As reported by livebitcoinnews yesterday, $1B worth of bitcoin is on the move.
It is still in the realm of speculation who is the owner and what are funds for, but one thing is certain, that amount of Bitcoin is on the move with a purpose. So the owner is in my mind a whale who wants to use the opportunity to sell it which can be concluded by the covertness of the transaction. Furthermore, only selling in small amounts makes sense for someone willing to sell that amount of Bitcoin because he would want to keep the price as stable as possible and don’t crash the market on him.
As you can see from the chart below the price is on its key resistance levels from the descending channel in which it is correcting from mid-January. There’s also a minor range resistance labeled a blue dotted line and the RSI is getting near overbought conditions as its hovering around 70%.
Having in mind what was previously stated in today’s analysis we are going to look at the price of Bitcoin and the potential selloff that could start soon and evaluate some of the significant levels for the upcoming period.
If you have been following my analysis you can remember that I have projected this scenario last time in which after a WXY correction another with two extended waves in the opposite direction occurred and this is my primary count from early June.
As you can see because the wave Z ended on the resistance line more downside was expected and that is exactly what happened. Now I have projected that a three wave Zigzag will develop and currently we are going to see if my count gets validated as the wave B should end and another move to the downside is about to happen according to this scenario whos target I see on the next horizontal support around $5000-$4700.
Zooming into the 4-hour chart we can see that the price action is starting to flatten out on the 0.618 Fibonacci retracement level where usually B wave ends in between 0.5 and 0.786 depending on the type of a correction. If this one ends here it’s going to be a Zigzag which means that the target of the C wave must go lower beyond wave A.
If the price increases more and then gets rejected its going to be a flat correction with wave C being in the vicinity of the wave A.
Zooming into the hourly chart we can further inspect the cluster around the 0.618 Fibo level.
As you can see the price is showing the first signs of struggle indicated by the wick from above which means that selling pressure isn’t allowing the price to go up further at the moment and consequently the momentum is slowing down.
Zooming in further to the 15 min time frame we can see that the price action is forming an ascending triangle and judging by the steepness of the support line, buyers are more aggressive at this point. You can even say that a breakout from a symmetrical triangle already happened, but until the price gets above $7410-7420 I woun’t consider that there is more upside potential for the price of Bitcoin.
If we see the price of Bitcoin break this level than things will get tricky to call out. In that case, this ABC correction could still be in play but it could end as an Irregular or Expanded Flat where B wave exceeds the start of an A wave slightly so we wouldn’t know it for sure until the price reaches $8555 level.
That would look something like this:
As you can see B wave goes above the starting point of wave A and ends slightly above it. C wave also goes lower than the ending point of wave A, which means that still another lower low will occur.
The problem will calling this one out would be in another alternative count that is bullish in the short term but results in lowest target possible around $3000.
In this short-term bullish scenario this current correction structure is more complex as its revolves around sub corrections more than my primary count. As you can see after the first WXY correction from the all-time high to the 6300$ low a correction in the opposite direction is developing but with sub correction taking place is has been a prolonged one.
In this scenario, the current upward trajectory is 5 wave Y impulse whose target I have projected to be to the $11700 at max which is the level wave W of that correction ends so a retest would be in order or a retest of another prior high. But as the wave Y ends another WXY correction to the downside should develop as this would have to be followed by another in trend correction forming a double or a triple three correction. The target for this scenario would be at around $3000 level as that would be the strongest horizontal level that could hold the momentum behind the selloff.
This is my alternative count and not my primary for two reasons. First, because the current upward wave doesn’t look impulsive at all, but rather looks corrective and choppy. Second is because I don’t see any fundamental reason for the price of Bitcoin to go up to $11700 especially as we are in this bear market for so long that even if there were to be some great fundamental technology improvement the sentiment would choke it up as a catalyst.
If you can also remember this graph from the global chart that I have posted in some of my prior analysis I have been saying that the market is probably going to retest the $250B level from which it broke to the downside before more downside.
As the evaluation of the market cap approaches those levels and having in mind what was stated above I believe that we are now going to see the start of another selloff that will result in a lower low to around $5000 for the price of Bitcoin.