Hello Fellow Traders.
If you look at the monthly chart for BITCOIN then it looks like it has formed a complete Impulse wave with the previous cycle and because of this there needs to be a correction wave but there is no complete correction wave yet. Since the top of the previous impulse wave ($6900 Nov 2021) it has formed a leg "A" down to $15460 and now a leg "B" up to $52890. Could it be a Elliot correction wave that's busy forming? And is the top of leg "B" in yet? I believe the answer is YES to both questions and here's why i think so:
There is pivot point time frame Confluence(Same pivot price on multiple time frames) that I noticed as well as RSI Based Resistance lines that line up together in the same zone on multiple time frames(More confluence) and at the same level as the Confluence pivots(Even more confluence). If you follow the rules of Elliot Wave Theory and you draw it on the monthly, weekly and daily time frames then it seems to work out right(If I am not mistaken).
The following images utilizes different wave colors for different time frames to make it easier to differentiate between them when viewed all together.
- Green for Monthly
- Blue for Weekly
- Purple for Daily
Starting with the Monthly(Green)
In the above image a drew the big (Long Term) correction wave with two possible targets for leg "C", that's assuming leg "B" has reached the end and it is in fact a correction wave. The two different targets for leg "C" is based on previous support and resistance in the area.
Above I added my long term stop loss, entry and take profit levels (SHORT POSITION) while still on the monthly time frame. I placed my entry at $52257 when I noticed the possible top and I placed my Stop Loss just above the last Confluence pivot ($52890) for minimal loss (2.3%). My Take Profit zones are based on possibilities. In the next image I will remove the short position zones and info.
In the above image I drew two weekly (Blue) impulse waves. One for green leg "A" and one for green leg "B".
In the next image above I added the Daily (Purple) waves. For leg 1 of the Weekly (Blue) impulse wave I drew a Daily (Purple) impulse wave. For leg 2 of the Weekly (Blue) impulse wave I drew a Daily (Purple) correction wave. For Blue leg 3 I drew another Daily (Purple) impulse wave. For Blue leg 4 I added a Daily (Purple) correction wave. For Blue leg 5 I added another Daily (Purple) correction wave but it could also turn out to be a impulse wave. Not 100% sure! Only time will tell!
Please let me know what your thoughts are on this. Any suggestions or possible corrections welcome.
Please note that this is just a view of my personal technical analysis and i could be wrong. Please use your own judgement and analysis to see if you get the same Elliot Wave results. Any real trades are made at your own discretion. Nothing in this publication constitutes financial advice and everything is purely educational.
Comment:
Comment:
Quick update.
There is some Bearish Divergence on the daily time frame for Bitcoin which adds more confluence to the trade setup. Please see the chart bellow.
Comment:
New Stop loss.
Hello Everyone.If you look at the chart bellow then you will see that i moved the stop loss level just bellow the entry line and by doing so i turned this trade setup into a ZERO RISK trade.
This method affects a persons Trading Psychology in a positive way because it reduces the stress levels
Comment:
Stop Loss Hit.
Hello Everyone.Normally my first STOP LOSS adjustment in a active trade is to the entry level once i am in profit and when shorting i put my stop price bellow the entry and the limit price right at the entry for the "spread" but because i failed to mention this and only made one slop loss line on the chart, lets say the Stop Loss has been hit and for the purpose of this publication i have made a new entry (paper trade) as there is still a possibility for a long term correction wave. The two possible targets remain the same.
Trade closed: stop reached:
Hello Everyone.
My stop loss has been hit and and i am closing this trade setup but i will still be keeping my eye on it as the long term correction wave idea has not been invalidated yet.