XBTUSD: Elliot wave analysis
Updated
Bitcoin dumped, most of the alt analysis the day prior tanked. So I apologize if you were following the trades and got burned since the performance of Alts depend on the price of bitcoin. I should have warned you guys that a bitcoin move either up or down was imminent. There was also lots of support if you were viewing the chart on the 4 hour using an ichimoku indicator, but it tore right through all of that like a hot knife through butter. Anyway...
If you drew some trendlines on the 4 hour, ignoring the wicks, it would have given you a clear sign that a move either way was imminent. Now I personally don't like to predict the price, but to react to it. Nevertheless, lets try to predict where the price would have went based on the momentum using a multi-timeframe analysis:
On the daily chart, we had a bearish divergence occur from october 10th, to october 15th. Lasting 5 days.
On the 4 hour chart, we had a hidden bullish divergence occur from october 18th-october 22nd. Lasting 4 days.
They lasted for about the same amount of time, so lets assume they are equal in that regards.
However:
4hr hidden divergence had almost a flat slope, while the 1day divergence had a significantly steeper slope. That is +1 for the daily.
1 day divergence signaled price reversal which was already demonstrated by the wick getting rejected, so if the price keeps going sideways, it means that price reversal is still in effect.
4 day hidden divergence signaled price reversal, but the price didn't reverse, it only kept going sideways. This is why the daily won over the 4 hr. if the reversal didn't happen 1-8 candles later, it never was going to happen.
Daily won, price dumped.
now as for the move's direction it could have went up or down, but lets talk about what happened since it dumped. Where was the next support level?
It was exactly at the top of wave 1. I personally has buys waiting at that spot for 3 days and they all got filled.
Wave 4 cannot retrace below the top of wave 1 by more than a wick.
What other bull confirmation signs do we have? Well we certainly do have a strong hidden bullish divergence on the 4 hour. Triple bullish divergence on the 30 minute. So as long as that support holds, we should be fine.
Where would target be? well wave 5 might get rejected at the top of the giant triangle or might actually break through and even reach above wave 3. Trade with these in mind.
If you drew some trendlines on the 4 hour, ignoring the wicks, it would have given you a clear sign that a move either way was imminent. Now I personally don't like to predict the price, but to react to it. Nevertheless, lets try to predict where the price would have went based on the momentum using a multi-timeframe analysis:
On the daily chart, we had a bearish divergence occur from october 10th, to october 15th. Lasting 5 days.
On the 4 hour chart, we had a hidden bullish divergence occur from october 18th-october 22nd. Lasting 4 days.
They lasted for about the same amount of time, so lets assume they are equal in that regards.
However:
4hr hidden divergence had almost a flat slope, while the 1day divergence had a significantly steeper slope. That is +1 for the daily.
1 day divergence signaled price reversal which was already demonstrated by the wick getting rejected, so if the price keeps going sideways, it means that price reversal is still in effect.
4 day hidden divergence signaled price reversal, but the price didn't reverse, it only kept going sideways. This is why the daily won over the 4 hr. if the reversal didn't happen 1-8 candles later, it never was going to happen.
Daily won, price dumped.
now as for the move's direction it could have went up or down, but lets talk about what happened since it dumped. Where was the next support level?
It was exactly at the top of wave 1. I personally has buys waiting at that spot for 3 days and they all got filled.
Wave 4 cannot retrace below the top of wave 1 by more than a wick.
What other bull confirmation signs do we have? Well we certainly do have a strong hidden bullish divergence on the 4 hour. Triple bullish divergence on the 30 minute. So as long as that support holds, we should be fine.
Where would target be? well wave 5 might get rejected at the top of the giant triangle or might actually break through and even reach above wave 3. Trade with these in mind.
Note
in the process of breakout
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