BTC/USD
Just a quick update going into next week for Bitcoin . I’ve been bearish and I’m still not 100% convinced that this is indeed a bull run, but this does look strong. So if you are interested in taking a look at both perspectives, let’s update the bearish scenario as well as take a look at the more bullish possibility.
Looking at the macro with a bearish view, I have been looking for a triangle. While this is still possible, it was more relevant back at our original rejection from $12.4k. So going forward my bearish bias has shifted further away from the triangle and more towards a flat correction to pair with our small run up last summer. Don’t get me wrong. We look strong. Bitcoin is intimidating to be trying to short right now and what we have seen over the last week has been a pretty big capitulation spike from the bears. But the reality is, looking at Bitcoin’s macro, we had a capitulation from $20,000 to $3,100 and been stuck in a range below it ever since. As a result, it is really going to take a MAJOR shift in order to turn this macro trend from a bearish one into a bullish one. I mean this thing can literally go to $26,000 and STILL be considered a BEAR market rally. I know how ridiculous that sounds. But that’s the kind of situation that you are given when an asset crashes from $20,000 to $3,000. And the cryptocurrency markets are a perfect representation of gambling and FOMO. So seeing moves like we have seen over the last few months should not come as a surprise.
From here, what I am looking for is continuation up to $13,609 - $14,676 before potentially seeing another leg down. The primary target on the downside of things is $5,200. But this is a running flat which are pretty bullish structures. So it could only end up making it to about $9,000.
However, if you are someone who is looking at this more long term, who can afford to see downside as long as it is profitable in the long run, these levels are not terrible to be buying at. I mean targets following the completion of this flat are as high as $109,000. Is that realistic? I can’t say, but there is very little doubt that another cryptocurrency bull run is coming eventually.
In the short term here, the only thing I would recommend is patience. We are going to range sideways here for a bit. Not only from a structural standpoint but the market needs to find out if people are really interested in buying at these levels. So don’t get worked up thinking “Ugh I’ve got to get in cause this thing is going to the moon”. Let the market work itself out.
Using time analysis, we should see consolidation until October 27th or November 1st. If we are going to continue higher here, then we haven’t even begun the 4th wave yet and the move up is only on a sub-degree. So chill. Let the emotional traders trade while sitting this out.
Looking at this from a bullish perspective, there’s not much to say. I would rather view this as a corrective structure, instead of breaking fundamental EW rules or forcing an extremely ugly impulse to be there when it likely isn’t, until proven otherwise. The march 12th sell off was unprecedented and no doubt had a substantial impact on the overall structure of the market. However, I refuse to ignore basic and fundamental tenants of EW - a strategy that I have worked tirelessly to try to perfect since the day that I started trading - just to fit a narrative that very likely isn’t there.
The strongest argument in favor of the bulls is what has been going on with momentum. And what has happened over the recent weeks has never happened before for Bitcoin .
I have never seen an asset breakdown into bearish control, which is consistently indicative of a breakdown of the macro trend, only to break back into bullish control in less than two months and hold support there. Regardless of whatever can be said about price action, Bitcoin’s momentum just began a new bullish trend .
So upside for Bitcoin in the short term, or even the next few months potentially, looks fairly strong and is almost a certainty at this point. However, I would urge caution and to tread carefully as we approach critical technical levels as well as fundamental events that could have a lasting impact on financial markets around the globe. Good luck, my friends, let’s see how this plays out.