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On this episode of NewsBTC’s daily technical analysis videos, we look at a potential bottoming state of affairs in Bitcoin value primarily based 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, both 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 wanting very nice in the mean time. Solely the Parabolic SAR is presently exhibiting any sort of indicator assist beneath day by day value motion.
Why Bitcoin May Spend A lot Extra Time Shifting 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 degree 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. Until Bitcoin levels a particularly quick reversal like 2018, there may very well be many extra months of sideways forward.
Evaluating previous bear market bottoms we are able to see that it took one other 9 months after turning pink to flip inexperienced through the 2015 bear market, whereas it solely took half that point through 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
By way of a backside, it may very well 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 through 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 may very well be ending on the actual 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 may very well be presently forming in Bitcoin in case you activate the road chart and take away wicks. With wicks eliminated, Bitcoin has made a brand new low beneath the wave 3 low, and may very well be within the midst of an ending diagonal earlier than reversing.
The provided 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 location of the expanded flat correction. Expanded flats seem both at a wave 2 or wave 4 throughout a bigger impulse wave cycle. Which means that both wave 5 continues to be left, or probably waves 3, 4, and 5 stay.
In a single state of affairs, 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 to date.
The alternate state of affairs makes the 2021 rally wave 1 of 5, and this present correction wave 2. The one approach that is potential is that if your entire 2018 bear market was half of a bigger Elliott Wave triangle sample. A triangle will be drawn, but it surely doesn’t fairly match the foundations of Elliott Wave Theory.
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