BITCOIN - Short Term Perspectives

Today there is a bit of short term sea change here as pre-market Nasdaq is up 0.5% but BTC is down 2.4%, so for the first time in a little while they are diverging.

So whats going on here 🤔?

Well its now fairly apparent that BTC has just topped in the short term and here's a list of things to evident that:-

• BTC has yesterday printed a Shooting Star candle which is bearish and that bearishness is currently being reinforced by today's bearish candle which if it closes here or lower will be an Evening Star candle pattern.
  
  
• BTC has printed a wedge ascending channel which is bearish. If BTC had gone on a flurry up further then things may have been different but since it has poked up out of the ascending channel only to fall back in - this is a Shakeout Reversal Pattern both through the channel top and the 1:1 fib. It is designed to trap buyers thinking its a breakout only to fake-them-out and swing back then other way.
  
  
• Within the channel we've had 5 waves which in Elliott Wave is typical and the thrust upward may have been an E wave from which now BTC will trend to the downside.
  
  

With all that said its not impossible for BTC to perform another faked move to swing back to the upside and continue on up but it seems unlikely.

And so if it is assumed that 18 June low to 20 July top is one corrective wave then the potential retracement can be taken as is on the chart and just as before I have banded the retracement Shakeout Reversal Zone as before but this time in orange. This is the area of retracement overshoot where price moves passed log 0.618 to fool shorts that it is going lower just the same as the SRP mentioned previous. So it doesn't have to get there, but that is an attractive reversal point and in the previous move there were 3 circled touches to with that blue band. It doesn't have to get there tough. If things are turning more bullish it may only get to the 0.382 or 0.5.

So in a nutshell it looks like the first wave of this probable accumulation has now completed and from here there will most likely be another corrective wave down. If it gets to the orange band that can be a good area to buy, however if BTC falls much below it then there could be another collapse down. I dont think thats going to happen as its already very deep here relative to trend, but you never can be 100% sure.

But anyhow alts are WAY UP from my entry point so whatever happens here its not of enormous significance for those trades and also some crypto related stocks RIOT and MARA. And what a waste of time it may have been for anyone that only bought BTC.

Just as I'm writing this Nasdaq is now up 1% pre-market and BTC is back up to -1.72%. So we'll see how this day closes.

"Short" denotes probable trend direction. NOT SHORTING.

Not advice.

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5 reversals at the 1:1 and you can see how relevant fibs are to the market movers. Big star LTF here so probably heading down albeit with some possible shenanigans.

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Here is yet another example of how BTC market movers create ambiguity to confuse. From one perspective BTC is currently re=testing and potentially consolidating the 1:1 fib.

But from another it has potentially topped in the short term now moving correctively to the upside in an ascending channel (bearish) within an ascending channel (bearish).

Btw when I say "bearish" it is only relative to that pattern. For example an ascending wedge will generally break to the downside to complete the pattern, but from there potentially "pattern separation" can occur and a bullish corrective pattern can form.

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The daily chart printed a star that was then followed by a hanging man. This is indicative of a crash structure potentially, however looking at the candles in isolation it could simply be a retracement to continue higher.

It is only due to the ascending channels that I'm slightly bearish short term, but you never know, perhaps we will consolidate and go higher and for the reason most of my positions are still live although I have exited a few.

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Also - the ABC is just an example since the candle has not yet closed. It could also go higher and still fall through the lower trendline to the same effect.

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And so BTC did fall out of the ascending channel and now forms a head & shoulders where the right shoulder completes a B wave and BTC is currently printing C.

How far will C fall 🤔?

Well thats the million $ question, but perhaps it may be a 1.618 extension because that would take it to the lower trendline of the ascending wedge and also to the top of the orange retracement band which as mentioned previously can be an attractive reversal point.

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It will get to 20K again.

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BTC is looking very corrective to the downside and this is exactly what crypto buyers should want.

The ABCDE is one wave (which could be a higher degree W) and now we should be in the next wave in opposition to that. So if we were to see a steep sell off the obviously that would somewhat be cause for concern, but here the descent is more shallow and corrective than previous B and D waves.

This is "pattern separation" corrective up and corrective down and should be the calm before the storm.

Not sure about 20K now my guess is it will probably touch the orange band and not go much lower but its just a guess.

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Correction here at some point during this thread my orange band moved, so here it is again with retracement fibs.

Not much to say really it may drift, it may shallow bounce, it may fall, ( I have a hunch it will fall, but if it hits that orange band again i'm going to buy more alts, sell more leap puts on MARA and RIOT to take advantage of high implied volatility and more BITO short puts and long calls.

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I've added 2 yellow horizontal trendlines that sit on the crossover between the two SRZ retracement bands. Price seems to attract to multiple targets and so I wouldn't be surprised if at least the upper yellow trendline gets hit and perhaps it will be just a brief touch. But anyhow I'll be buying in the orange band.

And its a big bearish momentum candle and so it looks like its heading lower though it may take 3 waves to get there.

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And just to note on potential duration - the last accumulation phase lasted 62 days.

And the 2018 low was 108 days! My gut says it wont take that long but obviously its on the table.

This is the duration if it is 62 days again.

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Look at these fast shakeout reversal patterns (SRP) - goes one way then "surprise suckers!" its a trap to go lower - and 2 in a row. This is why crypto is a minefield to trade short term and probably best avoided unless there is something very obvious with plenty of confluence.

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And now that BTC is falling it becomes clear this is another wave down and so this is now already wave 3 of 3 because - it is (i think) a double three where first we had an ABCDE W wave, then last pivot up makes the X wave and now for for last wave down it can be another combination.

It doesn't really matter what the last combination is - what mattered is to find the third (Y) wave and use fibs to find the target which a 1:1 with a little overshoot gets to the orange band. And seeing 5 corrective waves means possible wave completion.

If when it gets there I think I may play The Wheel using weekly puts and potentially weekly covered calls. There is a youtube vid by "Thetagang" on it for anyone who wants to check it out.

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Also notice how each of the 5 waves bounced to and from each trendline, but the 6th wave that i've labelled X did not. And we've got this longer term lower trendline of the ascending wedge in this area so perhaps its going to hang around a while before dropping to the orange band and that will provide 3 waves down to complete the WXY.

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BTC climbing up the lower ascending channel here and may push up and away but it looks very corrective here and even if it does it will probably be a regressive wave before it plunges lower and down to the orange band.

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Very exotic.

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So BTC went wild with the FED hike today and having hit 85 I've sold my MARA and RIOT longs and opened a weekly put against BITO.

There may be quite a lot whipsaw the next little while and BTC looks very overextended in the short term here.

I still have all my alts open and BITO leap short puts (long term bullish). Not touching those till maybe Christmas now.

Still dreaming of the orange band being hit to add some more and buy back in.