Bitcoin might not be as bullish as you think...
There is a solid wave count that can take Bitcoin back down from the ~60,600 to the ~30,000 area. If we are in a B wave of an ABC correction on the 1D chart, we can expect a 5-wave sequence down to the $30,000 area or even lower to the $27,000 area; from the current price; unless we go a bit higher around the $63,800 to the ~$65,000 range.
If my count is right, we are creating a 3-3-5 flat where 'C' is generally equivalent in length to wave 'A'.
The price action on the 4hr chart between 6/22-6/29 is largely the reason for my contention we are NOT in the middle of an impulse wave beginning a new 5 wave cycle upward. This small area of price is corrective in nature as it's composed of 3 waves in the direction of the high level trend, meaning the corrective sequence is continuing.
However, it can be part of a 3-3-3-3-3 diagonal making up the first leg of wave 'a' of the overall B wave we've nearly completed. Another important point is that within wave B, wave c is nearing a 1:1 ratio of wave a.
I've discovered a volume signature that often (but not always) confirms a wave count hypothesis on nearly all degrees. Without going into too many details, a very common impulse wave 3 of 3 confirmation volume is a volume bar reaching ~2.618 standard deviations (21 period).
The next confirmation occurs with the subsequent wave 3 of 5 position volume hitting 1.618 standard deviations (21 period) - these two obviously create a divergence, but it's the standard deviations that have proven reliable in confirming/supporting counts. It is much, much more nuanced than this, but the concept very important to substantiate my wave count. It's important to note that the above volume signature occurs almost exclusively in impulse waves as part of the larger trend and among the five waves of one degree lower of a five wave 'C' wave. Given the fractal nature of the markets, this has proven quite reliable on nearly all time frames (I generally use 13D, 3D, 1D, 4hr, 1hr, 15min).
If you’re interested in knowing how I do this in Tradingview, let me know and I’ll gladly explain.
Now, this brings me to my final point. In the high time frame Wave A, you have this volume signature occurring in the wave c of A. This means the low on May 19th culminated a wave 3, with the wave 5 concluding on June 22nd. From the 6/22 low, you have the aforementioned price action between 6/22 and 6/29. Had this completed the entire correction, the price action between 6/22 and 6/29 would’ve been impulsive in nature. In fact, this little area of price action completely changed my viewpoint on this.
It won’t be until $66,000-$69,000 that I’ll start looking for a higher probability wave count. Remember, ‘”B” waves can rise above the overall trend high put on before the correction started. Just because BTC rises a few dollars past its ATH doesn’t mean the correction is over. Note the ~$27,000 area is around the .618 retracement of the recent five wave sequence (‘bull run’), and Bitcoin LOVES his fib levels. On the 4hr, there is a textbook 5 wave sequence (c of B) with the volume already looking to confirm this sequence and its subsequent end.
Please give me your thoughts and tell me I’m wrong. I love Bitcoin, but have to leave my bias at the door.
Justin
If my count is right, we are creating a 3-3-5 flat where 'C' is generally equivalent in length to wave 'A'.
The price action on the 4hr chart between 6/22-6/29 is largely the reason for my contention we are NOT in the middle of an impulse wave beginning a new 5 wave cycle upward. This small area of price is corrective in nature as it's composed of 3 waves in the direction of the high level trend, meaning the corrective sequence is continuing.
However, it can be part of a 3-3-3-3-3 diagonal making up the first leg of wave 'a' of the overall B wave we've nearly completed. Another important point is that within wave B, wave c is nearing a 1:1 ratio of wave a.
I've discovered a volume signature that often (but not always) confirms a wave count hypothesis on nearly all degrees. Without going into too many details, a very common impulse wave 3 of 3 confirmation volume is a volume bar reaching ~2.618 standard deviations (21 period).
The next confirmation occurs with the subsequent wave 3 of 5 position volume hitting 1.618 standard deviations (21 period) - these two obviously create a divergence, but it's the standard deviations that have proven reliable in confirming/supporting counts. It is much, much more nuanced than this, but the concept very important to substantiate my wave count. It's important to note that the above volume signature occurs almost exclusively in impulse waves as part of the larger trend and among the five waves of one degree lower of a five wave 'C' wave. Given the fractal nature of the markets, this has proven quite reliable on nearly all time frames (I generally use 13D, 3D, 1D, 4hr, 1hr, 15min).
If you’re interested in knowing how I do this in Tradingview, let me know and I’ll gladly explain.
Now, this brings me to my final point. In the high time frame Wave A, you have this volume signature occurring in the wave c of A. This means the low on May 19th culminated a wave 3, with the wave 5 concluding on June 22nd. From the 6/22 low, you have the aforementioned price action between 6/22 and 6/29. Had this completed the entire correction, the price action between 6/22 and 6/29 would’ve been impulsive in nature. In fact, this little area of price action completely changed my viewpoint on this.
It won’t be until $66,000-$69,000 that I’ll start looking for a higher probability wave count. Remember, ‘”B” waves can rise above the overall trend high put on before the correction started. Just because BTC rises a few dollars past its ATH doesn’t mean the correction is over. Note the ~$27,000 area is around the .618 retracement of the recent five wave sequence (‘bull run’), and Bitcoin LOVES his fib levels. On the 4hr, there is a textbook 5 wave sequence (c of B) with the volume already looking to confirm this sequence and its subsequent end.
Please give me your thoughts and tell me I’m wrong. I love Bitcoin, but have to leave my bias at the door.
Justin
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