Check for rare bull market correction patterns

The price of Bitcoin fell below $50,000 in an instant, only a few weeks after the emergence of top cryptocurrencies Set a higher heightThe year-end price target of $100,000 or higher is now no longer out of reach, thanks to the rare bull market correction pattern that few people see.

However, although Bitcoin has fallen “flat”, this may be the last time the cryptocurrency has fallen before the end of the bull market cycle.

Shocking corrections crypto diehards don’t see coming

Most investors who ask Bitcoin what their arguments are, most people may point out the scarce supply of cryptocurrency, halving or Inventory-to-flow model.

The cyclical behavior associated with the halving every four years or so is everything that has existed in history, and all the masses must continue.The inventory-to-flow model takes into account the scarcity and halving, and the predicted price is as high as US$100,000 to USD 288,000 in December 2021On the contrary, the transaction price of each coin today is 49,000 USD.

Related Reading | In search of Fibonacci: Has Bitcoin started a “gold” recovery?

Also in history, every time the price of Bitcoin increased significantly, it continued to show a parabolic upward trend. However, this time is different.Leading cryptocurrency by market capitalization hits a new high Its April peak, But has since fallen by as much as 38%.

So what to give? Well, the first clue to the type of correction pattern Bitcoin is in is related to the 38% retracement.That’s because 38.2% is 0.618 Fibonacci retracement level. Taking into account the 61.8% movement, it is possible to call the corrective mode in play as “flat”.

Which type of "flat" is Bitcoin trading in?  | Source: BTCUSD on TradingView.com

according to Elliott Wave Theory, During the bull market, there are two main correction phases and three upward pushes, which constitute the main upward trend. These stages not only alternate between impulse and correction, but also the intensity of impulse and the severity of correction. But we will soon return to the concept of alternation.

The market had expected the fifth and final impulse to reach $100,000 or more, but the potential “flatness” prevented the end of the fourth wave—until now, or just ended. What is not entirely clear is the type of apartment in which Bitcoin is located.

The next phase of the Bitcoin bull market starts with a flat conclusion

Flats can be regular, irregular, or extended, or in rare cases, “run”. Running flats are too rare, Because they occur in a higher time frame when the uptrend is so strong and dominant, the plane failed to end outside the A wave in the correction.

The above comparison shows that the price movement of Bitcoin perfectly fits the Fibonacci relationship of the model. The higher high and wave B stopped loss at around 123.6% of the fall of wave A, and then fell to 61.8% of the rise of wave B to possibly complete wave C.

The question is, is the collapse over here?Still Bitcoin price continues to fall to form Expand the unit instead? The 123.6% expansion target of the extended apartment will be closer to $19,500-BTC will reach its peak in 2017.

BTCUSDT_2021-12-06_15-56-16

Elliott Wave alternation guidelines explained  | Source: BTCUSD on TradingView.com

But for the bulls, there is still a lot of hope According to the alternating rule of Elliott wavesThe main power wave alternates between the push wave and the adjustment wave in a five-wave pattern. Even-numbered waves are always corrected, and odd-numbered waves move with the main trend.

Related Reading | Want to learn technical analysis?Read NewsBTC trading course

Even correction waves appear alternately, simple and serious. One type of correction is often a horizontal adjustment, while the other is a sharp correction. It’s hard to imagine anything sharper than last year’s Black Thursday.Elliott Wave also pointed out that a correction is likely to be A simple ABC pattern, And the other is much more complicated.

The complexity of the merger in 2019 and 2021 is very different. There is also a clear wave and a longer wave three, forming a wedge-shaped pattern.if Wedge pattern Hold, will barely avoid expanding the platform, and should start the fifth and final wave.

However, entering the fifth wave is not the happy ending that the bulls hoped for.Result pattern, according to the same Elliott Wave Theory This indicates that the upward trend is still valid and may lead to The worst bear market ever Once the uptrend is complete.

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Featured image from iStockPhoto, Charts from TradingView.com



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