It’s astonishing the amount of people trying to explain the charts using this event. The market is acting the way it should. Lets dive into what happened in correlation to technicals at the monent.
Late July the 5th elliot wave began forming. Bitcoin daily chart shows clearly another wave inside wave (5), which is now coming to an end forming the final (C) wave. I’d like to point out that the previous big wave up (3) also came to a correction around 30 days in. That is what BTC does, it goes up and comes back to support for continuation. This wave is almost mimicking the previous one.
Now, the one thing nobody expected was going all the way down to 42k in one day. That happened before Evergrande was news, you understand that? What followed was the 2 final corrective waves (b) 48k and (c) 40k, both predictable since wave (c) is usually the size of wave (a) which fell 10k.
By losing 44k bitcoin fell below a head and shoulders pattern which placed it in a technical target to 35k. For now it has found support and bounced off the 111-day moving average, an indicator for continuation. It is likely to see some consolidation for now. 40k is support, as long as it holds it’s positive.
A black swan event is something you don’t see coming, a virus or war. Corona dump that happened last year is a good example. Evergrande is something big and vital to China’s economy, which was likely foreseen. In response China granted Evergrande a bond payment deal and pumped a lot of money in it to soothe out the potential effect on the market and avoid such crash. In addition China relies on USD for global business and they would not just let it crash.
That’s all, no speculation just stating what’s in front of you. Waves are forming like chichi. FUD affects the markets, as much as people allow it to. I hope this brought some insight to some. Try and DCA your buys, so you can take advatage of pontential dips and stay leveraged. Dips are for buying not for crying. Peace.
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