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Bitcoin Technical Analysis Update 13th August 2023

  • The Bitcoin price's bigger picture remains unchanged with potential support at the level of $26,280. The price might be gearing up for a third wave rally towards $40,000 and more.

  • Bitcoin's current correction is noted for its unusual bottoming structure, unlike previous clear V-shaped recoveries observed in March and June.

  • To confirm that a low has been established, Bitcoin needs to form a one-two Elliott wave setup: five waves up followed by a three-wave correction that holds a higher low.

  • Despite the potential for lower prices, we remain open to the possibility that Bitcoin might have already established its low, but this can only be confirmed after the next high is formed in a leading diagonal.


Overview:

Bitcoin's price structure remains a topic of intense discussion within the cryptocurrency community. This analysis seeks to decode this trajectory using the principles of Elliott Wave theory.





Key Highlights:

  1. Support Levels: From a macro perspective, Bitcoin exhibits a support zone with last support at $26,280. This support is the pivot point to which Bitcoin can theoretically move and still maintain its breakout pattern, indicating a potential third wave rally targeting 40,000+.

  2. Current Trend: While the bigger picture suggests an imminent breakout pattern, the micro-structures reveal an unusual bottoming structure. Historically, Bitcoin has concluded its corrections with conspicuous V-shaped recoveries, evident in its patterns during March and June. The current wave, however, deviates from this norm, thus inviting increased scrutiny.

  3. White Wave Count Analysis (leading wave count): The ongoing technical pattern suggests the dominance of the White Wave count. In this scenario, another C wave is anticipated to the downside. If the price sustains above 29k, it augments the chances of the B wave ascending further, offering more space for the C wave to descend. Conversely, should the price break below 29k, the C wave may approach the deeper end of the support range, potentially breaching existing trend lines.

  4. Bottoming Structure & Confirmation (yellow wave count): To establish confidence in a new bullish phase, Bitcoin should demonstrate a specific sequence. It needs to form five waves up in a leading diagonal pattern, followed by a corrective three waves down, which holds a higher low. This pattern, known as the one-two Elliott wave setup, would solidify the commencement of waves 1 and 2, acting as a precursor to subsequent bullish waves.

  5. Conclusion: The present technical landscape suggests Bitcoin might still be poised for lower price levels short-term. However, if it sustains above 29k, it hints at the potential formation of a high B wave before a descent. While the possibility of having established a low exists, confirmation will only emerge post the formation of waves 4 and 5 in a leading diagonal pattern.

Investors and traders are advised to exercise caution and employ sound risk management practices, given the dynamic nature of cryptocurrency markets.

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