Published
5 years ago on
February 27, 2019
Bitcoin (BTC) has been consolidating sideways for the past few days along a strong trend line support but we have yet to see an anticipated move to the upside. The sharp decline that we saw last week was enough to scare off some overzealous bulls, which is why we have not seen a move to the upside so far. The Stochastic RSI is once again signaling a short term pullback on the 4H chart for BTC/USD which means the next move to the upside might succeed in testing the $4,000 level around the 61.8% fib retracement level. However, the retest might be a quick one and the price might not take long to stay there. That being said, BTC/USD charts on larger time frames indicate that last week’s decline has pushed the ultimate correction i.e. the fifth corrective Elliot wave by a few more weeks.
The decline that we were expecting to kick in would have already been there had it not been for the sharp decline last week. If BTC/USD had closed last week under overbought conditions, we would have seen a steady decline over the weeks ahead and Bitcoin (BTC) might have bottomed in March. However, now we might be looking at April or May for BTC/USD to find its true bottom. We expect the price to start rising after June/July because that is historically what has happened a year before the next halvening. We also have the next Litecoin (LTC) halvening in August which means it would be reasonable to expect the price to have bottomed before that. When BTC/USD rallied last week, we warned that the rally might be short lived and the price would soon be back where it took off from erasing most of its gains in a short time.
We have now seen that BTC/USD has erased most of its gains that it made during the previous rally but the price does not have the strength for a big move to the upside. We do believe that a move to the upside is inevitable and we will have to see one before the next corrective wave towards the true bottom. However, the lack of bullish momentum and fear in the market indicates that the market makers might have spooked the horse and thus they may not be able to push the price high enough before the next decline.
The daily chart for BTCUSDShorts shows that the bears are starting to push back as BTCUSDShorts has bounced successfully off its previous support. If the number of shorts keeps on rising as we expect, it might trigger the golden cross which would result in an utter demolition of the bullish resolve and the price might end up falling below $2,000. It is important to note that the current level of uncertainty and negativity that we see in the market is not enough for a trend reversal. A lot of people still expect BTC/USD to reach a price target of $200,000 or higher during the next cycle. As long as the majority has those aspirations, there will be no reversal.
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