Bitcoin, 16 Nov. Capitulation candle?
Bitcoin is likely completing a wave (c) to the downside. The move came as a surprise to many, but ETH gave us some technical hints that the top was in. Let's take a look at potential reversal zones.
Elliott:
On the 1h timeframe we can see 5 complete waves to the downside, indicating that wave (c) could be complete. At roughly 58,300 we have the 1.618 extension of wave (a), and also the 1.5 extension of the pitchfork.
Geometry:
The .236-.382 fib levels are marked with the blue box, a potential reversal zone.
Gann:
Support: 58245, 54492
Resistance: 62124, 66127
Correlations:
It looks as if the inverse correlation between DXY and BTC is back, at least when DXY shows strong momentum like yesterday. DXY is running into resistance at 96, which suggests that the correlation may break down again.
How I trade it:
Capitulation candles give us an exceptionally good risk/reward ratio - if we can keep emotions under control. The key is to gradually build back positions. The levels marked with BTO (Buy to open) could be interesting. The idea is to trade the next wave to the upside, in case our ABC count is correct. The idea is invalidated if one more major wave to the downside unfolds and we can count a 12345 to the downside, instead of an ABC.
Elliott:
On the 1h timeframe we can see 5 complete waves to the downside, indicating that wave (c) could be complete. At roughly 58,300 we have the 1.618 extension of wave (a), and also the 1.5 extension of the pitchfork.
Geometry:
The .236-.382 fib levels are marked with the blue box, a potential reversal zone.
Gann:
Support: 58245, 54492
Resistance: 62124, 66127
Correlations:
It looks as if the inverse correlation between DXY and BTC is back, at least when DXY shows strong momentum like yesterday. DXY is running into resistance at 96, which suggests that the correlation may break down again.
How I trade it:
Capitulation candles give us an exceptionally good risk/reward ratio - if we can keep emotions under control. The key is to gradually build back positions. The levels marked with BTO (Buy to open) could be interesting. The idea is to trade the next wave to the upside, in case our ABC count is correct. The idea is invalidated if one more major wave to the downside unfolds and we can count a 12345 to the downside, instead of an ABC.
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