rally certainly surprised me. In my last article from a month ago, I was looking for a top around $16,150+/-150. However, BTC reached as high as $19912 this recent Tuesday, Dec. 1. Upside surprises and downside disappointments are the hallmarks of a bull market. So that is a good thing (if one is long). As such, I was forced to adapt my Elliott Wave Principle (EWP) count: see Figure 1 below.
Figure 1. Daily candlestick chart, with detailed EWP count
The recent dip to $16,270 counts, in my humble opinion, best as a (grey) minute wave-a of a (green) minor wave-4. The subsequent rally was wave-b, and now -ideally- (grey) wave-c is under way back to $15,675-16,500 target zone to complete an (irregular) flat 4th wave. Please see here for a description of a flat correction. If BTC does not breakout, and close above $19,680, that is my preferred path forward. A break and close below $18,175 from current price levels will add further weight to the evidence for the flat 4th wave scenario. Once this correction, which is then technically and only digestion of the recent gains, is over, BTC should rally to $21,700-23,700 to complete the green wave-5 of (red) intermediate wave-iii/c, etc.: the grey arrows highlight this path.
The alternate scenario is a direct rally to the $21,700-23,700 target zone, blue arrow, but that requires, as said, a close above $19680. Given all the negative divergences on the technical indicators (red dotted arrows), e.g., the MACD has not given a buy signal for the recent rally, I find the upside scenario less likely.
Overall, the next “dip” in BTC to ideally $15,675-16,500 can be a great buying opportunity, with the appropriate stops in place, i.e., a close below $15,675 would be a severe warning upside may not come, with a 2nd red light at the $15140 level. For now, there is some uncertainty about the short-term direction (days), but with the breakdown and breakout levels mentioned, trading it should not be difficult. Longer-term, the rally in BTC has, in my opinion, still has a long way to go, if downside/support levels hold.