Elliot Formation Inside An Ascending Wedge
Updated
The BTC price has increased significantly since reaching a low on March 13. The increase has taken the form of an ascending wedge, which is considered a bearish reversal pattern.
It is possible that the price continues to trade inside this wedge until it reaches the next resistance level at $7750. If so, we can outline a five wave Elliott formation that would take the price all the way to this resistance line. The price is currently at the top of the third wave, after which a decrease towards the support line is expected. Afterwards, the price is likely to create the final upward move before breaking down. This possibility is supported by the slight bearish divergence that has been developing in the RSI, which is even more visible in short-term time-frames.
If the price breaks down, the closest support areas are found at $6700 and $5800.
It is possible that the price continues to trade inside this wedge until it reaches the next resistance level at $7750. If so, we can outline a five wave Elliott formation that would take the price all the way to this resistance line. The price is currently at the top of the third wave, after which a decrease towards the support line is expected. Afterwards, the price is likely to create the final upward move before breaking down. This possibility is supported by the slight bearish divergence that has been developing in the RSI, which is even more visible in short-term time-frames.
If the price breaks down, the closest support areas are found at $6700 and $5800.
Note
In the short-term, the price is following an ascending support line and has been doing so since March 30, having validated it thrice until now.
The price has created a triple top pattern, which is combined with strong bearish divergence in the RSI. This suggests a downward move is likely, at least towards the ascending support line. This would complete the fourth wave of the five wave Elliott formation outlined previously.
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