We warned in our last column on Bitcoin that the correction had not yet ended. I suggested that there was likely several more days of pain coming for the bulls. The reasons were many, but one of them was that the rise had simply been too steep and too long without a meaningful correction for it to be over in just a day or two.
Well, the bottom fell out yesterday. Is that the end of it, or is there more to come?
Here is bull setup on an 8-day chart:
Here we see that the present fall is testing the 4th arc pair for support at 766. Price is also at the same level as a recent swing high. That support could hold, but I am not prepared to buy this chart yet. If support breaks, it will look for support at the 1×1 Gann angle.
Here is a look at an 8-hour chart:
Here we see that price is sitting exactly on 2nd arc pair support. I must admit, this is a very tempting place to buy this chart. Given the chart above, this support might hold here.
However, the 2-hour chart is not quite as enticing:
The present low of the 2nd wave of selling was exactly 50% of the depth of the first wave of selling. Hhhmmm…. This is another reason to buy here actually. There are several reasons to close any shorts here!
However, it is uncommon for a 4th arc pair to stop a steep fall such as this one. The 5th arc pair is much stronger, typically. And I note that the 5th arc pair lies at the point that the 2nd wave of selling will be .786 of the 1st wave. That would bring the price to the $663 area.
In any event, this correction was way overdue, and it was necessary. It will end relatively soon now, I think. We will see…
Happy trading!
Remember: The author is a trader who is subject to all manner of error in judgement. Do your own research, and be prepared to take full responsibility for your own trades.
Featured image from Shutterstock.
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