BTC Elliot Wave Analysis: The Beginning Of Final Subwave Brings Opportunity
Seth Boulianne | Oct 17, 2017 09:01PM ET
Bitcoin seems to currently be in the midst of subwave 4 of the 5th wave in the larger degree uptrend. In my earlier post, I stated that Bitcoin is in the midst of subwave 3. I believe wave 3 is now over and buying opportunities are appearing as we near the end of subwave 4. Currently my long term wave count is as follows:
Daily BTC/USD Chart: Larger Degree Wave Count
With this analysis, wave 1 started on the March 26, 2017 low. We have a completed triangle within wave 4, leading us to believe we are now in the midst of wave 5; triangles always proceed a terminal wave. Based on wave 3 not being considered an extended wave, the prices and levels observed for a potential extended wave 5 are as follows: the waves 1-3 Fibonacci extension level 100.0 (6882.87) where wave 5 is equal to the length of waves 1 through 3. This is the level I am watching very closely as a break and close above this level could point to the higher fibonacci levels for an end to wave 5: FE138.2 (8406.29) and the FE 161.8 (9335.04). The end of wave 5 will most likely coincide with a divergence in the RSI. After the 5th wave is over I will be looking for a larger ABC wave 2 move in the supercycle wave degree (with a more in depth analysis on that to come).
Taking a closer look at the price action on the 4hour chart paints a clearer picture of the subwaves.
4H BTC/USD Chart: Five Subwaves of Wave 5
Subwave 4 is looking like a triangle pattern with ABC already completed; with there being a case we are still in the midst of C. As long as C does not extend below A, the triangle pattern remains valid (adjust bottom trendline accordingly). Since I am considering subwave 2 to be an extended flat, this type of alternation is most probable. A break and close above the top trendline of the triangle after waves D and E complete would indicate a buy signal; with a stop loss set at the lowest level of the triangle. A more conservative approach would be initiating a buy after a break and close of the 5828.39 resistance. If price breaks below the bottom of A (also the 23.6 fibonacci retracement of subwave 3), an alternative outcome could be that wave 4 is a flat pattern and I will be looking at the FE 161.8(5294.59), 38.2 retracement(5184.07), and 50.0 retracement(4985.12) as potential supports. Bullish bias remains so long as the price stays above 4357.86.
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