It's always important to challenge your ideas. Especially in crypto where you have money at stake. This often comes in the form of watching other traders and verifying their count with yours!
The chart on the left has been my count for the last week or so. The chart on the right is a count that actually makes a lot of sense. Credit for this alternate count goes to Philakone.
It's not often that I use the daily candles, but in this situation I did because it does a great job of showing the validity of the alternate count.
Wave 3 is often the longest and strongest of the waves. Why then, have we had so much trouble breaking current resistances? Why is volume so low? Both of these could be explained by a subwave 5.
Wave 4 is also highly dependent on wave 2. In the alternate scenario, wave 2 didn't retrace much so wave 4 should retrace deeper.
In either situation, we seem to be coming to the end of a set of subwaves, so we are expecting a correction. Let's look at the difference between those correction levels.
You can see in this image that the .382 retrace has us going to significantly different levels. If we are in the alternate count, we could easily see levels $1,200 lower than I previously expected. Note that I lowered the top of wave 5 in the alternate count because I have a bias that believes we won't break the previous resistance of 11,700 with any conviction.
Long term, the alternate count would actually take us higher than the previous count, but short term I want to find the correct re-buy levels.
So how do we decide what to do?
You could ladder your buys. But that's quite a range to ladder buys. We didn't even consider the possibility of retracing 50% or down to the golden pocket of 61.8%. These are REAL possibilities.
Personally, I'm going to wait for confirmation. Below is the targets I'm looking for. We will look for confirmation of reversal and completion of corrective waves (most likely an ABC formation) prior to re-entry.
View charts on Trading View here: https://www.tradingview.com/chart/BTCUSD/aoBwVSy8-Bitcoin-Alternate-Count/
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