Next station 30k BTCUSD @ Crappy Trader Notes #7

BTCUSD experiences rapid price surge. Is it a bullish trend reversal or a sophisticated bull trap? What is the most probable next stop for a price action? Is it reasonable to call 30k levels at today’s “bullish” price action?

100k imminent! Diamon hands! When lambo?

Let’s start with the optimistic, bullish perspective. Right now the key bullish factor is the fact that the major trendline has been broken. So plenty are calling a bottom in trend reversal. One should expect a low volume retest into the trendline so if we are in a new bullish trend a down move to 35–37k BTCUSD on declining volume is probable.

No more bullish indicators at this moment so let’s share a different perspective.

Bears at helm. This is just a correction in a long bear market

Current price action can be seen as a correction on the way down.

This claim is supported by the bearish price & volume action. As we can see the surge is accompanied with declining volume on a daily chart so one should be extremely careful to call this move a reversal.

It is also supported by the Elliot Wave count.

Here is a most probable count that explains current price action. As we can see, we are after third wave down and experiencing a wave-4 correction.

Although the scale of the correction is uneasing but still the count is valid as none of Elliot Wave principles are broken. One may also notice that it is consistent with one of the hints stating that wave-4 usually retraces to wave-4 levels of the one level smaller waves.

We are also at a very important invalidation point. Here is an invalidation area marked. In case the price rises above it current wave count will be invalidated and alternate count should be in place. So we should see in a couple of weeks how it works out.

One more remark about probability of the reversal. Usually an accumulation trading range precedes move up. Changing a trend is like turning an oil tanker. It requires time and effort. Current price action is more like a turn on a dime which is rather unexpected characteristics for a reversal. Here is some historic data showing that each previous change of trend was accompanied by a weeks long trading range. None can be experienced now.

Summary

Another leg down is highly probable at the moment. We expect that sub 30k levels will be seen. For bulls good news is that we are nearing the true trend revesal and up continuation. Current demand can be seen as an early bird of incoming reversal, co called preliminary support that precedes the final trading range.

Probability that current rally is an uptrend move is low. Beware of hopium as early bulls can be trapped.

Trade carefully and keep liquid.

More reading

If you want to see how did i come to current predictions i recommend reading previous chapters of the blog. Therefore you can follow my reasoning and see how genuine my remarks are.

Do you find my work worthwhile?

If yes then you can support my efforts by any of these:

--

--

Get the Medium app

A button that says 'Download on the App Store', and if clicked it will lead you to the iOS App store
A button that says 'Get it on, Google Play', and if clicked it will lead you to the Google Play store
Yenten Observer

Cryptocurrency freak. Freedom, ecology and free market above all.