From yesterday when the price of Bitcoin Dark was around $20 til the highest candle close at $100.85 the price increased by 401.15%. As you can see the price spiked even higher to above $110 but has retraced quickly leaving 3 big wicks that indicate heavy selling activity.
In today’s analysis, we are going to examine the price action formation that lead up to this increase and determine what is likely going to happen next for this cryptocurrency that was abandoned by its dev team.
Looking at the BTCD/USD daily chart we can see that the price spiked all the way to the 0.786 Fibonacci retracement level measured from the last lower high to the last lower low of this third intermediate correction that I have labeled as a WXY for now.
As you can see IRS is at 88.2% meaning that the price is heavily in the overbought zone and judging by the longevity of the daily candle wick of two Fibonacci levels or 32% this upward trajectory has come to an end.
This could also be validated by looking at the BTCD/BTC daily chart.
As you can see the price is currently below the 0.382 Fibonacci level after it spiked up to the descending triangle’s resistance line where the price has quickly rejected. This last spike I have labeled as the Y wave of the second intermediate WXY correction and as the Y wave ended on the triangle’s resistance line more downside was expected.
The question is whether this quick retracement can serve as a good trade opportunity which is why we are going to further examine the price action on the lower time frames.
Zooming into BTCD/USD 30 min chart we can see that an impulsive move to the upside is finished followed by an ABC correction. If we follow the rules of Elliott Wave Principle after a correction a trend continuation will most likely occur which is why from these levels around $75 the more upside is to be expected for the price of Bitcoin Dark.
However, having in mind the corrective context seen on the daily charts both against the dollar and Bitcoin I think that another up move isn’t going to be an impulsive one but that we are going to see more corrective structures that this last ABC is going to be a part of.
I am expecting something like projected on the graph below because the price grew exponentially really quick and that is unsustainable so an equally quick fall would be the logical next step. That fall, however, won’t be in a straight line but rather a range with high volatility caused by uncertainty.
Zooming out to the BTCD/USD 4-hour chart we can see that the projected target of around $42 is at the prior range horizontal support but after that, I would be looking at more downside for the price of Bitcoin Dark as wave Y of the last intermediate WXY should develop.
RSI on the 4-hour chart is still in the overbought so a retracement back to its mean would be somewhere around $60.
Zooming in to the hourly chart I have labeled my projection in order to show you what I mean. I am not expecting for the price to go down in a straight line but rather form a complex correction bouncing from inside some kind off a wedge before finally reaching my $42 target.
This could serve a good trade opportunity buying at the end of the minor correction and selling at the end of another but eventually, the price would breakout from this range to the downside as the final intermediate wave Y should start to develop as this wave X was only a recovery one which is validated by the Fibonacci level as well as the the BTCD/BTC chart price action positioning.