Bitcoin Price Rebounding Strong
As my readers likely know, Bitcoin price has been marching higher for the past 40 hours or so. $304 provided support to stop the panic selling of a couple days back, and has since propelled the price higher. We now see ‘Elliott Waves of 5’ pointing upwards. Hence, we now expect the worst of the selling to be over.
What’s next?
Most traders do not yet know the selling is over. They don’t trust this rally and are, therefore, not aggressively buying. They are waiting for the other shoe to drop. When the next pullback begins, they will expect that new lows are coming. It is only when the selling stops, making a higher low, that the average trader will begin to recognize what is happening. As traders begin to recognize that higher lows are being made, buying will increase at an increasing rate. By definition, such mass recognition can not occur until AFTER the next pullback. (This is the reason Elliott wave 3s are often the most exciting wave.) How low will the next pullback go? My best guess is that it won’t break $312. But we will see.
3-day Chart
We are now in the candle that includes 12/22 (We have expected 12/22 to be a high energy time for quite some time now). I now suspect the cycle low was made by the last candle. It made it’s low when it encountered 2nd arc resistance on the bullish setup shown above. Note that the time was the end of the last square. The end of a square often sees price reversals. Price has now penetrated the arc pair.
Daily Chart
As you can see, we are very close to the 5th arc on this bearish setup, and one day from 12/22. It will not surprise me if a pullback begins today or tomorrow, which touches that arc. Often, price has to touch resistance before it leaves, like a man kissing his mistress before he drives off to work.
5-hour Chart
Isn’t this chart amazing? Note how price rallied as soon as it was free of that 3rd arc resistance, which had been tormenting it for months! Resistance is at the top of the square ~ $345.
2-hour Chart
Price is now encountering 2nd arc resistance, which I expect will yield. It is climbing up the Gann 2×1 fan like as if it has been surgically attached! This is a very bullish chart, at the present time.
Why 12/22?
When I noticed several months ago that the charts of many forex pairs showed 12/22 as an energetic time, I took notice. I couldn’t help speculating what “the big news” of 12/22 would be. At the time, I thought it would involve China. Maybe they were going to launch a gold-backed yuan or something like that.
Today, it seems if there some news that moves forex markets is imminent, it will (perhaps) involve the collapse in some derivatives linked to the dramatic fall in oil price, or perhaps the default of some nation like Russia, which saw it’s currency get mercilessly hammered all last week. This is all speculation. Maybe none of this will happen. But I can’t help but suspect that something big will hit the newswire quite soon. If so, the charts knew about it months ago, as counter-intuitive as that sounds. We will see soon enough…
The price ratio page shows there are currently more sellers than buyers
Addendum: For personal reasons I will be unable to write any articles for CCN.com for at least a few weeks, after this week.
Happy Trading all!
Disclaimer: Trading is risky. Past success is not a guarantee of future profits. CCN.com assumes no liability for any losses suffered as a result of this analysis.
