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Bitcoin: Something Big Is Brewing (BTC-USD)

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Paper abstract

Bitcoin (BTC-US Dollar) has barely moved in the last few weeks. However, historical evidence suggests that we may see significant price swings this week.This can occur in the form of relief rallies, final surrender events, or impulsive events Rise suggesting bottoming out.

something big is brewing

Bitcoin has been dormant for the past few months. The coin’s volatility decreased and the price was almost flat. In fact, Bitcoin has outperformed the entire market since he bottomed out in June. Bitcoin maintains support while the market’s S&P makes new lows.

S&P and BTC

S&P and BTC (TradingView)

Sentiment for cryptocurrencies and stocks is at an all-time low, which could mean a bottom is imminent, which is confirmed by a strong reversal. However, one final shakedown is possible There is also sexuality.

Either way, Bitcoin seems to be on the verge of a big move, and this is backed up by history.

Bitcoin volatility

BTC Volatility (TradingView)

As you can see on the chart, when volatility reached very low levels in the past, it was often followed by large swings in price. In October 2018, there was such a selloff that bitcoin fell below his $3000 mark. Something similar happened with his 2020 COVID crash.

On the other hand, we have also seen periods of low volatility leading to large moves upward, as happened at the end of 2020.

This week could be a big week for Bitcoin, is it a sell-out or a take-off?

Breakout or Breakdown?

Let me just say it. At this point, I believe we should see Bitcoin collapse and go one lower. But many analysts also point to the chart as evidence of an imminent collapse.

BTC 2018 vs 2022

BTC 2018 vs 2022 (TradingView)

It is understandable that Bitcoin has formed a very similar structure today as it did during the 2018 crash. A triangle has formed and volatility has reached similar levels to his 2018. If history repeats itself, Bitcoin will collapse once it reaches the top of the triangle.

And where will the price land? Main areas of support are: delta pricecurrently about $13,500.

So let’s zoom in on the current price action and take a closer look at what’s going on.

BTC EWT count

BTC EWT Count (TradingView)

Since around March 22nd, Bitcoin has completed its 5-wave structure and has undergone a larger revision. The most likely scenario is that the June low was the 3rd wave low and is now ending wave 4, ending wave 5, or starting the first wave of a bullish cycle. is.

If wave 4 ends, Bitcoin could rise to $27,782, a 50% retracement of wave 3. This certainly means that Bitcoin is gearing up for a big move, but we also expect a breakdown after that. .

Alternatively, the fourth wave may have already peaked at the end of August, labeled as the W wave on the chart. Then you can claim that he has completed 5 waves towards the bottom of the 5th wave. As a result, we are now in the third wave. This means we may see aggressive selling typical of a third wave and head into the $14,200 territory. This is 1.618 ext of the red first wave measured from the apex of the second wave. This could mean a bottom somewhere in this area, but a drop to $12,000 is also possible. This is disabled once the high of wave 2 is crossed.

Finally, we can say that we have already completed 5 waves and are ready for a reversal. However, this is the least likely scenario as it means that the bottom of the fifth wave has been truncated. This means that the 5th wave did not break below the lows.

BTC bull case

BTC Bull Case (TradingView)

That said, we saw a strong reversal on Thursday. A hold of $18,500 and a well above $20,000 would make this scenario even more likely.

final thoughts

Whatever happens next, I believe there will be some uptick in volatility and price volatility. Bitcoin needs to break below its lows, but we also have to consider the possibility of a low.ETH-US Dollar) and the S&P 500 (spy). A dollar index is also displayed (UDN) should approach the top and trigger a cryptocurrency rally.

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