Bitcoin (XBT) Classic Elliott Wave ABC Correction Taking Place?

Bitcoin (XBTUSD) still showing all the signals of a classic retrace/correction taking place... This is normal after a strong bullish wave.

After we hit a peak on the 7-Jan., prices started to drop...

Now Bitcoin produced a lower high and we can see the decreasing volume.

Another signal to look at is the Exponential Moving Average (EMA) lines, once one of these levels is conquered, prices tend to fall back and test them as support. If the line breaks, then the next one is tested until one holds.

• We can see that EMA10 (green) was tested and broke down.
  
• The next one was EMA50 (yellow) which held and lead to the lower high.
  

If on the way down EMA10 and EMA50 are broken, the next level to test is EMA100 (purple line)... and this continues until all EMAs are tested.

EMA200 (brown) was conquered around 4-Jan. and hasn't been tested as support. It is likely that Bitcoin will go lower and test this level again. This theory is supported by the classic Elliott Correction Wave (ABC) as well as decreasing volume and indicators trending down.

Conditions for change
The charts are always changing as we know and every 4 hours a new candle is printed... If the purple trendline is broken XBTUSD can go higher with the next barrier being the last high at $8462.5.

Whatever happens, remember that patience is key and new opportunities are always developing.

If you did good on the last bullish wave, take a time out and relax before your next trade.

This is Alan Masters...

Namaste.

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