It’s Sunday; Saturday had decent price action, today the market is fairly stable, so I’m stepping back and planning the week. On the daily I allow that we may have already completed the 1-2-3-4-5: fifth waves are usually very impulsive, and since then the market has moved slowly and even dipped a bit last week. The base case is unchanged: 1-2-3-4-5 into the median line, then an ABC. But it’s possible the fifth wave is already done and we’re in an ABC before rising to the target. That doesn’t change my view: the median line remains strong resistance. Elliott waves are just how I map the market; I trade support and resistance, where the algorithms buy and sell. We didn’t reach the median line because of the supply zone right above us. Someone suggested drawing the pitchfork not from the absolute August 2024 low (around 49K) but from the second low, in which case the top is already in. There may be some truth to that, but a trader needs clear rules for drawing: in hindsight you can always find a pitchfork that fits your bias. I’m keeping my original lows, and in my view there’s still room to grow. Neither ETH nor the total has hit its target either; if one of them had, I’d start thinking we’d been front-run. A small drop after such an impulsive rally doesn’t worry me.
A new key level on the daily, which I posted yesterday as the ideal long entry: a normal pullback to the 0.31 drawn from the bear market lows to the highs, which is 78.2K on the normal chart. It has great confluence with a demand zone, and on the log chart the second 0.31 lands almost in the same spot, so two levels stacked on each other. That’s where I’d start accumulating and open swing longs. Will we get there next week? Probably not, and probably not within two weeks either. But after such an impulse a correction makes sense, and I think we’ll retest that level eventually, possibly after 88K. On the 4h, last week we found support in the demand zone, plus we retested the previous highs, so it’s a double confluence, though it’s just a demand zone, not a 0.31 or the pitchfork. We’re inside a formed range: the lows were broken, the highs weren’t, and we’re back inside. This week will be interesting: if we get back to the middle of the range, the odds of an upside breakout rise significantly.
The main scenario I lean toward: a rise to 88.5K, a sweep of the highs, back into the range, and then a breakdown. The more bearish alternative: down to 78K first, a bounce there, then the move to the median line. If we go up, I want to see it happen fast; I don’t want another bounce off the current demand zone, which is fairly weak, and if we revisit it, I think we head to 78K. For now price looks relatively strong, there are no warning signs, and there’s little resistance to the left. On the liquidation map we flushed a lot of liquidity last week; below is fairly empty now, with only a bit just under the demand zone at 79K (I think it gets taken eventually, maybe after the rise). The main liquidity is at 87K, just above the current highs: market makers will likely go after it, then a touch of the median line and a significant pullback. Open interest is flat, nothing special, no warning signs, if anything slightly constructive. Fear & greed has returned to neutral with price at 83K, which is nice: on the macro, the bulls are still in control. The total crypto market cap hasn’t reached its resistance either, so I’m optimistic on the whole market.
Ethereum is, in my view, even simpler than Bitcoin. Above sits daily resistance that we nearly touched, followed by a noticeable rejection. I expected a stronger reaction from the support zone, but ETH had almost no corrections, so a sharper move down after such an impulse is to be expected. We’re now in the support zone: the 0.31 from the bear market lows to the recent highs sits at 2,400, right in the demand zone, and support there is clear. ETH is either ready for the next leg up or, worst case, drops to the same 0.31 on the log chart at 2,300: that would mean sweeping the lows and leaving the demand zone, but collecting liquidity, which would be an ideal long entry. I think ETH is in wave 4, and the only question is where it ends. Fourth waves are complex and take time, but I don’t want price lingering here too long: a forming head and shoulders would raise the breakdown risk, so I want to see a fairly quick impulsive move up. The ETH target is just under 3,000. I think the ETH bottom is close, but I’d like those lows swept first, and then I’d be very interested in opening longs.
Trading cryptocurrency involves substantial risk. This analysis is for educational purposes only and is not financial advice. Past performance does not guarantee future results.
