Bitcoin hit $ 50,000 this morning – a feat that may well outweigh the bear market. But bulls can celebrate very quickly and the most painful scene of the recent triangle could shake both bears and bulls in the days ahead.
Take a closer look at the symmetry triangle here, what the corrective pattern suggests, and why bulls are definitely not out of the jungle yet.
Downtrend unaltered, symmetrical triangle possible
Downtrend can be deceptive. They don’t always mean a bear market, and even if one downtrend breaks the line, another can prevent a higher formation and reaction bulls are expected.
Related Reading | Can a bitcoin bull flag blind a bear?
For example, when the bitcoin came out of the downtrend resistance of the beer market, there was a rally of $ 13,000 in early 2019. However, made at that height due to the new downtrend line, Bitcoin spent another full year and then down some new downtrend resistance.
There is still one more downtrend resistance to go before bulls are out of the woods | Source: BTCUSD on TradingView.com
Resources often need to clear three opposite trends in order to resume the initial trend. This situation is happening now, but on a much shorter time scale. The price of Bitcoin has made it through two downtrend lines, but there is one left.
Drawing a symmetrical support line provides the possibility of a triangle that some technology analysts currently say. Legitimate trendlines have at least three touches, but a third touch can provide the final e-wave of a triangular corrective pattern during a bull market.
The wave 4 correction could be an Elliott Wave triangle pattern | Source: BTCUSD on TradingView.com
The price correction wave of Bitcoin may be nearing its end
The e-wave could clear any position built in support of nearly, 1,000,000, crushing bulls who thought they were bull flag breakouts. The move would restore the brightness of Bearcoin and take the price of Bitcoin to a range of $ 30,000 to suck in a more concise position.
Only then can the price of Bitcoin make it through the top downtrend line to continue higher. But it all depends on where the e-wave “ends.” It is noteworthy that such a triangle often leads to new heights during a bull market.
Related Reading | Bulls regains control over Bitcoin Trend Strength: What to Expect
An Elliott wave corrective triangle will appear during 2 or 4 waves of a motive wave, which represents the initial trend. An Elliott Wave correction triangle and its higher bottoms will strategize the bull run structure and conform to the Elliott Wave rule of wave change.
If Bitcoin is in a motive wave, wave 5 should begin soon | Source: BTCUSD on TradingView.com
This rule suggests that only one of the two corrective waves – wave 2 or 4 – will make a sharp correction. The other would be a lateral correction of a lower low. Not only does the corrective wave change in overall intensity, the patterns change. This means that if wave 2 was an Elliott wave zig-zag, then wave 4 would be a plane, triangle or other pattern.
Elliott Wave Theory provides a roadmap for a trend. Unless otherwise proven, the roadmap continues to say that once wave 4 ends, wave 5 begins. But for now, the bulls haven’t gone out of the woods yet and it may still be possible to jump down.
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Featured image from iStockPhoto, Charts from TradingView.com