Bitcoin Elliot 5th Wave - Swing Long
Updated
Elliot wave rules:
Rule 1 - Wave 2 cannot retrace more than 100% of Wave 1
Rule 2 - Wave 3 can never be the shortest of the three impulse waves. It doesn't necessarily have to be the longest, but it cannot be the shortest.
Rule 3 - Wave 4 cannot overlap Wave 1
The Guideline of Alternation suggests that Wave 2 and Wave 4 will alternate, or be different in their complexity. If Wave 2 was a simple correction (a simple ABC structure), Wave 4 is likely to be a complex correction (such as a triangle, a flat, or a combination correction), and vice versa.
The Guideline of Equality proposes that in many cases, Wave 5 will be approximately equal in length to Wave 1. When it's not, Wave 5 tends to be either 61.8% of Wave 1 or 161.8% of Wave 1.
With all these said, we can confirm that wave 2 has a simple correction but wave 4 has a more complex correction.
And, since the wave 3 can not be the shortest, so wave 5 has to be smaller than that and end before 36000 and if it tends to go around 61.8% of wave 1, we can target 32000 as the end of wave 5
Also, if this wave 4 wants to go lower, it can not pass 25200.
This approach gives a good risk to reward ratio with these targets:
Entry: 27200 - Stop Loss: 25200 - Take Profit: 32000
Rule 1 - Wave 2 cannot retrace more than 100% of Wave 1
Rule 2 - Wave 3 can never be the shortest of the three impulse waves. It doesn't necessarily have to be the longest, but it cannot be the shortest.
Rule 3 - Wave 4 cannot overlap Wave 1
The Guideline of Alternation suggests that Wave 2 and Wave 4 will alternate, or be different in their complexity. If Wave 2 was a simple correction (a simple ABC structure), Wave 4 is likely to be a complex correction (such as a triangle, a flat, or a combination correction), and vice versa.
The Guideline of Equality proposes that in many cases, Wave 5 will be approximately equal in length to Wave 1. When it's not, Wave 5 tends to be either 61.8% of Wave 1 or 161.8% of Wave 1.
With all these said, we can confirm that wave 2 has a simple correction but wave 4 has a more complex correction.
And, since the wave 3 can not be the shortest, so wave 5 has to be smaller than that and end before 36000 and if it tends to go around 61.8% of wave 1, we can target 32000 as the end of wave 5
Also, if this wave 4 wants to go lower, it can not pass 25200.
This approach gives a good risk to reward ratio with these targets:
Entry: 27200 - Stop Loss: 25200 - Take Profit: 32000
Trade active
Entry point reached.
Bearish trendline broke and retested.
Note
₿ has shown some strength relative to Gold, Bonds and $ in the past few hours:Note
Fun fact: the 25300 support is not only the end of wave 1 but also fibo's 0.5 level and ichi cloud's bottom. Strong support expected.Note
Good higher low simple reversal and the position is back in profit:Note
Good news is Bitcoin has been stronger relative to dollar, gold and bonds in the last 3 days. Bad news is DXY and EURUSD just passed the ichimoku cloud.Note
4 Hours till the daily candle closes and they are back to the cloud.Currently a good support around 26800 on Binance's orderbook
Note
Just one more thing to consider about the 5th wave:A truncated fifth wave, also known as a "failure", is a term used in Elliott Wave Theory to describe a situation where the fifth wave does not move beyond the end of the third wave. It is a fairly common occurrence and typically indicates a weakening trend.
More specifically, in a truncated fifth wave, the fifth wave falls short of the end of the third wave. In a bullish market, the fifth wave fails to reach or exceed the high of the third wave, while in a bearish market, the fifth wave fails to fall below the low of the third wave.
It's important to note that a truncated fifth wave typically occurs in the wave following an extended third wave, indicating exhaustion of the trend. The truncation is a sign of underlying weakness in the market trend, suggesting that a reversal is imminent.
The rules of truncation include:
A truncation can only occur in wave 5.
The truncation does not move beyond the end of wave 3.
A truncation often ends in the price territory of wave 4. This means it overlaps with the price level of wave 4, which is a violation of the guideline that wave 4 should not overlap with the price territory of wave 1, but it is allowed in the case of a truncation.
In a truncated fifth wave, wave 5 is usually either a simple ABC correction or a short impulse wave.
Interpreting truncated fifth waves can provide valuable insights into market dynamics and can help traders identify potential trend reversals. However, like all aspects of Elliott Wave Theory, it requires careful analysis and should be used in conjunction with other forms of analysis and risk management strategies.
Order cancelled
This maybe a more accurate Elliot wave counting. Although it can bounce from here as the end of corrective wave A but it seems like we are going to sit a while and find more support lower till find the path forward.
The whole 15-31K rally can be considered as a bigger Wave 1 and after we see the ABC correction, we will be starting a new Wave 3 (which tends to be the greatest wave) maybe the best entry of the year for bitcoin.
nfa & dyor
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