Bitcoin: The 46K Inflection Point?

Bitcoin price lingers near previous highs going into a light volume holiday week. With the current wave count still intact, the 46K resistance zone is within reach. The break of 44,500 will confirm the bullish momentum. It is IMPORTANT to keep in mind, that this leg is most likely a Wave 5 that may be completing a broader B Wave (monthly chart). A high probability turning point (take profit zone) is between 45K to 46K area. Price can reach further if there is a strong enough catalyst BUT once 5 waves are complete, that usually means there's not much potential left over the near term.

I use wave counts in this context NOT to forecast the future, but instead to get a perspective on RISK. Wave 4's in a clearly defined impulse offer the higher probability setups which often lead to Wave 5. Once the impulse is complete the probability of a broader corrective move increases. This means it is better to be more conservative at current levels (day or swing trades only) while keeping investments to a minimum or not at all.

I don't pretend to be right, BUT if this turns out to be a completion of a B wave on the monthly, the next broader corrective move (C Wave) can be dramatic. As I have mentioned in previous articles, a wave of this magnitude can take months to play out. And a major catalyst (usually a surprise) will be required to stimulate such a move.

Markets are a reflection of collective sentiment and sentiment tends to be seasonal. Right now is generally an optimistic and festive time, and it is clearly reflected in ALL the markets (Thank you Santa Powell). Times like this often blind investors because everything appears to be in line with logic (halted rates, Bitcoin halving, etc). Everything is all rainbows and cup cakes until some expected news comes along and has to be priced in.

Markets do NOT operate on simple logic. They are complex and adjust as NEW information gets priced in. Forecasting further than 2 weeks out is nothing more than entertainment. The best way to go about this is focus on the near term levels and consider a number of scenarios based on IF price breaks or holds. For example, if 44,500 breaks, a leg higher is likely BUT if 42,500 breaks instead, then a test of the 40K support comes into play.

This week begins with a holiday and I would not expect a whole lot of action for at least the next TWO weeks. That does not mean there won't be any opportunities, but I would just expect less.

I will not be streaming Monday and will instead stream on Tuesday. Have a happy and healthy holiday and thank you for your continued interest and support!