Bitcoin price goes into no man’s land; not sure which direction will take now! It is standing at the level that marks a 50% upward correction of the previous downward move (47k’ish to 39k’ish). What is the next move? This article logically uncovers the upcoming move in Bitcoin price through technical analysis. It involves Elliot wave analysis to discover the upcoming move and volume analysis to justify the upcoming move.
Contents
Analysis of Recent Rally:
After Bitcoin’s recent downslide to 38k, an upward rally started which dragged the price up to 43.3k. Applying Fibonacci retracement to the previous downside move reveals that the current price rally is the 50% correction of the previous downside move.
Now BTC price is moving downside. To decode the future move, let us do Elliotwave analysis.
Deciding Trend Direction through Elliot Wave Analysis of Current Rally:
Elliot wave analysis reveals that the current price rally happened in the form of 5 waves. All the 5 waves of this price rally are completed. Now the price is taking a downward correction of this rally. Applying Fibonacci retracement to this price rally reveals that the price has completed a 38.6% downward correction in the form of 3 waves ABC.
This movement of price in the form of 5 waves up and 3 corrective waves down provides a strong clue that Bitcoin trend is bullish. But we need further evidence to decide its direction.
Justification of Bitcoin Trend through Volume Analysis:
Volume analysis is a good tool to justify the price trend. In the current price rally, the trading volume is greater than the previous rally when the price was approaching 47k’ish. Further, the current downward move is happening at a relatively lower trading volume than the previous downslide.
This indicates that volume is favoring the bullish trend and discouraging bearish moves.
The Bottom Line:
To conclude the above technical analysis, Bitcoin is on a bullish trend as per Elliot wave analysis. The trading volume is favoring an up move rather than a downside move. Moreover, the Moving Average (50) supports the price nicely. So BTC will continue its uptrend after the current downside move.
