Bitcoin Struggling...Bears are fighting hard to overcome the bulls.
Bitcoin continues its correction after a slight rally yesterday. What started off as an impulse wave up, ended up failing.
This is a slightly complex correction. For those less familiar with technical analysis, I'm going to quickly explain what's happening. If you are more experienced and familiar, please indulge me for the good of those trying to learn.
When an impulse wave fails following an ABC correction, it's labeled as wave "X". According to elliot wave theory, this means we can expect another ABC correction to follow. When two ABC corrections are only separated by 1 wave (wave X), we call that a "WXY" correction.
Here's an illustration:
As you can see, a WXY pattern connects two ABC corrective patterns. Based on this information, we can surmise that we're currently in another ABC correction. Once this correction is complete, it'll complete the "Y" portion and we can expect another attempt at an impulse wave up.
Looking at the 1 hour RSI, we can see an ascending support line has formed.
The 4 hour RSI also reveals an ascending support line. This one is more important and needs to hold. If it breaks, it could signal an overall trend change to a more bearish market.
Looking at EMA's on the 4 hour chart, we can see the 8 day remains on top of the 21 and 55 day EMA. The price is dipping below the 21 day, however still remains above the 55 day EMA. If the price drops below the 55 day EMA, or if the 8 day EMA drops below the 21 day EMA, it may signal a tend reversal. As of now, I still consider this an overall bull market.
If you're not familiar with how EMA's work, reference my post on the topic here: https://steemit.com/cryptocurrency/@workin2005/simple-effective-strategy-to-buying-and-selling-market-trends
If the next impulse wave up is to succeed, we desperately need volume to increase. If it doesn't we may be in for another failed impulse wave. This would be called a WXYXZ pattern. I'll discuss that more if/when it becomes a reality.
BIAS:
Short Term: Neutral
Longterm: Very Bullish
I hope this has been helpful. I’d be happy to answer any questions in the comment section below. Thanks for stopping by. I wish you great success!
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Disclaimer: I am NOT a financial advisor and this is NOT financial advice. Please always do your own research and invest responsibly.
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The drop in price over the last couple of days must have been caused by the uncertainty of Monday’s SEC ruling regarding Ethereum and XRP as securities or not. I think they’ll rule in favour of Eth and Xrp and then confidence will return to the market.
That’s possible. I just hope the SEC gets this sorted out quickly. They’re making this much more complicated than it needs to be.
Agreed, but I think they're most likely to rule that Ethereum and XRP aren't securities, because Goldman Sachs, Barclays and a whole host of other banks want to open their own cryptocurrency trading platforms and the SEC isn't going to spoil it for them, especially when we consider how profitable it would be to them: Binance is reportedly making more money than Deutsche Bank. Also, the US will not want to put themselves behind in the race to attract Fintech business and its innovations.
I agree. I think there’s a 75-85% chance they will NOT be classified as securities. Still, the fact that there’s any possibility is a bit nerve racking.