Is BTC in a Major Degree Correction?

via semastersPRO

The chart below is a weekly chart of BTC 2.85% on a logrithmic scale. I have shown the wave counts to 4 degrees of trend. The key question is ‘Are we in a higher degree (1 or 2) correction and headed well beneath 9,000; or are we going to hold the current low of 9022 ( BitStamp ) and make new highs?’ My initial opinion is that it is possible that we are in a higher degree correction, but not confirmed. If the minor support trendline (highest of the 2 trendlines shown) is broken to the downside, then it we are likely headed to one of the first 2 target zones shown, which would take us to the 5,500 area, which means we would be in a higher degree correction. If the minor support trendline holds, we are likely headed to new highs, and continutation of the trend. Note that at the 9022 low, the market has not yet shown enough weakness to hook back to the 1st previous high (as it has done on 5 of the 7 previous corrections, as annotated in purple).

I have shown the 19,666 top as a Degree 1 Wave 3; however, it is possible that Wave 3 extends, meaning the current top is just Degree 2 Wave 1 of Degree 1 Wave 3. If that were the case, the current correction would be a Wave 2 correction at Degree 2, which would still imply that we might reach the targets shown in the 5,500 area.

I do not profess that the wave counts shown are 100% correct or that they are even the ‘best’ counts. I would ask that anyone who has an educated opinion, especially those who would consider themselves Elliotticians, please weigh in on either i) improvements to the wave count and/or ii) evidence that you see as to whether or not we are in a higher degree correction.

If enough traders do weigh in, I will summarize the results and we’ll see if there is a consensus one way or the other.

Since the minor trendline support is still holding, and since the market has not yet hooked back to the first previous high, I am labelling this analysis as ‘Long.’ However, for the reasons stated above, it is Long with Caution! It is quite possible that if we do rally back to the 19,600 highs, it might be another test back with lower lows then forthcoming in the possible higher degree correction. So if we make it back to the high, you want to see strength going through the 19,600 without a significant pullback back underneath 19,600.