Sentiment Speaks: Another Bottoming Attempt For Bitcoin by Avi Gilburt

in hive-167922 •  7 months ago 

Summary

  • Bitcoin has been in a long correction off its all-time highs.
  • The last bottoming attempt failed.
  • We are seeing another bottoming attempt developing now.
  • Looking for a helping hand in the market? Members of The Market Pinball Wizard get exclusive ideas and guidance to navigate any climate. Get started today »

I want to begin this article by letting you know that I wrote this article with Ryan Wilday, who runs our crypto-currency service and is our resident crypto expert.

Bitcoin saw a very strong move off the $7300 low struck on October 23. News watchers attributed this move to very bullish comments regarding cryptocurrency from China’s President Xi. Whether due to that news or not, from our perspective the correction had gone deep enough to attempt solidifying a bottom.

The move higher on that day was 30%, and appeared to be constructed of five waves. That wave structured suggested a strong chance that our wave two that started at $13,900 in May had come to an end. Yet, the market should have held over $7850 in the ensuing pullback. That was the 76.4% retrace of the initial move off the low.

Unfortunately, that level did not hold, not only breaking the key retrace level on November 21st, but following through below the October 23rd bottom. This confirmed that our wave two had not yet completed. This is the first time that one of our key support levels did not hold since our suggestion that Bitcoin had put in a major bottom at $3000.

While this does not upend the rally that started in December 2018, it does increase the length of this correction.

Ryan stated on that day that he was flattening his positions in GBTC and BTC. Bitcoin prices continued to fall to below $6500 before finding some footing. But until Bitcoin can rally over $8050 without breaching that low, we should expect further downside.

Until $4300 is breached we still expect the rally of $3000 in December of last year to culminate in six figure Bitcoin prices. However, the market has signaled to us that this correction can go on for some time.

While we still must be open to see this market go lower, we are writing today as we see another setup for a potential bottom. Our structure off the $6410 low with a top at $7700 can be considered five waves. Furthermore, this occurred very close to the 50% retrace of the 2019 rally, a key retrace for a wave two.

Now we need to see $6665 hold to continue for us to believe this setup. Further, we need to see the market fill in the next degree five wave structure, ideally to $9840. While the rally to $7700 can be considered five waves, it took out no key resistance. Five waves to $9840 would mark a breach of key resistance.

If the latter is achieved we will move from suggesting we have a potential setup for a bottom to suggest that bottom is highly probable. This conundrum is familiar to us in the crypto world. The question we face is if you call out a potential, albeit nascent, setup or do you wait for the market to run nearly 75% before alerting our readers? Today we have elected the former.

Note that current projections off the $6400 bottom points Bitcoin toward a $127,000 target in the final move off the December 2018 before the next large bear market begins.

Ryan also covers Ethereum, and for the first time sees Ethereum starting to run ahead of Bitcoin in the current setup off its recent bottom of $116. Ethereum and a few other large caps are also acting strong which bodes well for a bottom. But note this is true only so long as support holds, and the next degree five wave structures fills in.

...Read the Full Post On Seeking Alpha

Author Bio:

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Steem Account: @avigilburt
Seeking Alpha Account: Avi Gilburt

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