The price of bitcoin often goes through stages of long-term consolidation. Even though trading in a limited range is quite difficult, the longer the period of stagnation lasts, the more optimistic the outlook for BTC looks.
According to Elliot Wave Theory, triangles can only appear with three swings per letter. For traders looking to scalp the market, it is best to assume that wave C of the triangle in which the price of Bitcoin is reversing was marked at $32,933 on January 24th.
A rise to the $51,000 area is very likely to occur in the coming weeks and is needed to confirm the formation of wave D in the shape of a triangle. The lower timeframes are already showing bullish signals that can confirm the optimistic forecast.
It is important to consider the alternative scenario when speculating on higher time frame patterns. The bears can still maintain control over the price of bitcoin, pushing it down to $33,000.
Long-term investors should beware that a break below wave C at $32,933 does not invalidate the idea of a triangle formation as C waves are notoriously difficult to form.
If the triangle thesis is not confirmed, the next likely scenario for the price of bitcoin will be a strong correction with a further drop in the price by 30-40% to the support level at $26,500 and $24,000.
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