A month ago, see here, I showed the Bullish Elliott Waves (EWP) option for Bitcoin (BTC) looking for a rally to inittally low- to mid-$40Ks assuming a -what is called in EWP terms- 1,2,1,2 setup. Instead, it appears most likely, BTC formed an irregular flat (red) wave-ii (see Figure 1 below), completed wave-iii and is now in red (intermediate) wave-iv. Thus, IMHO, BTC took a detour but is still on track for $90K+ as long as can hold above $35495 on the current pullback. Allow me to explain.
Figure 1. Bitcoin daily chart with detailed EWP count and technical indicators.
$30K is ultimate line in the sand
What I originally viewed as a wave-i, ii, 1, 2, setup morphed IMHO into a wave-i, ii, a, b setup and the recent low on July 20th at $29320 was (green) minor wave-c of (red) wave-ii. Since that low, BTC rallied for ten consecutive days: wave-iii, which also subdivided nicely into five smaller (green) minor waves. A feat not seen since correction started mid-April. Besides, as you can see in Figure 1, BTC also rallied back above all its moving averages (10d, 20d, 50d) except the 200d SMA.
Moreover, the crypto currency was also able to rally back above its (green-red colored) Ichimoku Cloud. Lastly, the daily RSI5 and Money Flow Indicator (MFI14) have not been this overbought since Mid-April either. The latter is rather important as it shows BTC is experiencing genuine buying. All in all, since July 20th BTC has accomplished many good things, not seen since the entirty of the correction that started mid-April.
Because one can always find a bullish or bearish data point to support one’s biased view, it is the weight of the evidence approach that allows for a much more objective interpretation. In this case it is rather obvious the weight of the evidence is predominantly bullish. All BTC now needs to do is reclaim its 200d SMA. I have outlined in Figure 1 the preferred illustrative-only path BTC now should follow based on the preferred EWP count shown, as well as the technical indicators, i.e., the RSI and MFI are often max overbought at 3rd waves because those are the strongest waves, just as BTC experienced recently.
Bottom line: If BTC can hold above $35495 going forward (the red wave-i high made on June 24) and rally towards its 200d SMA from around current levels, then the chart shows a very good setup for five waves higher since the June 22nd low. That would then greatly increase the odds for a pullback, wave-2, before a strong rally to ideally new all time highs; wave-3. Ultimately, the triple bottoms around $30K made over the past three months must hold to prevent a bigger slide to potentially $20K. Based on the weight of the evidence I now prefer to look higher and maintain the Bullish perspective I already had a month ago.
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