This week I will be looking at the technical situation for Bitcoin, and whether the correction is over or if indeed more downside is coming.
Certainly, our own indicators at Biyond remain strictly bearish and this has been preventing us from issuing any new buy signals.
Source: Biyond.co
Starting with Elliot Wave analysis, the case is simple and could be concluded next week if we see the lows of the month well-defended and a strong bounce back to the highs of the month.
Elliot Wave analysis in the more bearish scenario calls for a fourth wave correction to $52,000 and then a final fifth wave to $90,000.
Source: Tradingview.com
This is very much in line with own thinking, in that I believe whales or larger players often look for return close to 100 percent when calculating crypto returns or blocks of $10,000.
The above scenario would call for a near doubling of the Bitcoin price and it would be ideal for those ETF investors who were late to the party and want exposure now to the prevailing BTC cycle or trend.
Indeed, my other favored scenario is for the lows of the month to hold and BTC rallies towards $110,000.
Source: Tradingview.com
Again, a doubling of the price and match for the pre-election Calls on the option market and the bullish Elliot Wave scenario.
Some other forms of valid technical analysis to consider are the De-mark indicator and basic moving average trading.
The De-mark indicator on the daily time frames shows that unless we close the daily candle above $65,500 level then the risks of testing close to the $50,000 level are valid.
Source: Symobolic.com
The quarterly time frame for De-mark shows that we could be still a few weeks away from making a price bottom, although it still shows a very compelling case that we are still just in the middle of the bull cycle, and with plenty more upside left.
Moving average analysis makes a very clear case for more downside next week if we see more weakness below the 100-day MA, around the $61,500 area.
Source: Tradingview.com
Typically and inevitably, sustained softness under the 100-day moving average leads to an eventual test of the 200-day moving average.
The location of the 200-day moving average now sits just above the $51,000 level, which is very close to the expected drop zone for both Elliot Wave analysis and De-mark analysis if the lows of the month break next week.
Source: Newsbtc.com
In summary, Bitcoin could in theory be heading for a final test of the area $50,000 if a new low is made next week.
This could be a great opportunity to accumulate and lower levels and it could present a gift to late entrants of the ongoing bull cycle.
