Yesterday I discussed two scenarios for a bullish and bearish bias for Bitcoin, Ethereum, and Litecoin. There is significant structure supporting higher price action, especially when analyzing the price action of the past 24 hours. One of the important areas we are going to analyze is the firm rejection and buying near strong support areas in Bitcoin over the Friday trading session.
One of the scenarios I posted indicated that there would be a strong probability of future bullish momentum after a strong move (-70% of total value) from all time high, back down our most recent swing low on February 5th. The analysis today shows a style of analysis I don’t believe I’ve ever shared here. The image above is called a Gartley Harmonic. Gartleys come in various shapes and designs: bullish bats, bearish bats, ciphers, butterflies, bull crabs, bear crabs, deep crabs, etc. The image we are looking is a bullish shark. Now, this particular formation is a relatively newly identified Gartley pattern (2011). While price has decidedly traded lower than where we wanted price to follow, it is nonetheless traveling towards the end point of ‘D’. The $12,000 being touched and traded around March 2nd is confirmed again using Elliot Analysis, see next image.
ABCD or just 3rd wave continuation?
The green diagram shows an ‘ABCD’ pattern using Elliot’s Wave analysis. This particular wave pattern is inherently bearish, but only after it reaches the $10,000 area. However, this short-term bearish signal may not last. The completion of the shark pattern and retracement of Bitcoin on other levels shows us why we can continue to have a good bullish bias. Notice also: the ABCD pattern could very easily turn into an extended third impulse wave, negating the completion of the final C to D. But let’s look at one more piece of analysis.
Massive support zones, rejection of lower lows
1. Look at this area. Bam. So. Much. Going. On. Let’s break this down.
- First off, the obvious: an emerging inverse head and shoulders formation.
- The arcing green channel is an extremely important support zone, and we have been testing it on massive volume and it has failed to break lower. Instead, we have had powerful volume participation to keep it around and above that arc.
- The green diagonal line represents the 45-degree angle. We traded below it, got support and traded above it then we tested it as support again and continue to trade above it.
- We have also formed, a pivot with candlesticks. A pivot candlestick is a middle candlestick where, for a bullish pivot, the middle candlestick has both a lower low and a lower high than the two candlesticks surrounding it.
- $10,000 value area is an extremely difficult line to break.
What does this all mean?
This all means we have a strong bias for a move higher. The combination of Elliot Wave, Gartley, Gann and Harmonic price levels all support an extremely bullish move between February 23rd and March 2nd. Is there downside risk? Of course! The long-term downtrend line is still above us, but Bitcoin is close to testing it again and this retest happens very quickly after the most recent rejection. However, the combination of a multiple strong analysis for higher prices cannot be ignored and should be weighed heavily against any downside momentum.