Bitcoin is dropping back to a minor support zone in search of the next direction. The following looks at what could happen next based on the Elliott wave theory.
August 13, 2019 | AtoZ Markets - Since last week, BTC has been dropping after finding it difficult to extend gains above the $12,000 handle. Instead, price retreats toward the $11,100 intraday support level which was a resistance level in the first week of the month. The current dip from $12,300 is looking corrective and thus suggests higher rallies could happen.
The crypto market, in general, has dropped below the $300 billion mark once again, after shedding close to $30 billion in just over one week. However, Bitcoin dominance has remained strong as the altcoins performed worse.
Bitcoin technical analysis and important price levels
The chart above shows how the bull-bear battle has gone since the rally in the first half of 2019 peaked at 13,900. Price ended this with a candlestick hammer which signaled either a correction or total change of the trend. In this case, the latter seems to be more likely. Price rallied swiftly above the 100-day EMA to establish the 2019 uptrend with the 9-day EMA providing perfect support for the three dips that happened so far. The bounce since early August completed a bullish engulfing pattern which drew a much tougher battleground between the bull and the bear. If the bull wins, the top of the hammer (13,900) should be broke upside toward the $19,800 all-time high with the 9-EMA providing support and potential good entry levels for buyers. On the other hand, if price breaks below the 9-EMA and eventually the $3,100 support, a further dip to $7,200 is expected where the 100-day EMA should offer support against another price crash.
Bitcoin Elliott wave analysis
From the Elliott wave perspective, the sentiment is similar but we can get a more precise outlook. The dip from $13,900 is corrective and completed a double zigzag pattern at $3,100. The current surge was expected to complete an impulse wave above $13,900. The chart below was used in the last forecast.
A (i)-(ii)-i-ii wave formation was emerging. We expected wave ii to be supported at the $10,400-$10,700 zone which is just below the $11,100 support level. We also reckoned that a fast dip below this zone and below $10,000 might be a big threat to this bullish development. Currently, price is heading to this zone as the new chart below shows.
If the bull could hold at prices around the zone and the pushes above the wave ii channel and wave i top, further rally to $13,900 and higher is expected.
Goldman Sachs bullish forecast on Bitcoin
Meanwhile, Goldman Sachs gave a Bitcoin bullish forecast for customers as shared on Twitter. The bank used the versatile Elliott wave theory to predict the current pullback finding support at $11,094 ($11,100).
Similar to our Elliott wave forecast, the bank had wave (2) to have completed at $3,100 if the moves that come next satisfy the scenario. Otherwise, a deeper wave (2) could happen. Despite a very similar outlook with ours, our interpretations of the wave development from $3,100 are a bit different. The bottom line and overall direction, however, is very clear.