The Bitcoin (BTC) price has either completed a correction or is nearing its end. A price increase above $11,825 would indicate that the correction is done, while a decrease below $11,117 would indicate that the price is still correcting.

The Trend Is Downward

The Bitcoin price has been decreasing since a high of $12,478 reached on Aug. 17. The decrease is likely to be a C wave, after which the upward movement is expected to resume.

Since that high, what looks certain is that the parts shaded in black in the image below are impulsive movements rather than corrections. This indicates that the underlying trend is downward rather than upward.

However, the movements are not waves in themselves, since if we outline a five-wave formation in which waves 1-3-5 are the ones outlined in the shaded time periods, the shortest wave is wave 3, which violates Elliott wave rules.

Bitcoin Downward Trend
Bitcoin Chart By TradingView

Bullish Count

The first thing we can do in order to outline a proper count is to extend the third wave. This is a valid formation, especially since both the third sub-wave and the third wave are extended, which is common during wave extensions.

The only issue with this count is that wave 1 is tiny, being smaller than almost all the other sub-waves. However, this does not violate any rules.

Bitcoin's Bearish Wave Count
Bitcoin Chart By TradingView

If the formation is correct, the price would have begun an upward movement after the low of $11,117 reached on Aug. 25. Due to the overlap after new highs were created, the only possible formation would be a 1-2/1-2 wave count, with an extended third wave. If so, the price would currently be in sub-wave one of the third wave.

The invalidation for this particular count would be at $11,117, below the aforementioned Aug. 25 low. This decrease would likely take the price all the way down to $9,900, as outlined here.

Bullish Wave Count
Bitcoin Chart By TradingView

Bearish Counts

There are two possible bearish counts that still remain valid. The first has a normal wave one, rather than a small one as outlined in the previous images. In this case, the longer-term wave 3 is extended, and the price is currently in sub-wave 2.

The price would have to drop very soon for this formation to remain valid, since an increase above $11,824 would invalidate it. If so, the decrease would likely be swift, as is the case in extended wave 3s.

An increase above $11,825 would invalidate this particular wave count.

Bearish Wave Count two
Bitcoin Chart By TradingView

The other possibility that still remains valid would be that both waves 3 and 5 are extended. However, since this formation would still have a tiny wave 1 and two extended waves on top of that, it is much less likely to transpire.

Alternate bearish wave count
Bitcoin Chart By TradingView

Also, since the count would have the same invalidation level, it is not worth tracking at the current time.

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Source: Be In Crypto