Bitcoin price headed higher earlier today, in what looked like a return to advance. However, there is a technical reason to believe that the current price correction is incomplete.
Bitcoin Price Analysis
Time of analysis: 14h30 UTC
BTCC 1-Hour Chart
From the analysis pages of xbt.social, earlier today:
Price has found support at a long-term support and resistance level (dashed grey).
Consolidation may now happen above this level prior to the next wave of advance. That is one scenario. The other is that price just keeps advancing along the trajectory of the rising Fib line it has been tracing, as well as the support offered by the 1hr 200MA.
Another scenario, equally likely, is that price completes a large correction to the downside – completely unexpected for now, but entirely feasible:
Elliott wave principle shows that corrections usually unfold as three-wave structures. From the high in this chart, in a one interpretation, there has been a single wave down and a more recent wave to the upside (that peaked earlier today). If we assume a last wave of correction to the downside then it should target the 1.618 Fib extension near 2100 CNY and $340 (Bitstamp).
This path of price – if it unfolds – will represent a deep correction which is usually associated with the second wave of a larger five-wave advance. Wave 3 from the red Fib line at the chart’s bottom should be strong and see bitcoin making good price gains.
This outlook discussed above is speculative but certainly possible. The final declining wave could be swift and may not signal clearly before it happens, but traders should keep their eyes open for bearish indications in the 15min and 1hr charts.
Bitfinex Depth Chart and Buy/Sell Volume
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Bitcoin price charts from TradingView.
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