Hi guys, I want to try to estimate what is next in Bitcoin usign abc correction model. Bitcoin has made significant gains in two months. The price of Bitcoin was $6460 in December, 20210. It reached the 10504 on Feb 13, 2020. As you see below, it seems that Bitcoin has completed its short term uptrend and started it first correction since it broke two support line and made its first lower high.
I have provided below Bitcoin daily graph at Binance.com.
In a typical bullish market, we need to see higher highs and higher lows. Bitcoins last high is $10,500 levels. We have a lower low at $10,250. Unless we break the levels, we are officially in a bear market and in a correction phase. We may reach to our last higher low of $9,105 levels.
As you know, after a typical bull market, 5-wave trends are then corrected and reversed by 3-wave counter-trends. Letters are used instead of numbers to track the correction. Source: babypips.com
In a typical correction, the length of first wave equals the length of third wave.
If this movement is major correction, then Bitcoin may reach the previous support level (now become resistance) of $9,500-$10,000 levels then we may reach the price levels of $8,800 levels.
We have used Elliot Wave theory's abc correction in this analysis. You can use other price action tools or indicators in order to enter or exit trade, as well.
We need to stay above the 20 Weekly MA and it needs to act as a support in order for Bitcoin to sustain the bull market. If Bitcoin breaks the 20 Daily MA, we will know that we are in a bearish market. We couldn't go above the critical 10,5K resistance level. So we break the trend but we have not reverse the trend for now.
Thanks for reading. I hope you’ve found it helpful.
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