Bitcoin (BTCUSD) 1H Chart 3/27; click to enlarge
Bitcoin is about to end the week in a bullish correction against its prevailing downtrend throughout most of March. After tagging 236 during the 2/25 session, we saw the pair bounce up to 255. The price action formed a small price bottom and price has retreated from the 255 resistance to test this price bottom.
Also, note that the RSI has cleared 60, which reflects loss of the prevailing bearish momentum. However, it did not reach 70, which shows lack of bullish momentum. Indeed, for the most part, the 1H chart still shows a bearish market. But if price can hold above the 242-243 area during the 3/27 session we might see some bullish correction in the short-term. But again, we should limit any bullish outlook within the context of a correction because the decline in March is shaping up to be a bearish impulse wave.
The 4H chart shows the 1-2-3-4-5 wave structure that resembles what’s call the “impulse” or “motive” wave in Elliot Wave terminology. This suggests that the trend in this time-frame (short to medium) is at least starting to be bearish.
Note that we completed 5 waves, after which a 3-wave bullish correction could be anticipated – at least theoretically, based on Elliot Wave Principles (EWP). But there are many variations that make this forecast a bit “random”. Still, if there is a pullback, we can use an EWP projection back towards wave where wave 4 ended, or higher towards where wave 2 started.
This scenario allows some near-term to short-term bullish correction within a short to medium-term bearish trend.