I am bullish bitcoin long term. In my opinion it has been following a textbook “Five Wave Up” fractal proposed by Harmonic Elliot Waves. And I believe that the top we saw in December 2017 was a major top of the wave 3 up. But after that corrective wave 4 down finally finds its bottom we should see another move up that would eventually make a new all time high.
In my last update dated 11 Nov 2018 I pointed to the final (a)-(b)-(c) structure that should make a new lower low and complete the larger wave ( v ) and the whole corrective wave 4 down. The price of Bitcoin at the moment of release of the report was 6,418.
Below you can see a textbook model of wave 5 down structured as a-b-c move. And this is exactly what we have got!
Now let’s see where we are now. On the chart below you can see that we indeed got an impulsive looking decline in that expected wave ( c ) of ( v ) last week. Price fell from 6,418 at the time of the previous report to 5,637 now.
Here we have that final (a)-(b)-(c) down structure of the wave ( v ) down. The minimum projection for the wave ( c ) is 76.4% of the wave ( a ) which in this case stands at 5,720. The low made on 15 Nov 2018 was 5,432.
So the minimum requirements for completion of that final (a)-(b)-(c) structure down has been met: first, wave ( v ) made a new lower low under the low made by wave ( iii ) down ( the previous low at 6,000 made on 6 Feb 2018 ) and subwave (c) of wave (v) dropped under 0.764 extension of the wave (a) of (v).
But quite often wave ( c ) down is much stronger than the first leg in subwave ( a ) and it stretches to 123.6% extension or even 176.4% extension of the wave (a) ( levels of 4,495 and 3,090 respectively ).
As long as bitcoin holds under critical resistance of 8,510 I can propose a bearish alternative where that move down off the top of that wave ( b ) up (topped at 7,788 on 15 Oct 2018 ) has not bottomed yet and only made wave i down of that final subwave ( c ) of ( v ).
In conclusion, a spiky drop driven by panic under 5,000 will be the best sign that we are bottoming and would be a great entry point for the first tranche. In contrast, if this is THE BOTTOM here we should see a very strong move up over 8,500 leaving behind many people like me who have been micro counting bitcoin for months in pursuit for the bottom. In that case we would wait for the first corrective move down after a strong rally and buy at much higher price but with a confirmation that THE BOTTOM is in.