Bitcoin recovery hit a major setback after a fast crash to $6,200. However, the digital asset makes it back above $7,000 quickly.
May 17, 2019 | AtoZ Markets - There were fears that Bitcoin was overbought after a rapid rally to $8,400 from $5,500 this month. After dropping slightly below $8,000 on Thursday, a big dip followed in the first hours of Friday. In just about an hour, BTC had a flash crash to $6,200 (over 15% decline) before it quickly recovered to $7,300. However, the recovery has not been big enough to send the first cryptocurrency back to $8,400 high. The reason for the decline is not known. Probably some huge profit taking as the price was very close to the $8,500 resistance level. Currently, BTC trades around $7,000.
The crash cut across the market
The fast crash happened across the board with Bitcoin price leading the way. Ripple crashed by 23% to 37 cents from 48 cents. Litecoin and Ethereum slumped by 19% and 18% to currently trading at $86 and $230 respectively. Bitcoin Cash was the biggest hit among the top 5 with nearly 25% slump to $341. The crash set the market back by $24 billion while Bitcoin still maintains 56.5% dominance.
Bitcoin price Elliott wave analysis
The dip was expected but we have to admit that it was faster than anticipated. In our previous Bitcoin Elliott wave updates, we started an impulse wave from 3100 low. For the recovery progress to genuinely develop, a 5-wave rally with a 3-wave dip should happen. The 3rd wave of the impulse wave rally was very much extended after a big spike to $8,400. We expected a shallow 4th wave dip to between 6400 and 7200 as the chart below used in the last update shows.
After the 4th wave, a bullish 5th wave should push the price to the $10,000 mark. Let's look at how the current fast crash suits into this forecast.
The 4th wave dip should stay above the support wave 1-2 channel provided at $5,000. A deep dip to $5,000 would mean that wave (1) had already completed at $8,500 and wave (2) is in motion. The wave analysis above is more preferred. Price is expected to absorb the shock in the coming days or weeks with probably up and down swings within 6,000-8,000 range before a bullish breakout to $10,000. We can't know how wave 4 will go currently. Price activities in the coming days will probably give useful clues.