The main thing to take away from this new primary wave is that it has completely reset the derivatives market:
shorts that could comfortably hold on to their positions acquired during the excessive downthrust in May had to cover, got stopped and liquidated en masse as at one moment the price even spiked up to 48k on binance.
Lets try to understand where the price is moving next.
When applying a fib retracement to the may downthrust from 59.5k to 30k (labels on the left), one can observe that the uptrend has lost momentum between the 0.382 and 0.618 fib levels.
I now want to know at what price level the current consolidation from 42k will probably revert.
To answer this, let’s take a look at the fib retracements of the current upthrust:
- 0.382 (37475)
- 0.618 (34357)
- 0.786 (32138)
Fundamentally, i do believe that the market is currently in a wyckoff accumulation phace D, shortly after the SOS (sign of strength) point.
This means that the following pattern is to be expected: rising triangle with a rather weak maximum retracement and a breakout north for the rocket in phase E.
So in lieu of this, i am leaning towards a . I am not thinking that the market has just completed the A wave of an A-B-C correction (to the may crash),
- the current upthrust has formed a new higher high.
- shorts are no longer organised (as can also be seen from the massive decline on symbol bitfinex:BTCUSDSHORTS, and by the reversal of the long/short ration on binance in favor of longs)
But let’s consolidate this first impression with some more analysis, specifically trend lines:
The bears are currently pushing the price down at a somewhat steep-angled trendline (1). This trend probably won’t hold up for long and when it brakes, a nice upward thrust is to be expected. But more importantly, I am looking to find an upsloping trendline for the rising that i am expecting to ensue (which has its top at 42521).
I can find one (2) which the market has recently started to print. When extrapolating this down to the likely 0.386 fib retracement level where the reversal will likely occur,
i am getting (3) which i am expecting to be the main resistance for the coming days, leading into phase E.
Coincidentally, together with a long standing from back in february (4), all 3 converge at a single point on the 0.386 retracement level,
which i expect to be the point of reversal (or if not, at least to be a major bounce level).
Long talk short give away: reversal to the moon will come at 37500 in my view.