Current Elliott Wave Analysis (4H Timeframe)
Bitcoin (BTC) is currently trading in Wave 2 of a diagonal pattern. Based on the chart, the market has completed Wave 1 and is now in the Wave 2 correction phase. According to the wave count, the market is following a leading diagonal pattern in which Wave 2 displays typical characteristics of a correction. After the completion of Wave 2, we can expect a strong movement in Wave 3.
Trading Strategy:
During the current correction phase, risk management is crucial. The best approach would be to wait for confirmation of the Wave 3 breakout after Wave 2 completes. According to diagonal pattern rules, setting stop losses at the appropriate levels is essential to protect your position.
Prepare for potential Wave 3 entry opportunities, which are expected to be strong after the correction phase ends. This is when the market should experience a sharp move upward as part of the typical Wave 3 characteristics.
Key Points to Focus On:
1. Wave 2 correction: This phase is essential for risk management. It’s important to be cautious until Wave 3 begins to confirm a breakout.
2. Stop Losses: Set stop losses appropriately according to the diagonal pattern rules to protect against potential downside during the correction.
3. Wave 3 Entry: After the completion of Wave 2, the Wave 3 breakout is expected to be a strong move. Prepare to enter this phase as it typically represents a significant price move.
Summary:
- Wave 1 has completed, and Wave 2 is currently in the correction phase.
- Wait for confirmation of Wave 3 breakout after Wave 2 completes.
- Focus on risk management and stop losses in the current correction phase.
- Prepare for Wave 3 entry, which is expected to bring a strong price movement.
This analysis provides a structured approach to trading Bitcoin based on Elliott Wave Theory and emphasizes the importance of patience and risk management during the current correction phase.
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