BTCUSD: Contracting Triangle ABCDE Complete. Wave 4 As Well?

2016年7月25日

Several signs are pointing to the ABCDE contracting triangle being complete:

• Looking at the daily oscillator, you can see that each wave in the ABCDE corresponds to prior to the daily oscillator's fast (gray) line passing the slow (purple) line. The daily oscillator's fast line just passed the slow line giving us confirmation that Wave (E) should be complete.
  
• The fibonacci time of the (E) wave is 1 (identical) to the (B) wave time.
  
• Price has bounced off the top of the Ichimoku Cloud's resistance which is a bullish sign.
  

Confidence in the ABCDE contracting triangle now being complete is extremely high due to the above reasons.

The ultimate question is if wave (4) is now complete. If wave (4) is complete then wave (5) has begun which should take us up above the wave (3) high of $789.78. The first confirmation of wave (5) having begun will be price exceeding the wave (D) high of $683.20. If wave (4) is not complete then the end of the contracting triangle is wave (W) and we should see a three wave up (X) followed by another move down to complete wave (4). I would say there is a 60% chance that wave (4) is complete and a 40% chance that we experience an extended wave (4) WXY pattern.

Either way, you should be long at this time and if we see a three wave pattern up with a bearish oscillator reversal then we'll take profits before the move down.