Hi Everyone,
BTC has been correcting for nearly a week now. This was preceeded by a rise from $6,400 region to nearly $10k! (We missed it by $10, dang...so close...). From an Elliot wave perspective we can see a 5 waves count as well (although not the easiest!).
We are in the ABC correction now and we have seen pretty much non-stop sell off with little retracement stops since it started. The question I'm wondering about is: What's next? What is the target for the correction?
We're currently consolidating following the most recent sell off and I have made an analysis for that here.
As per the larger ABC correction, we have broken out of the channel formed by the price rising from $6,400.
We can assume price will travel down the distance equal to the width of the purple channel. This is shown by the white arrows.
If we apply fibonacci retracement to the 5 wave structure, we can see that the target established by the white arrow matches perfectly the golden pocket fib retracement...what a coincidence!
The question is: how are we going to get there? Are we going to put another leg down soon and complete a zigzag? Or is the price going to revert short term and go up to for a B leg of a flat?
It is impossible to say until we have further data available but here are some possibilities:
A) A zigzag -complete
In this count, ABC retracement is complete and the price can resume an upward trend. I think this is not very likely for few reasons:
B) A zigzag - not complete
To me, this is the most likely scenario right now. Mostly because I believe there isn't enough strength but enough of a strong wave B up at this point.
B) A flat
I personally don't think that we will see a flat, mainly because there is lack of evidence from RSI and MACD to support this scenario. As you can see on the picture below, MACD has given a sell signal few days ago and histogram is downticking. RSI is in the neutral zone, but the preceding trend is downwards, following RSI peak on daily around 23rd May. So overall, I can't see the evidence of strength required to push the price up to the previous peak and beyond.
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