Bitcoin In Double Zigzag Correction - Bullish Bias by DanV on TradingView.com
29 May 2016
Earlier this year I outlined 4 possible scenarios of which the 1 & 2 were theoretically possible but did not really feel high likelihood of developing. I then explained this in later February in live webinar. This leaves us with 3 & 4 which in general are similar except where the upside correction ends and if there was just a single zigzag at the time or as it now appears a double zigzag in prospect.
In subsequent published chart, I outlined a possibility that as long as we held above the minor rising trendline and 380 it has a chance of moving up to 480 – 500 area.
So now that we held the 380 and minor up trendline referred to above breaking above 500 I think the price action is little more clearer which I present here as follows:
Technical Summary
1. Taking a look at the price chart with 3 day period, note the double zigzag decline from Nov 2013 to Jan 2015 low appears to have completed larger zigzag. From where we are progressing in possible double zigzag retracement move to the upside shown in up trend channel.
2. On Second chart also of 3 day period, we can see interesting price interacting with the Schiff Pitchfork lower parallel and 50% line of the median and lower parallel shown with wave count in which we are progressing in second minor zigzag of wave ((y)) which commenced from low of 16th January and in final swing wave “c”.
3. If the above is true then we could have full 5 wave move with the wave 1 close to completing in the area of 550 being approx 38.2% retracement of the entire decline from Nov 2013 to Jan 2015.
4. On this 3 day time frame chart we also note possible divergence could develop in the MACD and even RSI .
5. On the daily time frame chart above, you can see that we have minimum requirement in that wave c is close to completing minor 5 wave and could top out in the 550 zone noted above. However, provided we hold above $490 - $500 level, I think it is more likely, that we will get full larger 5 waves which could lead the price to peak around $670 and even spike into 700 -720 area.
6. This double zigzag completion would open the prospect of another large bearish reversal that could result in decline to 200 -220 area though more likley to go and retest the Jan 2015 low or make new lower low.
Other features and details are explained in the following video.
Conclusion
Provided we hold above $490 - $500 zone on pull, look for larger 5 move up to nest Fib level (61.8% retracement) at around $670 with possibility that spike high could form into $700 - $720 area.
Therefore in the intermediate term a bullish bias appropriate.
Warning: This is my interpretation of price action using TA approach that I consider helps me the most but could be completely wrong. Therefore as always, do your own analysis for your trade requirement and ignore my views.
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Thank you for taking the time to read my analysis.
DanV