Last time we considered Elliott wave analysis on the daily and 4h timeframes and defined $29k as a mid term target. Today I wanna show you my overall view on the market, when the bear market end and new bull market start. Let’s go.
Bitcoin – which global wave?
Let’s take a look at the BTCUSDT chart on the KuCoin exchange. Here we can see that waves 1, 2 and 3 has already formed by the price. Now the wave 4 is about to happen. This wave has the critical value which can not be broken – $32660 – wave 1 low. I want to remind you that according to the main axiom of Elliott waves wave 4 cannot overlap the wave 1, except the cases with terminal diagonal triangle, but now it is not the case anymore. The wave 4 can end from 0.38 to 0.61 Fibonacci levels, but only 0.38 is below the critical level. Thus, my mid-term trade has the target at the $29500. Here also could be the balance (teeth) line of the Williams alligator, which is the conservative target for wave 4. I am 99% sure that the current wave is wave 3 because the minimum AO value. The 5-Elliott wave trend could be ended only with the divergence with the awesome oscillator. After the wave 4 completion I expect the wave 5 which will definitely break the current low at $17600.
Dollar currency index confirms my theory!
Let’s take a look at the DXY chart below. It fully confirms my scenario. Do you know what is the best indicator for crypto bear and bull cycles? Of course – DXY! It usually falls when the risky assets are growing. Here we can see the clearest Elliott 5-waves cycle. Wave 1, 2 and 3 have been already formed too, like on Bitcoin, but to the upside. Perfect! Now the DXY shows us the weakening of the uptrend, trust me on the 1D timeframe we can also find the structure of the subwaves which tells us that the wave 3 is finished. Now I anticipate the correction to the target zone. I think it will be to the 0.38 Fibonacci, like for the Bitcoin, but it does not matter. The only thing is important, we will see the correction and as a result the growth in crypto. The wave 5 here will be the last in the BTC bear market. We can use DXY to confirm the waves on the Bitcoin in such a way.