Last week, in my article titled "Weekly Opportunities In Cryptocurrency: Did We Just Bottom?" I suggested that a bottom could be imminent, or that we had bottomed. I often look to our bellwethers, Bitcoin and Ethereum, as signals for the larger crypto market.
I wanted to see $7085 hold in Bitcoin and $495 in Ethereum. On May 28, Bitcoin hit $7075, a nominal break and Ethereum $505. So far those levels have held and we appear to have set up bullishly. As long as they do, we have a very bullish setup - the five wave pattern off the April lows, which suggests this wave ii we believe bottomed that proceeds a larger third wave rally.
Below are six-hour charts that show the expected extent of the coming rally, if these levels hold.
Now, let's take a look at the five-minute chart again for an update. We have traced a "micro" five wave pattern off of those lows. Note how the third wave properly extended upward, a strong sign an impulse might have started. In both charts we have a series of "nested twos," as we call them - a wave 2, and a minor wave ii. Both suggest a third wave will start soon.
Both are holding nice Fibonacci levels. I now want to see $7185 hold in Bitcoin, and $523 in Ethereum. Both of these are levels of last resort, and higher would be better. So far, so good. If these levels hold, we should see the third of 1 of our larger third begin very soon.
Note the green line on the charts. This is a key level on both, where we retrace .618 of the drop from the May highs. If impulsive over those levels, $8720 in Bitcoin and $685 in Ethereum, we'll have the strongest confirmation we can have without a direct breakout.
I currently consider sentiment to be very doubtful to apathetic. The apathetic holder feels shocked that they've seen such a drawdown, but feels trapped and certainly doesn't have the money to buy more. The doubtful holder believes Bitcoin is in a large-scale correction and will remain in it for many months.
One trader I follow called for a 1.5-year correction. Some analysts I watch are calling for Bitcoin to go below $5000. While I can see that price level possible, I cannot see it as probable at this time. Granted, if the key levels I'm watching, and call out above, break, I will look down. And, those levels are quite tight to price here, so we have an early warning.
It seems, anecdotally, that we have sentiment conditions ripe for a larger rally to begin. But price must prove.
Conclusion
In short, so far price has held over the bottoms struck on May 28. We are now tracking nominally higher support levels in both Ethereum and Bitcoin to serve as an early warning of failure. As long as support levels hold, we see the next degree third wave as ready to start.
All charts completed on Motivewave
http://www.motivewave.com?af=5337698080391168&c=GSEEK