Background: If you remember my earlier TA, we called the ATH in March as an ambitious B wave, meaning February was the last motive (growth) wave before beginning this complex correction. I won’t pretend to be an expert but the pattern is clearly approaching the final stretch of it’s final corrective wave down as part of an ABCDE correction.
Whats Next: This means the bottom is close, if not in terms of price, then in terms of time. Since historically we have a pattern (since December) of week 2 downtrend, week 4 uptrend, we can possibly look for the bottom to land any day now. I could see a rally in the coming day(s) to week, but I’m not confident that this will be a strong breakout as much as it will be another consolidation in the 50-56k range, at best; and a consolidation in the 40-45k range at worst.
If we succesfully bounce from the 200 DMA, or close above it, the bull run could continue. If we close under it, the next strong is around 34k and we could have confirmation of a bear cycle, if not a bear season at that point.
In terms of timeline, I’d like to see us recover over the 20/ 21w MAs by the weekend. Falling under the 20/ 21w MAs isn’t without precedent, in 2013’s bull run we fell under it for a few days, and in 2017’s we wicked under it quite a few times. But the 200 DMA is where I personally draw a line between a bear cycle and bull cycle.
Note: Interestingly the point of control for the past couple months is around 56k. The value area from a price perspective has a bottom range around 50k. is extremely oversold for 4 days, which is above the average for this cycle. Both of these suggest to me, besides clear market manipulation, that we also are due for a reversal soon, but that reversal may be weak or temporary and may precede additional drops as we look for the bottom of this E wave.