So, Bitcoin was suppose to have already jumped up and been on its way to hit our $10.5k target and we were suppose to chill back, relax and drink Mimosas while our bankrolls continue to roll in. BUT, Bitcoin is an ass, and decides what it wants to do. Not what we want it to do. Annoying, right?
Well, here we are in a critical moment for BTC , and as its unraveling, its making more sense. At first, I thought the critical level to break was $9,440, but it was shot down just $100 above that. Leaving us just 3 waves. I had thought that maybe it was forming an ascending , but as we approached the top white resistance, I knew we were going to fall down to the bottom support again and form some sort of triangle.
NOW ITS ALL CLEAR. NOT clear on where BTC will decide to go, BUT clear on what the options are. Now, lets discuss why this is pretty clear so far in terms of forming a triangle, in terms of elliot-wave rules.
So, some basic rules of corrections are:
B waves - ALWAYS and ONLY have 3 subwaves
C waves - Can only have 5 subwaves UNLESS it is in a 3-3-3-3-3 corrective pattern
Here are some assumptions with corrective patterns:
3-3-3-3-3 corrective patterns are usually termination patterns... Meaning that the correction is coming to an end.
3-3-3-3-3 corrective patterns form triangles.
All a 3-3-3-3-3 corrective pattern means is that there are 3 subwaves in each wave. So for example: for an ABCDE formation, each wave (A,B,C,D,E) has 3 waves within it.
So, lets take this information and apply it.
So far, if we look at the bottom picture, we notice that there are only 3 subwaves in each wave. So far we are on wave D, and we have formed a 3-3-3 pattern. Well... remember when I said C waves can only have 5 subwaves UNLESS it is a 3-3-3-3-3 corrective pattern? Yup... So because of that we are likely to get rejected at this white resistance again, to complete a 3-3-3-3-3 structured triangle. Now, lets talk about the two options.
The blue pill suggests that we are still in an uptrend, and should be targeting the $10.5k to $10.7k region.
This seems to be the most likely due to indication on our indicators (which I haven't talked about yet).
The 3-3-3-3-3 formation is definitely a one, and would give me the inclination that we are going to head up.
This is where it gets interesting. The only way we fall from this triangle is if we are in the red wave count. The top resistance of this triangle would have to be the A wave. Thus forming an ABCDE where E is at the top of the resistance as well. What does that mean? It means that we fall from the triangle. What does that mean? It means that we are STILL surely in the major correction. That will be a VERY signal (for the longer term) EVEN though we'd likely only drop to $8.6k and could STILL jump up $10.5k. It would just validate my original thesis of BTC jumping to near the $11k range and fall back down to $3k (see related idea: 'Similarities in Mt. Gox'). Keep in mind, the Blue pill does not invalidate that idea either.
If I HAD to choose:
If I were to die right now because I had to choose between the red and blue pill.... THEN.... Duhn duhn duhnnnn...
I'd be dead. My MIND is telling me BLUE. BUT MY BODY, MY BODYYYY IS TELLING REDDDDDD.
No but seriously, I'm seeing mid-time frame (1-4 hours) RSIs reset. I myself am short-term and I would like to pick the blue pill. But long-term I am and the red pill would just make a ton of sense right now. We'll have to wait and see! Buy on the break up, short on the break down. That's my game plan, what's yours?
My indicators give me bullish sentiment. So I'd be wrong to assume we drop, but it wouldn't be wrong to keep that option in mind. I will still wait for confirmation. By now, it's only a difference of a few bucks.
Falling thru the triangle's support line. Remember to follow me on twitter for short-term updates @CryptoEBall!