback is anticipated.

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It seems the harmonic pattern is completed. Also, the uptrend line is broken. Have to wait and see when the correction wave start and see what the market has in store for us :)

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Bitcoin is taking longer than expected to enter a correction, mainly because fundamental situations like the Fed rate and Gold price have changed. Anywave, currently a diametric diamond pattern is forming and it is more likely than before that Bitcoin could go up to the horizontal resistance area (see previous update).

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Finally, harmonic pattern completed and Bitcoin is making a descending wave. Usually, when a harmonic pattern end, the following wave will go down/up to the middle point which is B (yellow circle); many times, goes even further.

Anyway, no matter how further this downtrend wave goes, I believe this is the last downtrend wave for Bitcoin. This does not mean Bitcoin will rises from ashes and strong and sharp upward impulse waves happen one after another. But simply, an area could form in which Bitcoin can settle and make promising signs of return. Maybe even this area could be touched once more in the future after Bitcoin gone up; that happened before. It goes without saying that many fundamental factors such Fed rates or even wars can affect on how long this last wave take to finish.

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I think the previous Bitcoin analysis is still in play; although, some fundamental factors such as the coming Fed rate expectation as well as some US banks collapse have changed the timing. From a technical view, it seems after the harmonic pattern ended an inverted wedge is currently unfolding. Let's see what happens next.

P.S. I don't think a bullish head and shoulders pattern has formed.

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Bitcoin has reached a horizontal resistance area which is important. In order for the current uptrend wave to continue, Bitcoin must cross this area and settle above it.

If you followed my updates on BTC; looking at the comment on Jan 9 (Lookin at Bitcoin movements from a different perspective), it seems the next Bitcoin major upward move has started. Any minor downward waves are a chance to buy for hold or swing trade.

SaeedSalehinia

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Bitcoin (BTC) correction

by SaeedSalehinia

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