Bitcoin price fell to $15,653 on November 9th, its lowest level since November 2020. But the price is consolidating. It forms a symmetrical triangle, indicating indecision, where the same amount of pressure is applied from both sides.
A drop below the level recorded on June 18th may indicate that new lows are on the horizon. However, this may not only happen in a straight line.
As can be seen from the hourly chart above, from November 5th, there was an impulsive move to the downside that clearly ended. What followed was a rebound to a significant previous support level, now tested for resistance in the $18,000 region. The price is now hovering around the middle point of the triangle and is approaching its top.
With a breakout coming soon, the key question is, where is it headed?
Bitcoin price: bullish count
If the upward movement from November 9th to 10th is a 5-wave wave, it may indicate a bullish anticipation. According to this count, we have seen the first two Minuette count waves and the first two Minuette count sub-waves of the third wave, which is expected to move to the upper resistance level of the previous support area, near $19,694.
This target is also validated by the Fibonacci extension level, as the third wave of the five wave move usually comes to the 1.618 Fibonacci extension level. These two levels completely overlap, indicating significance.
If correct, the next uptrend break is likely to come with more upside, leaving the November 9 low behind. There could be potential for more upside after that for 4th and 5th wave development, but this whole move from November 9th could also be a 3-wave ABC correction.
Even if it is corrective, the target still stands for a possible third wave, whether it is wave C or wave three of a five-wave impulsive move.
Bitcoin price: countdown
Alternatively, the upward movement from November 9th through the 10th can be described as a three-wave ABC move. This is the main differentiating factor between the two numbers, the second being the next high on the fourteenth.
If this is the case, then the symmetrical triangle is an ABCDE correction that has now ended with another interaction with the resistance of the triangle. This will push the price to the downside immediately.
Then the next support area on the downside is likely to be a price target, which starts around $13,400 and ends at $12,500.
Given the fact that we see a symmetrical triangle, it would be correct to say that both possibilities have the same probability. However, one can probably interpret it as more likely to take into account the number of waves.
Most notably in the countdown, the symmetrical triangle indicates that the ABCDE correction is the fourth wave of the previous impulse to the downside, as the ABCDE correction can only be found in the fourth wave.
Given the rules of Elliott Wave theory, we can only interpret this supposed fourth wave within the impulse that started on September 13th. This is highly unlikely, but not impossible. Not likely, because as can be seen in the 4-hour chart above, the second and fourth waves are not of the same degree. Especially considering the length and the fact that the fourth wave, if it is a sideways correction like ABCDE, should last longer than the second wave.
Inferring the countdown probability by default makes the upward count more likely.
The safest way to approach more movement is to wait and see the direction of the breakout from the symmetrical triangle. Either way, a breakout is expected soon with no more hesitation on the horizon regarding Bitcoin.
This is why a strong candle closing above the support/resistance lines will provide the clearest indication of where the price will head in the next period.
If we see a break to the upside, the price target would be somewhere around $19,700. These levels will set the price for further potential upsides.
But if the price makes a bearish breakout, a drop to $13,400-12,600 would be a potential area where it could find support next.
In a negative scenario, it could mean that we are heading further towards a complete capitulation, close to what we saw in November and December 2018 when Bitcoin fell from $6,000 to $3,200. In terms of today’s prices, this could send bitcoin down to as low as $10,200.
The scary truth is that during this entire period of June 2022, bitcoin price has been training below the 200w moving average, which has historically provided guidance for a potential bottom area, which includes all of the dips from 2014.
Now the price has advanced steadily below it. This is unlike the time he made wicks under him but eventually respected him. This indicates that the bear market capitulation may be worse than in the past.