BTCUSD Perspective And Levels: Price Structure Implies Strength.

30 июл. 2017 г.

BTCUSD Update: Recent market structure implies underlying strength even though low volume holds it back. With 8/1 just around the corner this market is likely to stay quiet, but IF a bullish catalyst unfolds on Tuesday, there is no structural resistance holding this thing back from new highs and beyond.

The recent upswing off of the 1826 low happens to be relatively close to the 1921 support (.382 of the broader trend) which was in place BEFORE the bounce. The fact that price found so much momentum off this level indicates that the broader bullish trend is intact which implies supports should hold and resistances should break moving forward. Even though the more recent upswing to 2922 did not go to new highs, it is still strong because structure has generated a new support zone from 2053 to 2250 (relative to .618) and the 2500 support level (relative to .382). Price has already reacted off of the 2500 area by going slightly below, but again moving quickly away from the level which is another sign of strength (there is even a nice triple bottom formation visible on smaller time frames in that area).

In terms of Wave count, the retracement to 1826 is clearly a completion of a larger degree Wave 4, identified not just by the chart formations, but also the location of the low which is in the immediate area of the .382 support of the broader trend. And this puts this market in the midst of a upward Wave 5. These are the most predictable waves in my opinion since they require 4 waves to be in place. Within the Wave 5, this market is in a minor Wave 2 correction which can retest the low 2400 support or even the 2250 to 2053 support zone. If this happens, this is a perfectly normal Wave 2 and these support areas serve as good reference points for reversal patterns to begin Wave 3 of the larger 5.

As far as resistance goes, the only structure this market presents at the moment is the 2550 to 2750 area which price is within at the moment. This is a minor resistance and is relative to the .618 of the recent bearish swing. A bullish catalyst on Tuesday will likely push through this area like it is not even there.

In summary, this market appears poised to push new highs based on the technical structure at the moment. Keep in mind, technicals cannot anticipate fundamental surprises especially of the magnitude that can unfold on Tuesday. Anything can happen. If participants like the outcome on Tuesday, then this market will be on its way to forming a Wave 3 of 5 which according to the Wave Principle, is NEVER the shortest wave. If the market is not satisfied with the outcome, and price pushes below the 2053 level, that will cancel out the bullish structure and most likely thrust this market into a broader consolidation.

Comments and questions welcome.