In my previous BTC analysis, I mentioned the high probability of a short-term upside movement, testing the previous green resistance. This is what happened:
What can we expect now? Corrections can be extremely tricky, and its normally where the market hunts for stop losses.
I´m currently working with 2 scenarios (both are bearish, but the second one still accounts for some more upside):
A) A regular flat has been completed
This is my primary scenario. Regular flats have a wave B that is close to 100% of wave A, and wave C should occur in 5 sub-waves (a diagonal is also valid). This is what we have on the chart:
For this scenario to gain strength, a breakdown from green support at 16,650 would be necessary.
What I don´t like about this chart is that the pullback to the upside is very short. It hasn´t even touched 38.2% (at 17,070). Of course, pullbacks can be really short, but statistically speaking, it is not what usually happens.
This leads us to the second scenario:
B) The correction is a zigzag
In the zigzag, wave C would go higher than wave A, and the A-B extension is usually between 100% and 161.8%. This is shown on the following chart as the big yellow box.
If price continues rising, my favorite target for a reversal is the 17,320 zone, which is a confluence of 50% pullback and a strong resistance level (shown in blue).
Note that in both scenarios, my bias is very bearish. Even if we go higher on the next few days, I do expect a breakdown from the yellow box zone.
Between the green support and resistance areas, I´ll just watch.
What are YOUR ideas?