Since the 26th of June when the price of Bitcoin reached $13743 at its highest point we have seen a complex correction developing. This was expected as the price ended its 5th wave of the Minor count which significantly recovery the price pushing it back above the most significant horizontal level at $6266.
A correction that developed has three structures – first a regular flat (3-3-5), second a zigzag (5-3-5) and is now developing its third one which appears likely to end in a five-wave manner potentially being a triple three (wxyxz).
If this is true then the currently seen ascending channel would be its second wave X which means that another low would look likely as the Z wave is to develop. Second wave X might have ended as I’ve counted ABC sub-waves but could get prolonged with another ascending move, ending as an ABCDE.
This is why on the hourly chart above you can see that I’ve outlined two possibilities but both end with a lower low. In the primary one, the ABC correction inside the ascending channel ended and we are currently seeing the development of the first sub-wave out of the ending wave Z. But in the prolonged, another upside move could occur before the price depreciation starts.
Zooming into the 15-min chart you can see that I’ve counted the sub-wave of the ascending structure to be a 5-3-5 which is why I’ve labeled it was and ABC to the upside. The move to the downside from the ascending channels resistance level has shown a five-wave pattern which is why I believe its the starting impulsive move out of the Z wave.
The price came down to the 1.272 Fibonacci level again and is currently retesting it for support which I think will be present for now. If the 5th wave of the Submicro count hasn’t ended we might see a quick dip below it just like we did previous two times but in either way we are going to see a bounce shorty according to this could which will be the 2nd wave, corrective in nature which isn’t to exceed the prior high and is most optimal to end around the half range of the five-wave move to the downside around $8293 where the ending point of the 1st wave is.
Zooming out on to the 4-hour chart, you can see the significance behind the outlined support zone and the $6266.5 horizontal support level. The corrective structure which is to be and WXY of the higher degree count can not exceed the 1.618 Fibonacci level which is perfectly aligned with the mentioned significant horizontal one brining it as the most optimal price target for the end of the correction.
After the correction ends, recovery would be expected to start but it is still soon to discuss its personality although it is safe to say that it would bring the price back to $10000. Recovery could result in a new yearly high but more on that when the new data appears.
The expected recovery might have started according to an alternative count as the current correction ended as a double three on the Y at the 1.272 Fib level in which case the ascending channel could be interpreted as a leading diagonal from the 1st impulsive move to the upside.
Leading diagonal has overlapping waves 1 and 4 which is what occurred here but is not a primary one because it can only develop in a 5-3-5-3-5 or a 3-3-3-3-3 manner.
Looking at the 15-min chart of the alternative count, you can see that this possibility is starting to get invalidated as the last decreasing wave has developed a lower low instead of forming a higher one and that after a three-wave increase instead of the five-wave one bringing the count to a 5-3-5-5-x which cannot be accounted as a leading diagonal.
If the price increased for another higher high from yesterday’s presumed 4th wave and ended on a higher low instead of going for a lower one, this possibility would still be equally possible as the outlined primary one. But considering what’s been said and the fact that we are seeing the price staring to breakout from the ascending channel’s upper level I don’t believe that’s likely.
In the short-term, I would be expecting a bounce from here to around $8294 where the ending point of the 1st wave out of the presumed five-wave move to the downside is. After this, a downfall to the support zone at $6914-6266.5 would look likely which would market the completion of the WXY correction of the Minor count from the yearly high meaning another move to the upside would start shortly.
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