The cryptocurrency market has not made itself clear just yet, but after Wednesday's action, I have a strong leaning. We will see $6800 in Bitcoin (BTCUSD) before the next drop, or we will breakout. I believe we're going to move into the "upper pivot" area where the market will make itself known -- that is, whether this correction is over or not. If you followed one of the convos in the threads today, I stated that we were coming down in a diagonal in BTC. I was not explicit, but if you've been around a long time, you know that diagonals put in strong reversals and that's exactly what we saw this afternoon. So what now? Let's look at the coins separately below.
But first let me say this: The market has refused to give us one more low, and meanwhile it has been building a very strong technical condition on the daily chart that could suggest a strong rally is possible. Divergence in the positive direction is now months old, and short interest is hitting records. Honestly, if the great sell-off is going to happen, ideally it did already. That said, the patterns down here are messy, typical in a diagonal but not even complete as a diagonal. And some coins are starting to launch, slowly. As I've said, I will not ring a bell, but I will do my best to point out where charts are likely to accelerate in either direction. I have also said that long term tranches are reasonable down here as long as stops are minded as we rally. Do not be surprised by sudden breakout. But risk still remains to the downside until those breakouts are confirmed.
As stated we had a diagonal in Bitcoin today. It can be that we saw only 1 of wave 5 of white C here. And, I cannot say enough that I prefer that. However, we've already swallowed almost that entire diagonal. We really need two more waves under $6278 for that white count to extend. I doubt we'll see that. The conundrum this leaves us with is the August low not broken and our count incomplete. So, I am looking for the orange count now. While white is possible, we really have no room. Depending on action tonight, orange may be the new white after this report, and so we may have a decline sub $4000 even $3500. HOWEVER, if we at any moment breakout over $7090, I will be looking for a bottom is in scenario. I posted what that may be like earlier today, but I will elaborate further if we break above that level.
I am watching the same scenario in Ether I've been watching for a couple days now, where we rally to $250, then come down in our final wave. This is great pinball. Today, the downside rejection really strengthened this view. However if we break over $300 and follow through to $350, my view will be THE BOTTOM IS IN and I'll start marking support more than resistance to check follow-through.
Note that a breakout here and now does not preclude a larger B wave rally that brings us back into this area in a return trip months from now. I am taking this correction, still one swing at a time, because wave 4's are notoriously tricky.