Bitcoin’s Short-Term Elliot Wave Count Looks Bullish
Tracking the rally from the June 18 low
Although I may have called the actual June 18 low for Bitcoin (BTC, see here), the Bulls still have plenty of work to do before I can give the all-clear sign. Namely, trading is not about nailing tops and bottoms -most actually buy at the top and sell at the bottom. Indeed, they nailed it but not in the correct order- but it is about being on the right side of the trend.
Thus as an analyst who primarily uses the Elliott Wave Principle (EWP) I want to see five waves up. Either as an impulse or as a diagonal. I have been tracking these two patterns for my premium crypto trading members over the past month. See Figure 1 below.
Figure 1. Bitcoin daily chart with detailed EWP count and technical indicators.
Five waves are not yet completed: caution is still advised
Although the Bulls have been able to rally price above the 1st warning level for the Bears ($22390), and the cryptocurrency is trading back above its 50-day simple moving average (blue line), they have not been able to break the 2nd warning level ($25840) yet.
Besides, there are not five waves up from the June 18 low yet. I am tracking a leading diagonal (LD, green) wave-1/a pattern, which still requires a last (grey) smaller wave-v. For now, it appears wave-iv is still underway and should ideally find support in the $22,000-22,500 region. From there, wave-v should then materialize, targeting ideally around $27,5K+/-1000.
Note that LD’s are overlapping patterns, and there are not as many rules as for an impulse; other than the 3rd wave cannot be the shortest. Meanwhile, BTC has been making higher highs and higher lows since June 18. That is a Bullish sequence, and the cryptocurrency needs to stay above last week’s low ($20,733) to keep that pattern alive. I do not want to see this level broken to the downside as that allows the Bears to take control once again for a possible drop to $12-17K.