The Bitcoin market is in a corrective period following the recent bullish wave with the Elliott Wave double three pattern forecast. The last two waves down were both impulse waves on the 1-hour chart and could be labeled as subdivision waves on the 4-hour chart. We have used Fibonacci retracement levels to measure these moves, and they level out at 61% and 76% levels of a recent move up in price. These are important support levels for Bitcoin (BTC). If these retracement levels hold, then it’s likely we’ll see another corrective wave towards higher prices before any more down moves occur.
The Elliott Wave Double Three Pattern for Bitcoin (BTCUSD)
The Elliott Wave double three pattern is a very common type of subdivision pattern on all time frames and usually ends with a breakout or a breakdown in price. This isn’t to say that the leadership for this market is decided yet, but typically when you see this type of pattern it’s a sign that continued leadership will come from one direction more than another. The general rule of thumb when you see these pattern is that volatility is expected to decrease from here, but there will be no significant trend change in either direction.
In this analysis, we are using all time frames for this, so our chart will be a 1-hour, 4-hour and daily chart for Bitcoin. We’re trying to find the most bullish pattern we can see over the next several weeks or months before significant trend changes take place in either direction. We’ll also make mention of objective support and resistance levels as well.
Current price action:
The recent bullish wave has taken Bitcoin down to a corrective level, but we’re still trading above both Fibonacci levels. This pattern is a double three where the 0.618 extension of the first wave ends just before the completion of the second wave. The main support level from this move down is at $3,550 and that appears to be holding, even in an “oversold” condition. We were seeing some very small pullbacks during this move down, so that level may drop even lower before more corrective waves take us back up.
The Elliott Wave Double Three Pattern For Bitcoin (BTCUSD)
There is a small consolidation pattern forming on the 1-hour chart that we are looking for to see where it breaks out. In general, we want to see the market consolidate in a tight range for about three weeks before seeing any big moves either way. We’re watching for signs of support as well as resistance levels so we can get an idea of whether or not there will be an overall trend change in either direction or if the market will continue with consolidation and just fluctuate within that narrow range.
Can you see any signs of a higher breakout to the upside?
The 1-hour chart appears to be acting more counter-trend after the recent bounce that saw Bitcoin drop back down to Fibonacci 0.618 and then retrace all the way back up again. This can be seen in the 4-hour chart as well where price action has retraced all the way down but is holding above levels around an important support level of $3,550. There have been indications that we might have seen a possible reversal pattern forming on the 1-hour chart, but so far we have not confirmed it. We’ll keep watching to confirm or invalidate this idea over the next several weeks.
Are there any signs of support or resistance levels that we think will hold?
The key Fibonacci retracement levels for Bitcoin are 61% and 76% of the recent move down. The chart above looks like a nice setup on the 1-hour chart, so it’s possible that we could see a pullback toward these levels before an overall trend change takes place.
