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Cryptocurrencies were bearish in the last month, but as you can see in our 4-hour chart, we still think it's a correction within uptrend. Many analysts already turned bearish, but we stayed with our bullish view, because we have already seen such deep correction in March. Market always forms a bottom when everyone is bearish.
Bitcoin was bullish and much more impulsive in April, where we can clearly count five waves up, which in EW theory indicates a trend, but in May we can see 7 swings A-B-C-X-A-B-C, which means correction, so we expect that sooner or later Crypto market will turn to the upside as long as it's trading above 6400 invalidation level. Just keep in mind that we need five waves up followed by a break above 8600 level to confirm a bullish reversal.
If you take a look at at previous months, you can see that February was bullish, March was bearish, April was bullish and May was bearish. Now guess what, June is near and we would not be surprised if these cycles will continue.
Let's take a look on hourly chart. Well, you can see that BTC stopped exactly at 7000 psychological level with the most common patterns. Wave 4 was a triangle and wave 5 was ending diagonal and we know that triangles usually signalize that trend is coming to an end, even if it's wave 4 or wave B or wave X, in any case when we see a break out of a triangle, reversals may occur soon. Ending diagonals are the most common in wave 5 and wave C, which means that sooner or later market will turn and as we can see, BTC already sharply bounced with five sub-waves after completion of an ending diagonal, so seems like correction can be completed, especially if we see a break above channel resistance line.
Disclosure: Please be informed that information we provide is NOT a trading recommendation or investment advice. All of our work is for educational purposes only.
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