At the time of publication, Bitcoin’s price is trying to recover $ 50,000. With the Ichimoku indicator on, the largest cryptocurrency by market capital is also trying stay above the clouds.
Last time, the cloud was lost under similar circumstances. This resulted to one of the most unfavorable sales on Black Thursday, March 2020. Could this be a possibility for crypto?
Standing high above the cloud could prevent another Black Thursday
The debate over whether the bull or bear market will continue will continue until Bitcoin reaches a lower low, or breaks above $50,000 and cracks its current all time high.
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Currently, there is a battle between the bulls & the bears. Although it appears like $ 50,000 is what the price is, the price action is trying keep above the Ichimoku cloud, also known as Kumo, over the three-day period.
Bitcoin could lose its cloud -- Source:| Source: TradingView.com: BTCUSD
The cloud of the past can be used to predict the future. If the cloud is lost within the timeframe, it could lead to a similar collapse to Black Thursday. A red cloud signifies a bearish market force. Bitcoin is on the rise but bears could still have the upperhand.
A theory about the end of Bitcoin correction
A fall of this magnitude does not necessarily indicate that a downtrend has begun. A downtrend is simply a series or lower lows and highs. This will be what happens in Bitcoin, if the upper cryptocurrency reverses.
Even Black Thursday was a buy sign, marking the completion an ABC correction. According to Elliott wave theoryAfter each pulse wave, a corrective signal follows.
A second ABC correction would result a lower low. Source:| Source: TradingView.com: BTCUSD
The ABC correction shows that the C wave is always lower then the A wave. This idea is further supported by the fact that the rallies on the rise experienced a similar subdivision.
There is no guarantee that the C wave will arrive. Aside from the fact that the pulse waves are moving in a main trend direction, it is possible that the current corrective wave in wave four in a larger structure could be the wave 4, which would make any downside quite questionable.
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The larger formation indicates a fifth wave before the bull market ends. Wave five will be memorable. If the formation is valid, Bitcoin may experience its worst bear market.
– Tony “The Bull” Spilotro (@tonyspilotroBTC) August 7, 2021
Featured image by iStockPhoto, Charts at TradingView.com