Geometry suggests very limited support at present value area. Near term support below, but Bitcoin will probably move lower.


Bitcoin hanging by a thread

100219btc 100319btc

The present value area for Bitcoin (8161) is not a very strong support zone. It is currently trading below the 2/8th inner harmonic pivot. This is a bearish condition because the 2/8th major harmonic is often a strong pivot point if price reaches it after a very swift move. Instead, we have seen price drop well below the 2/8th inner harmonic and continue to trade lower until it did recover somewhat and is now oscillating around that harmonic level. And the current 4-hour is trading below the 2/8th inner harmonic – it has tested the level, traded above it and has been unable to close above it over the past 8-hours. The only major support in this current geometry is the 2nd inner arc. If price drops below that level, then we are more than likely going to see Bitcoin travel down to the 3/8th Major Harmonic @ 7562.

In yesterday’s article, I projected some Elliot Wave levels into the future, with the closest level being at 6580. If price does drop down to that level, then we should see a fairly decent bounce. The 6580 value area is between the 4/8th inner harmonic between 5041 and 7562. Because the momentum of the current down drive is so strong, we should expect to see it be equally strong on the move south from where it is trading today. More than likely, we will see the following scenario:

  1. Week of Sept 30th (current trading week) – consolidation followed by a drop to 7562 between Friday (October 4th, 2019) and Sunday.
  2. Week of October 7th (next week) – similar trading activity to this week. Consolidation throughout the majority of the week with significant trading action against the 7562 value area. There would probably be retest higher of the 2/8th inner harmonic at 8192 before being rejected and then pushed lower over the weekend)
  3. Week of October 14th – Regardless of where price is trading (either 8192 or or 7562), Bitcoin should start a very fast down drive below 7562 to hit the 6500 value area. This would more than likely created a consolidated trading range that would last till the end of October

In my own trading, I’ve sold around 50% of my positions in anticipation of this drop. For many of my altcoin positions the re-entries will account for a nearly +40% discount! If prices do the opposite, I do have some resting conditional buy orders well above the current trading ranges. Half of that resting capital is sitting in Bitcoin that will be converted into altcoins. Another option that we could see here is Bitcoin to drop but altcoins to experience their own rally. It’s often hard to forget how long the altcoin market has been in a bear market, but it is nearing almost two straight years. And in the entire cryptocurrency market cap, the altcoin market is still experiencing the longest and most destructive bear market in cryptocurrency history. I am anticipating a nice relief rally sometime in this quarter for the altcoin market.