I want to show you s bullish long term scenario where Bitcoin may rally to a new all time high.
We can count the top made by Bitcoin at nearly 20,000 in late 2017 as wave ( 3 ) up.
Then a corrective looking decline that bottom at 3,135 in December 2018 was a corrective wave ( 4 ) down.
The rally that topped at 13,868 in June 2019 looks like a textbook subwave ( A ) of wave ( 5 ) up.
off that top Bitcoin declined in a corrective looking A-B-C down structure that managed to hold over the critical support at 3,135.
If that critical support gets violated that bullish scenario will get invalidated.
Under the Five Wave up fractal proposed by the Harmonic Elliott wave theory subwave ( B ) of the final wave ( 5 ) normally has A-B-C subdivision.
And the final subwave C in any A-B-C structure should be composed of five micro waves.
Let’s scroll down to check a micro structure of that subwave C of wave ( B ) down on 120 min chart of Bitcoin.
You can see that the micro structure of that decline does not look having completed.
As long as Bitcoin holds under resistance at 8,158 it can drop again and make one more lower low.
However, from the Monthly chart shown above you should remember that this drop can NOT violate the critical long-term support at 3,135.
There is a chance that Bitcoin has bottomed in wave ( B ) down already. To confirm that bulls has to get over resistance at 8,158.
After violation of that resistance price most likely will not immediately fly away but rather drop back under that level and re-test Demand Zone located at 6,900 – 6,000. That could be an attractive long setup.
If Bitcoin manages to make a new lower low under the low made at 3,858 on March 12th that could be en even better long setup with a stop under 3,135.
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