Cover Image courtsey of Elliott Wave International
What's a basic EW pullback? A pullback is a pause or moderate drop in a cryptocurrency pricing chart from recent peaks that occur within a continuing uptrend. Basic EW stands for a basic Elliott Wave as shown above. "One complete cycle consisting of eight waves, then, is made up of two distinct phases, the five-wave motive phase, whose subwaves are denoted by numbers and the three-wave corrective phase, whose subwaves are denoted by letters." Elliott Wave Principle Key to Market Behavior by Frost and Pretcher
I like to use an Elliott Wave perspective as well as several other indicators to view a chart. The BTC daily chart below shows the five-wave motive phase in a healthy continuing uptrend. In a recent post, BTC USD Decision Time I predicted a weak trend and my target for the fifth subwave was invalidated. I asked the question will BTC reach the .5 (10135.75) area. My actual exit price at 9983 was off by 2%. So my estimate of a strong pullback needs to be reevaluated. Remember, every trade is a lesson to improve your next set-up.
TradingView Chart Healthy Pullback Area
I caught this gem by Jacob Canfield on Twitter...
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Notice on the Elliott Wave complete cycle the .618 Fib retracement marks the end of the corrective phase. A strong pullback would indicate going all the way to the .618.
On the chart above, I've highlighted in grey the area of the previous fourth subwave which is typically the range for a pullback. Also, the black support and resistance lines 8521 (MA 100 at 8511) and 8720 which denote an area to watch. To follow the healthy uptrend, I'll be focused on the MA50 8768, S/R 8720, and .382 Fib 8758.
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