And now we're waiting for BTC to decide its direction on the 4h and possibly the daily time frame...
BTC has formed a beautiful diamond pattern which should break out within next 36 hours. The diamond is formed by the lower part of the purple channel (bullish on the daily time frame), and the yellow channel (bearish on the 4h time frame).
Bullish case : a retest of the purple resistance is now in play and expected before resuming the bullish trend. A bullish breakout would validate the Elliot count on chart, signaling the beginning of a wave 3 towards at least a retest of 4300 levels, and probably up to 5k. No need to calculate exact targets until this scenario is confirmed and long position open. This scenario favors the higher time frame, and is therefore more probable in my opinion.
Bearish case : despite having already reached the golden pocket 0.618 retracement of recent bull run, let's not forget we are still in a bearish trend on weekly and monthly time frames ! A bottom below 3k is expected by many, despite the fact that a relief to 5k would be more "healthy" before that bottom. At any point, BTC could decide to resume its downtrend... A break of the purple support would surely lead to panic sells in high volumes, and would change the proposed Elliott count : the C and 1 of the diamond would now be an A and B, and panic leg down would form a C.
Both cases are plausible. I stick to the bullish case due to Fibonacci retracements : the daily bullish run has already retraced to 0.618, while the weekly bearish dump still has room to recover. But the careful trader always waits for confirmation before entering a trade. Unfortunately I have not yet learned that lesson, and hope my long position won't hit its stop-loss !
Happy 2019 trading !
BTC has formed a beautiful diamond pattern which should break out within next 36 hours. The diamond is formed by the lower part of the purple channel (bullish on the daily time frame), and the yellow channel (bearish on the 4h time frame).
Bullish case : a retest of the purple resistance is now in play and expected before resuming the bullish trend. A bullish breakout would validate the Elliot count on chart, signaling the beginning of a wave 3 towards at least a retest of 4300 levels, and probably up to 5k. No need to calculate exact targets until this scenario is confirmed and long position open. This scenario favors the higher time frame, and is therefore more probable in my opinion.
Bearish case : despite having already reached the golden pocket 0.618 retracement of recent bull run, let's not forget we are still in a bearish trend on weekly and monthly time frames ! A bottom below 3k is expected by many, despite the fact that a relief to 5k would be more "healthy" before that bottom. At any point, BTC could decide to resume its downtrend... A break of the purple support would surely lead to panic sells in high volumes, and would change the proposed Elliott count : the C and 1 of the diamond would now be an A and B, and panic leg down would form a C.
Both cases are plausible. I stick to the bullish case due to Fibonacci retracements : the daily bullish run has already retraced to 0.618, while the weekly bearish dump still has room to recover. But the careful trader always waits for confirmation before entering a trade. Unfortunately I have not yet learned that lesson, and hope my long position won't hit its stop-loss !
Happy 2019 trading !
Comment:
One leg below purple support, supported by very limited volume. Looks like a fakeout so far, we might have reached a local bottom. Still waiting on the side.
Trade closed manually:
Looking backwards : I closed my long position manually in a small loss due to the sideways price action. The bullish case now seems valid, despite the purple support behind slightly too bullish on the above chart.