While the crypto market as a whole continues to bleed out with every passing minute, relief may be in sight. A slew of negative press this week out of South Korea, Brazil, and the Euroean Central Bank, as well as the closure of the now infamous "BitConnect" ponzi scheme (which, despite the many warning signs, effectively lead to a complete loss for many investors) cast near complete doubt in the mind of every crypto enthusiast. The market can't regain the public's trust overnight, but at least the chart gives us some idea as to when we might see further impulses to the upside.
The chart I wish to present takes a step back from BTC's year-end and YTD parabolic price action and explores its fair value from a logarithmic standpoint. Two trend lines are immediately visible on the chart; one which had provided resistance prior, while the other had provided support. These are labeled T1 and T2, respectively. As you can see, price action between the two trendlines is anything but atypical. The parabolic departure from this zone demands some sort of correction, which I believe we have seen in BTC during this month of January. The correction (labeled ABC) is nothing out of the ordinary for those of us who examine charts through an Elliott wave lens; while the current correction appears to be flat, a return to the fair value zone between the two trendlines would result in a standard, 3-wave zig-zag.
A return to this zone would provide adequate support for a move higher, as it is further bolstered by confluence of the 100 and 200 day EMA's, which align with T1 and T2, respectively. One only needs to look at the order book on GDAX to see that buying pressure is elevated at prices within this zone, and once we see FUD leave the current market more upside may be within reach.
If the fair value zone fails to support BTC's move higher, then we are almost certainly looking at a cyclical bear market.
The chart I wish to present takes a step back from BTC's year-end and YTD parabolic price action and explores its fair value from a logarithmic standpoint. Two trend lines are immediately visible on the chart; one which had provided resistance prior, while the other had provided support. These are labeled T1 and T2, respectively. As you can see, price action between the two trendlines is anything but atypical. The parabolic departure from this zone demands some sort of correction, which I believe we have seen in BTC during this month of January. The correction (labeled ABC) is nothing out of the ordinary for those of us who examine charts through an Elliott wave lens; while the current correction appears to be flat, a return to the fair value zone between the two trendlines would result in a standard, 3-wave zig-zag.
A return to this zone would provide adequate support for a move higher, as it is further bolstered by confluence of the 100 and 200 day EMA's, which align with T1 and T2, respectively. One only needs to look at the order book on GDAX to see that buying pressure is elevated at prices within this zone, and once we see FUD leave the current market more upside may be within reach.
If the fair value zone fails to support BTC's move higher, then we are almost certainly looking at a cyclical bear market.
Comment:
Aaaaand we've turned things around. Long from $8980.
A close above $12,000 today would be a very bullish signal, but so far the reversal appears as planned.