In this episode of NewsBTC’s daily technical analysis videos, we study a potential bottoming situation in Bitcoin worth based mostly on a possible expanded flat correction and an ending diagonal.
Take a have a look at the video under:
VIDEO: Bitcoin Price Analysis (BTCUSD): October 11, 2022
Bears and bulls are battling it out as soon as once more, both sides attempting to take management over each day momentum. Cycling by way of indicators just like the Bollinger Bands and the Ichimoku present that Bitcoin isn’t wanting very nice in the mean time. Only the Parabolic SAR is at the moment exhibiting any sort of indicator help under each day worth motion.
Why Bitcoin Could Spend Much More Time Moving Sideways
The LMACD exhibits 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 software. The LMACD turning inexperienced from this stage has put within the backside throughout previous bear markets.
But on month-to-month timeframes, bears have turned the histogram purple after opening pink. Pink is an indication that bearish momentum is weakening. Unless Bitcoin levels an especially quick reversal like 2018, there might be many extra months of sideways forward.
Comparing previous bear market bottoms we are able to see that it took one other 9 months after turning pink to flip inexperienced in the course of the 2015 bear market, whereas it solely took half that point in the course of the 2018 bear market. With Bitcoin month-to-month momentum not even confirmed pink but, the highest cryptocurrency may have wherever 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 | Source: BTCUSD on TradingView.com
The End of The Expanded Flat Correction Is Near
In phrases of a backside, it might 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 in the course of 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 usually terminate within the C wave on the 1.618 Fibonacci extension of the A wave. Taking the Fibonacci retracement software set for the golden ratio extension, and the ultimate wave 5 might 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 might be presently forming in Bitcoin if you happen to activate the road chart and take away wicks. With wicks eliminated, Bitcoin has made a brand new low under the wave 3 low, and might be within the midst of an ending diagonal earlier than reversing.
The provided diagrams present how the wave counts match up properly sufficient, however is lacking the ultimate blow to bulls earlier than the underside is lastly in. Don’t imagine in such a factor as an ending diagonal? Check out how the identical factor ended the bull market in 2021.
Where In The Overall Crypto Cycle Are We?
Finally, 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. This implies that both wave 5 remains to be left, or probably waves 3, 4, and 5 stay.
In one 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 to date.
The alternate situation makes the 2021 rally wave 1 of 5, and this present correction wave 2. The solely method that is potential is that if the complete 2018 bear market was half of a bigger Elliott Wave triangle sample. A triangle could be drawn, nevertheless it doesn’t fairly match the principles of Elliott Wave Theory.
