The wave counting of the 4-hour chart of the bitcoin cryptocurrency does not have a completely standard appearance, but at the same time, it is quite clear. The instrument is moved exclusively by three-wave corrective structures of different sizes. All these structures are clearly visible in the picture. Based on this and the fact that the instrument failed to make a successful attempt to break through the 100.0% Fibonacci level, I assume that the construction of a new three-wave trend section has now begun, this time an upward one. If this is indeed the case, then the proposed wave a may already be completed. If this assumption is correct, then the construction of a corrective downward wave b has already begun with targets located near the $34,229 mark, which corresponds to 50.0% Fibonacci level. After that, the instrument may make another attempt to rise to the 38.2% Fibonacci level within the framework of the expected wave c.
The news background for bitcoin in the past few days has not been the most favorable, nevertheless, it has improved compared to recent months. For a second, the markets put the news of the repression of miners in China out of their heads, as well as the uncertainty with the US legislation regarding cryptocurrencies. But they drew attention to the recent speeches of Elon Musk, the message that Tesla may return to selling electric cars for bitcoins. The reluctance of large investors to maintain sales below $30,000 was also taken into account. All these factors together supported the main cryptocurrency, although, from my point of view, it will not become the beginning of a new upward trend section. The graph clearly shows that even over the past few months, when bitcoin quotes have already dropped to the area of $30,000-$40,000, upward waves have been repeatedly built, very similar to the one that was built in the last few days.
Thus, the increase in the price of bitcoin should not surprise the markets, nor should it lead to conclusions that do not actually exist. From my point of view, a set of corrective upward waves is simply being built. Bitcoin cannot constantly decline or rise. Thus, I do not expect even more than three upward waves. In addition, the important level of $41,500 has already prevented the instrument from moving higher several times. It is likely that this time the corrective set of waves will be completed around it. I would also like to draw your attention to the absence of strong news background in recent days. Elon Musk's statements are of great importance for the cryptocurrency market, but they are not important enough to force the markets to buy bitcoins in batches again. In general, no matter from which side you look, it all comes down to the fact that the increase in quotes is temporary. Even the message that Tesla sold $23 million worth of bitcoins in the second quarter is more important than Elon Musk's statements.
Based on the analysis, I believe that the next three downward wave structure has completed its construction near the 100.0% Fibonacci level. Thus, the construction of the new three upward waves has now begun. The first wave of this three may already be completed, thus, near the 38.2% level, one could catch a downward reversal with targets located near the $34,229 level. And after completing the construction of wave b, you should catch an upward reversal to build wave c with targets around $41,500.
The material has been provided by InstaForex Company - www.instaforex.com