On this episode of NewsBTC’s day by day technical evaluation movies, we look at a potential bottoming situation in Bitcoin worth based mostly on a possible expanded flat correction and an ending diagonal.
Check out the video beneath:
VIDEO: Bitcoin Worth Evaluation (BTCUSD): October 11, 2022
Bears and bulls are battling it out as soon as once more, all sides making an attempt to take management over day by day momentum. Biking via indicators just like the Bollinger Bands and the Ichimoku present that Bitcoin isn’t trying very nice in the mean time. Solely the Parabolic SAR is at the moment exhibiting any sort of indicator assist beneath day by day worth motion.
Why Bitcoin May Spend A lot Extra Time Transferring Sideways
The LMACD reveals that bulls nonetheless have the higher hand on the 3-day timeframe, and the final weekly candle closed with a confirmed bullish crossover on the identical instrument. The LMACD turning inexperienced from this stage has put within the backside throughout previous bear markets.
However on month-to-month timeframes, bears have turned the histogram purple after opening pink. Pink is an indication that bearish momentum is weakening. Except Bitcoin levels a particularly quick reversal like 2018, there could possibly be many extra months of sideways forward.
Evaluating previous bear market bottoms we will see that it took one other 9 months after turning pink to flip inexperienced throughout the 2015 bear market, whereas it solely took half that point throughout the 2018 bear market. With Bitcoin month-to-month momentum not even confirmed pink but, the highest cryptocurrency may have anyplace between 120 days and 275 days to go earlier than issues start to show round. Ouch.
Linear scale breakout leaves room leftover in log scale | Supply: BTCUSD on TradingView.com
The Finish of The Expanded Flat Correction Is Close to
When it comes to a backside, it could possibly be close to. Bitcoin seems to be ending the final leg of an expanded flat correction. An expanded flat is an ABC correction with the next excessive throughout the B wave, and a decrease low on the C wave.
Expanded flats type in a 3-3-5 sample, with two zig-zags and an impulse wave down. The C wave serves because the impulse wave with 5 sub-waves. Expanded flats sometimes terminate within the C wave on the 1.618 Fibonacci extension of the A wave. Taking the Fibonacci retracement instrument set for the golden ratio extension, and the ultimate wave 5 could possibly be ending on the precise goal.
Expanded flats generally terminate with an ending diagonal within the fifth wave of the construction. An ending diagonal has 5 sub-waves itself, and appears like a falling wedge – a sample that could possibly be presently forming in Bitcoin for those who activate the road chart and take away wicks. With wicks eliminated, Bitcoin has made a brand new low beneath the wave 3 low, and could possibly be within the midst of an ending diagonal earlier than reversing.
The equipped diagrams present how the wave counts match up effectively sufficient, however is lacking the ultimate blow to bulls earlier than the underside is lastly in. Don’t consider in such a factor as an ending diagonal? Take a look at how the identical factor ended the bull market in 2021.
The place In The General Crypto Cycle Are We?
Lastly, the final piece of the diagram we’re evaluating, is the position of the expanded flat correction. Expanded flats seem both at a wave 2 or wave 4 throughout a bigger impulse wave cycle. Because of this both wave 5 continues to be left, or probably waves 3, 4, and 5 stay.
In a single situation, Bitcoin bottomed in 2018, and the 2019 peak was wave 1, adopted by wave 2 on Black Thursday. Then, wave 3 started in 2020 into 2021, and we’ve spent all of 2022 in wave 4 thus far.
The alternate situation makes the 2021 rally wave 1 of 5, and this present correction wave 2. The one means that is potential is that if all the 2018 bear market was half of a bigger Elliott Wave triangle sample. A triangle may be drawn, nevertheless it doesn’t fairly match the foundations of Elliott Wave Concept.
