Bitcoin: Impulse Still In Play?

Bitcoin has retraced into the high 64Ks and overlapped Wave i of the minor impulse structure. Is the impulse no longer valid? I will explain, plus what to anticipate as far as bullish and bearish scenarios for the coming week. It is IMPORTANT to continuously evaluate BOTH sides of the market in order to gain a better perspective which plays a significant role in decision making.

The Wave i/iv overlap is a key criteria when it come to validating impulse structure. If the structure stays intact (wave i/iv do not overlap) then it is within reason to anticipate a Wave v (test of 73K). IF Waves iv/i overlap, then Wave v becomes much less likely. In this scenario, it is more reasonable to expect the consolidation to continue which means there is a greater possibility price tests range lows like 56K or 60K areas respectively.

Now, while there has been price overlap, it is NOT significant enough to really count. The overlap occurred briefly and it consisted of long candle tails. In my opinion, in order for the impulse structure to no longer be valid, price NEEDS to close significantly lower than 64K (see small blue square). Candlestick tails and swift rejection of the area can be interpreted as the impulse structure still being in play and it's within reason to anticipate Wave v developing in the coming week or two.

How about the bearish scenario? At the moment there are two inside candles present (see arrow). Inside candles are typically momentum continuation patterns relative to the recent broader candle (which is bearish). A break below these candles (around 64,500 area) will likely lead to a test of the 62K to 64K area in the coming week. In this scenario, the bullish impulse is no longer valid and further consolidation becomes the reasonable expectation.

How you navigate these scenarios is going to largely depend on your personal style and risk tolerance. There are always more opportunities on smaller time frames and the information that I provide here can be used to prepare for potential signals or trade ideas on these time frames. Some experience helps when it comes time to confirm such opportunities because markets are MOSTLY RANDOM. A confirmation tool like my Trade Scanner Pro shines in this area.

Either way, there are 3 types of signals to recognize: continuation, random and reversal. Reversal is the easiest to spot because it begins with a predetermined support/resistance level and can be evaluated respective to the broader trend. Continuation patterns are tricky because they can be more random, and random signals you are always trying to avoid even though they can product a positive outcome. Knowing what to look for in advance helps immensely when navigating consolidating environments like the one Bitcoin is within.

When it comes to skill in this game, its the ability to adjust to new information since markets are MOSTLY random. "Thinking" you know where the market will go, having opinions etc, is precisely why you will be continuously fleeced. Reject the herd mentality by first accepting that NO ONE can forecast where the market will be. They do by coincidence. Second, do your best to develop a decision making process that relies on the LEAST amount of information possible. Most of the information available at the retail level is NOT for your benefit. From there you have to identify actionable information (HINT: start with trend. support/resistance).

Thank you for considering my analysis and perspective.