I have stated on more than one occasion that I suspect that $316 will hold (on a daily closing basis). However, it would not surprise me if there were to be an intraday spike low that reached lower in the days ahead. For Elliott Wave reasons, I would be VERY surprised if the price went below $266, even briefly.
Elliott Wave has but a few rules which can not be broken. One of them is that a wave four can not overlap a wave one. As my preferred wave count holds that we are at the tail end of a wave four, the April 2013 high can not be breached. (If that happens, my current wave count will be proven incorrect.) As I do not yet see a reason to believe my wave count is wrong, I do not expect an intraday spike to go that low.
The breakdown is happening with increasing speed these last many hours. One support after another on all time frames are failing. Such a breakdown should not be surprising to those who have been trading long enough to have seen how bear markets often end violently.
The highlighted area is where the market was at the time of yesterday’s weekend update. As expected in that update, both the 2nd arc and the blue 1×1 Gann fan line have failed as support since then.
Above, you can see the highlighted area in more detail. Note that the price tried to stay in the 2nd arc for two candles (purple) but could not. It then fell, but found brief support at the 1×1 line (red). It has since broke below that support.
The bottom of the current square is at $325 on the 5-hour chart and $336 on the 2-hour chart. I would not be surprised if there were not a bounce at both these places. (It may perhaps take another day or two to get to $325.) However, I would not necessarily think that a $325 bounce means that the bull market has begun. It would certainly mean we are getting close.
Mind you, the difference between buying at $325 and $300 means very little to an investor who plans on holding the coins long term. When/if Bitcoin goes to $5,000 per coin, the difference between buying at $315 and $300 will be almost nil. It is only to active day traders that I suggest that $325 may not be the best time to buy.
When this market finally bottoms, likely in less than a week from this writing, there will undoubtedly be some big news item on that day. Less educated traders and pundits will be shouting from the rooftops that the markets turned because of that news. But it won’t be because of the news. Markets don’t turn because of the news. The biggest news of the year was the Microsoft announcement they will start accepting Bitcoin for their applications. But the markets did not turn up on the bullish news. The Microsoft news mattered little because the charts, market geometry, dictated that it was not yet time for the bear market to end. That time is almost here. But not just yet.
Our short position, opened at $380 as advised on these pages last week, remains open. But stay sharp. The time to reverse to long is approaching. There will likely be a bounce at $325. If you are a long term investor, it WILL be a great place to buy. If you are an active trader, I think there will be a better place to buy a day or so later, if our timing is perfect. We will see….
The price ratio page shows there are currently more sellers than buyers.
Happy Trading all!
Trade and Investment is risky. CCN accepts no liability whatsoever for losses incurred as a result of anything written in this Bitcoin price analysis report.
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