Upon further review of the wave structure for Bitcoin since its top, this entire pullback qualifies as a leading diagonal for intermediate wave (A) of primary wave . Leading diagonals have a 5-3-5-3-5 wave pattern. If correct, then this is just the first leg of an ABC correction for primary wave . Leading diagonals are followed by very impulsive waves that typically retrace 78.6% of the leading diagonal’s move. These waves have all the characteristics of a V bottom and the next leg of the bull market. In this case, intermediate wave (B) would retrace to around 17,000. Once the (B) wave is complete, then we should see another steep move down to where (A)=(C) (see white rectangle).
So, I’m now fully long BTC (should I be wrong and it breaks down much further I”ll exit that long). Starting around the 61.8% retracement level, I’ll begin to exit my position and should it continue up, then I’ll be completely out by the 78.6% retracement level. Should BTC go on to make new highs, then I’ll concede the bottom was in and this wasn’t a leading diagonal, however should it sell off, then I’ll look for even lower lows than present to re-enter the long trade.
If this begins to track this scenario, then I’ll keep things updated.