Bitcoin price is slowing down after completing a bearish correction. Will it resume upside? The following give insights based on Elliott wave theory.
January 16, 2019 | AtoZ Markets – The crypto market gained marginally on Monday. However, this couldn't be sustained on Tuesday as Ethereum announced a delay in its constantinople upgrade after a suspected vulnerability in one of its updates. After a 14% price slump to 3450 last week following another $9 billion crypto market loss, Bitcoin surged close to 3700 today. BTC current market cap at $64 billion has dropped from last week's average of $70 billion. Market volume has also dropped to $5.5 billion. It seems the next volume hike would be accompanied by a price spike expected to break out of 4000 again.
BTCUSD Elliott wave Analysis and Important Price Levels
From Elliott wave perspective, BTC is completing a corrective pattern. After the current bottom of 3100, price has taken a 5-wave ride to 4200 before the current bearish correction. The correction is a bit below 61.8 Fib-retracement of the 3100-4200 upsurge. Following the 3100 bottom, at least a 3-wave rally should be seen upside. The first leg – 3100 to 4200 completed and then the 2nd leg 4200-3450 followed. The 3rd leg is expected to break above 4200. The chart below was used in the last update.
The 2nd leg – wave (b), was well confined in a falling channel. The dip was expected to stay above 3200 and followed by a big rally that will go toward 4800-5000. The chart below shows price completing this leg amid a reduced trade volume.
Price is returning from 3500 and a bullish breakout toward 4000 is the next expected move. This forecast is in favor of the bulls unless a break below 3200-3100 support zone happens. Just at the current price level, the chart is printing an inverted head and shoulder pattern with neckline around 3700 as the chart below shows. It seems the first confirmation needed is a break above 3700.
A break above 3700 is required for a bullish impulse wave above 4000. The move is expected to be fast, otherwise, another corrective structure mid-way could precede a fast fall below 3450.
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