Around December 10-12th, I suspected the market would go lower, and one justification for that was Bitcoin’s lethargy (discussed at greater length here). Now, as it turned out, the market did sell off and Bitcoin has stayed lethargic. However, it’s also not declining either, and the absence of selling combined with other things I am looking at now makes me feel as though we are set to rally, and perhaps very strongly so.
And so we should be able to account for this on $BTC, the Great Liquidity Thermometer™. The triangle-looking consolidation we’re in, I believe, is actually a wave 2 flat correction.
It’s odd, because the rally off the spiky low looks like a 3-wave structure, and so it can’t be an impulse. However, if we accept the first leg of it only as an impulse (my minute [blue] 1), then the rest falls in place pretty well. I like looking for these because they’re not obvious, they’re difficult to imagine, and they throw a lot of people off.
Now, that doesn’t mean we should always be trying to do this. If we see a 3-wave move, we should usually accept that. One should have other reasons and not just do this because one wants something to go in a certain direction (and I have other reasons here).
But, also, I have seen this structure on Bitcoin before, and it then, too, was a two. So it may be in the nature of the instrument to coil like this before big rallies:
This may have looked like a triangle at the time, but it most certainly was not.
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