BTC - Positive breakout but overall market weakness is suggesting caution
Elliott Wave Analysis | BTC CMP: 71500 | Dt - 29th Oct'24
Tl;dr - BTC, which has just broken out of its long standing pattern looks set for an upward surge, however, it may be a bull trap given overall market weakness. One should be careful as we are likely in final stages of BTC’s long term 5 wave advance. The ABC decline will be brutal and is likely not worth the risk.
Simple Speak
BTC has broken above its long standing channel and looks all set to scale new heights.
However, one should be cautious given overall market weakness. Eg: SPX & QQQ. It might end up being a Bull Trap!
We should wait for BTC to cross 74K to confirm this breakout.
Moreover, even after 74K, there are multiple strong resistances around 89K & 100K, which may become Wave 5 tops starting a massive downward price movement. Caution is the word for BTC from here on in
Chart Speak
Previous update - 22nd Oct’24
Tl;dr - BTC, which has been in an impulse wave since its inception around 2012. It has either completed the five wave impulse pattern or is in final stages. Given the sluggish nature of price movement off-late, the wave count is not ultra clear and hence both the scenarios are possible. If the price breaks above $73K, then it will bolster the odds of the last Wave 5 high. If it fails to break above then the odds for a massive A-B-C correction would increase. Both the scenarios are explained below.
Simple speak
If BTC fails to break above $73K then it should head lower over the next few months. Likely to hit $15K (high probability) or even $3K (low probability).
However, if it breaks above $73K then it can reach $90K-$100K, before starting a massive A-B-C correction, taking the price significantly lower.
Wave Count - Interpretation 1
BTC Chart #1 - Zoom Out
BTC Chart #2 - Zoom In
TA speak - Elliott Wave analysis by AlgoChirp
BTC Wave 1-Wave 5 impulse wave that started in 2012 is in its final leg. After the ongoing Wave 4 of a smaller degree the Wave 5 advance should start. This advance will be the end of Wave 5 impulse on three different degrees and should be followed by a significant decline in A-B-C pattern.
Final Wave 5 advance should see the prices reach $90K-$100K levels, if not higher. We expect this advance to be weak and end with significant RSI divergence.
Alternate count - If BTC fails to break above the expanding diagonal pattern highlighted in the Blue chart then we will be forced to consider an alternate wave count, called out as Interpretation 2 below
Wave Count - Interpretation 2
BTC Chart #3 - Zoom Out
BTC Chart #4 - Zoom In
TA speak - Elliott Wave analysis by AlgoChirp
BTC Wave 1-Wave 5 impulse wave that started in 2012 is already over and BTC has now started the corrective wave pattern (A-B-C). As part of this corrective wave pattern, currently Wave B is playing out.
This wave should be followed by a sharp correction in Wave C. As part of this correction, BTC should drop to either $15K or $3K.
Alternate count - If BTC breaks above the triangle pattern then Interpretation #1 explained above will be the leading Wave count.
Interpretation #1 vs #2
BTC is currently making an expanding triangle and beginning of Wave C is an odd place for this pattern to play out and that is why Interpretation #1 is the leading wave count for us. A break above or below this pattern will determine which count remains valid long term.