Bitcoin is having a series of decline to continue the bearish correction. How deep will this go until the bulls take over?
June 06, 2019 | AtoZ Markets - After the quick drop on May 30 that led to a loss of $1,000 in a few hours, Bitcoin couldn't build on the recovery to 8,800 that followed. The premier cryptocurrency is currently moving within a range below $8,000 after a bounce from 7,500. Other cryptocurrencies have moved in similar manners and the crypto market has now lost about $21 billion in June so far. Bitcoin market dominance has also dropped to 55.7% on Coinmarketcap.
The decline could continue but that would by no means scare away investors who have repeatedly over the years encountered such volatility and most probably are used to it. the current decline was expected as the market was getting overbought after the big surges in April and May. Most of the top cryptos recovered more than 1/3rd of the 2018 bearish trend in before May 30. One could barely argue that the current decline would strengthen investor's confidence and bring in new buyers to push prices far higher. Many of the ardent Bitcoin bulls might even buy at every new low and accumulate long positions as they believed the crypto has already bottomed at 3,100 and now in a bullish phase. From a technical perspective, the 2019 bullish trend from 3,100 is healthy and so is the current minor dip.
Bitcoin price prediction: Elliott wave perspective
From the perspective of Elliott wave theory, Bitcoin price current dip is part of the 4th wave bearish correction of the bullish impulse wave from 3,100. The impulse wave is made of five non-overlapping waves. Unless a fast dip below 4,300 (end of the 1st wave) happens, the bullish trend should continue to 10,000-12,000. In the last update, we looked at how deep the 4th wave could go before the 5th wave. The chart below was used.
We expected a simple zigzag wave 4 to 7,500 and its neighborhood or a more complex corrective pattern to 7,000 or slightly below. Price hit the first bearish target at 7,500. However, the possibility of a more complex dip to 7,000 can't be written off yet. The chart below shows two high likely possibilities.
The simple zigzag (a-b-c in red) is about completing wave (c) below 7,500 if it breaks below the current range. A break above 8,000 and the red channel could mean the end of wave 4 and the start of wave 5 to 10,000-12,000. On the other hand, if the current sideways move continues below 8,000, the dip might continue to complete a double zigzag (w-x-y) in blue to 7,000 or slightly below before the 5th wave could start.