Bitcoin Is Prepping The Launchpad

Bitcoin is Prepping the Launchpad

Long-term Traders:

Intermediate-term write-ups and charts are updated though have not changed. 

Housekeeping:

Update on travel schedule:

I fly home Monday morning. After getting situated back at home, I plan to be on late in the day tomorrow, and will resume the normal nightly report schedule. The altcoin and equity report will not resume until Tuesday. I am considering a makeup webinar Wednesday at 5PM Eastern. I'll update you when plans are finalized. 

Key levels:

Bitcoin Supports: $42,000, $30,000 Bear Market Pivot (or diagonal confirmation): $24,000

Ethereum Supports: $3323, $1500 Bear market pivot: $990

GBTC Supports: $42.25, $35.26, Bear market pivot (or diagonal confirmation): $24

Short-term Traders:

General

While Ether is struggling just to complete a diagonal, Bitcoin is well ahead of it, possibly preparing to launch toward $60K. 

Let's review those steps required for me to call a low likely to hold:

First, we need a complete pattern. Then we need to see an impulsive reversal through recent resistance, usually the top of b in a WXY, and wave 4 of C in an ABC. Finally, we need to test the low after the impulse forms in a wave 2 and hold.

Bitcoin

Bitcoin appears to have completed all five waves in a leading diagonal and has started the next degree wave ii with support at $46,660. Since ii has reached the .382 retrace of i, it possibly bottomed, and is ready for the move toward $60K+. However, until we have an impulsive reversal, I'll assume we have have only seen the A wave of ii.

Per above, I am not immediately bullish below $46,660.

Ethereum

I have not changed the Thursday report's section for Ether, as it has been too lagged to offer additional insight. Thursday I wrote:

Needless to say Ether is a little laggy. It may finally fill in the diagonal I've drawn over the next few days. However, don't be surprised if, when Bitcoin begins to test bulls, we see Ether take a quick trip to $3600 before finally bottoming out.

ETHBTC

ETHBTC is still working on completion of the nano wave-(2). Surprisingly, this pair has held up well, despite Ether's struggles. 

GBTC

GBTC will be updated in tomorrow night's report. 

Intermediate-Term Views

Bitcoin Intermediate

The current bull cycle, which began with the ~$3000 bottom in December 2018, is not expected to end until Bitcoin fills out five waves off that low. Currently, five waves are expected to complete between $170K and $200K though it can extend further. 

The top at $64,900 in March of 2021, marked the end of the third of the third wave (Circle-iii of 3). This means the longest and fastest wave in this bull cycle is complete. We are in the ‘fours and fives’ of the cycle, which is expected and has been more choppy than the move from October 2020 to March 2021.

I count Bitcoin already progressing in circle-V of 3, as long as Bitcoin remains over $42K. And this wave is expected to top between $88K and $114K where wave 4 will begin. Wave 4’s support will be discussed when we have a confirmed top in wave 3. However, right now, I can say it is likely to hold the $30K region.

The red alternate on this chart was added after the early December breakdown. Another break below $42K would make this count primary and gives us a more complex circle-iv which would take us back to the $30K region.

After wave-5 tops, likely sometime in 2022, Bitcoin should begin a bear market which can drop as low as $3000, and being primary 4th, can take a couple of years.

Ethereum Intermediate

Ethereum is expected to form five waves off its December 2018 low before this bull market cycle is over. Ethereum shows a diagonal-like structure making each support and target slightly less reliable. However, we can expect to see $12K to $16K before this bull cycle is over.

The orthodox view suggests that in June Ether bottom in iv of circle-iii. So, Ether would now be progressing upward in v of circle-iii. However, Ether extended into the May top, while Bitcoin was mired in the circle-iv of 3. That extension and subsequent drop suggest Ether may already be in wave-(4) and the current rally is the B-wave of that correction, rendered in red.

Whether still in wave(3) or a B wave, a top of the current wave higher is expected between $6 and 8K, most likely closer to the former, before a drop in back to the $1000 region.

After this current bull cycle completes, the coming bear cycle is slightly unclear with respect to support. However, I discuss two scenarios here.

GBTC Intermediate

We should view GBTC’s structure in light of Bitcoin’s. Since the decline in premium to negative levels, GBTC’s targets have been very close to Bitcoin’s targets divided by $1000. Therefore, the current move higher which is counted as v of (III), should reach between $88 and $114, before correction in (iv), likely back to the $30 region.

Ultimately the bullish cycle in GBTC, which started a month later than Bitcoin with a low in January 2019, should reach between $125 and $150 before the next bearish cycle. However, because GBTC’s longer-term structure doesn’t line up with Bitcoin’s due to the lack of structure, I view support for that bear market only determinable by watching Bitcoin.

As of writing, GBTC is flirting with key support for (B) of V of (III) at $35.26. A break below that level makes a reset of (iv) likely. Note I added back the previous swing count in red since it seems my previous micro may be saved, just from a very low B of red circle-3.

Ryan Wilday hosts the Cryptocurrency Trading service on ElliottWaveTrader.net.