With last weeks recovery, the bitcoin price could break the bearish trend and cut it off. And to the joy of many enthusiasts, the current momentum could be strong enough to start a new bullish cycle.
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Successive diamond formations have ended 4 cycles so far, and it could happen again if current prices hold the bullish pattern that has emerged over the last week.
According to Elliott Wave Theory, the current big correcting II wave should be getting ready to start its last downward 5th movement, which would drive quotes to the lowest support near the $3,500 level.
From there, an ABC zig-zag movement would probably rise across the bearish channel to reach and overcome the same descending resistance at the now-unreachable $14,000 point. Furthermore, when it passes through a lower level near $11,000, the markets should leave the ongoing bearish trend behind for good, kicking off a bullish 5th cycle with theoretical targets over $50,000 in the long-term.
After the 4th wave according to Elliotts Theory, a new trading range can be considered from $11,000 to $9,000, while mathematical indicators return to the bearish trend, allowing another drop to $9,000, $5,000 and $3,500, where the technical target ends the fall.
If a new diamond formation takes place in the charts, the downward trend would end as well. However, the diamond formation is not an instant pattern or an easy signal to see: its a dynamic reference to be watched like the Elliott Wave, and also very sensitive to external factors like rumors, news, multimedia opinions or political factors.
Bullish consensus and good technological news has extended the 4th corrective wave to reach the intermediate resistance at $11,000, but prices remain inside the main bearish channel.
Japanese Candlestick signals are not enough to reverse the downward trend yet, but those signals increased at $9,000 and could continue rising in intensity at successive supports near $5,000 and even more near $3,500.
What do you think will happen to the bitcoin price? Share your predictions in the comments section.
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This technical analysis is meant for informational purposes only. Bitsonline is not responsible for any gains or losses incurred while trading bitcoin.
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