Trader: If $3000 Doesn’t Hold And $2000 Is Breached Then Get Ready For $200 Bitcoin

by Ryan Wilday of Elliott Wave Trader

In articles starting in April I discussed the bullish impulse we had seen off the April lows for nearly every coin I track. And, I discussed how the lows on May 28 were testing levels that, if broken, threatened the continuation of that impulse.

Unfortunately, as of writing, those levels have broken. These levels were $7075 in bitcoin (BTC-USD) and $505 in ethereum (ETH-USD). And, while we have a few outliers in the cryptocurrency, most coins are following suit.

Is all lost?

While this can seem disastrous, especially for those with large holdings, I still believe we’ll see long-term support hold. In fact, most markets push bullish levels to the limit before bottoming, and I’ve seen it time and time again in the crypto market. This may be one of those times. But we must see.

In very early articles, my talks at the TradersExpo, and in an ebook I wrote for the Money Show, I stated that $3000 was a key level for my long term perspective in bitcoin. And, $4700 was an ideal resting spot. So, in some regard this unraveling is not a surprise. However, since February, bitcoin has thwarted every opportunity to reach those lower levels.

Will this finally be the time?

If we do reach those levels, those interested in starting a cryptocurrency portfolio should have one of the best opportunities to start. Those with portfolios already will have a key place to add for the long-term. So, I don’t perceive that all is lost with this drop that should last a few weeks or more.

But will anyone be interested? As we know, markets bottom with the destruction of all bullish sentiment, particularly in rank and file investors. I already consider sentiment in the crypto market to range from all out bearish to apathetic. Certainly $4700 or below will stoke the flames of fear to new levels.

Now, I must offer a warning about the levels we likely are to see.

If bitcoin does not hold $3000, it will open the door to our December being the top of its primary third wave, and the primary fourth from there, can go down as far as the $200s, if $2000 is breached. I’ll develop more precise analysis for that fourth wave if we cross $3000.

If ethereum does not hold $133, or at least close, I have to consider that its entire history is a failed impulse to this date. This means we will not likely see my current target of $6900 and my ability to suggest what it will do in the future will be limited. I will call its top a three wave top, failing a full five wave impulse. And, when that happens, targeting its next move will be difficult.

Is there a bullish case?

Markets can always turn when you least expect. My method is based on the studies Avi Gilburt has done with the Elliott Wave Theory and I now apply that work to cryptocurrency. That work suggests the proportions of one wave to another at any given time, but this work helps us find probable paths, not certain paths. So, I have to still find levels where my bearish call is invalidated.

Currently, if ethereum retakes $630 and bitcoin $7700, I will have to consider upward resolution more seriously. Until then, I’ll be looking down. However, I’ll look down at the long-term opportunity it will create.

In conclusion, we have a local breakdown that is likely to bring us into long-term support areas, or a little above. While in the short term this will be very painful for current investors, it may offer a long-term opportunity for long-term holders to add, and those on the sidelines to get in.

See all charts illustrating our wave counts on Bitcoin and Ethereum.

Ryan Wilday is a cryptocurrency analyst at ElliottWaveTrader, where he hosts the Cryptocurrency Trading premium subscription service.

Related Posts:

If everyone who reads our story, who likes it, helps fund it, our future would be much more secure. For as little as $10, you can support the IWB – and it only takes a minute. Thank you. 677 views
Related Posts: