The level prompts traders/investors to reposition their bullish targets. As a result, they accumulate Bitcoin while setting their initial sell-off level at ,845, the top of Wave 3. Traders then eye an extended consolidation between ,153 and ,845, followed by an upside breakout move that forms Wave 4.
Trump wins = brrr
Nevertheless, the cryptocurrency finds a credible price floor at ,153.
One day, the market is going upward, only to see it correcting lower the next day. There is a short-term bias conflict that depends on how the election plays out. Part of the reason is the long-delayed stimulus deal. Both the Democrats and the Republicans have entered a political deadlock over the release of the next coronavirus fiscal relief.
Biden wins = brrr
Bitcoin Wave Fractals illustration. Source: BTCUSD on TradingView.com
— Barry Silbert (@BarrySilbert) October 28, 2020
Either way, bitcoin wins
The apprehensively possible consolidation phase expects to come ahead of the November 3 presidential election. As covered earlier, uncertainty over the outcome of the Donald Trump vs. Joe Biden standoff has kept investors cautious about putting all their money in risky, as well as safe-haven assets.
Technically, Bitcoin could form ‘Wave 4’ after the election, flipping ,845 into a support level.
Despite strong fundamentals, a misbalance in the long/short ratio of Bitcoin derivatives risks putting bulls on the wrong side of the trade. A surprise sell-off led by whales could end up liquidating long positions, thereby causing further panic-selling across the market.
As a result, Bitcoin now has two complete fractals: ‘Wave 1’ and ‘Wave 2.’ And now, it is halfway through completing the third one, dubbed as ‘Wave 3.’
The bearish analogy borrows evidence from an eerily accurate fractal on the cusp of repeating for the third time since March 2020. The said pattern is an upside parabola. Bitcoin ascends every time while treating it as support. The cryptocurrency then breaks below it, only to find a credible support level later.
Bitcoin bears should prepare for its price to drop towards ,000.
Bitcoin traders are watching the developments in the US political space closely for the very same reason. The cryptocurrency surged by more than 200 percent after the first fiscal aid of roughly trillion. That itself serves as a fundamental fractal, suggesting a big Bitcoin rally would follow once the US chooses its president.
Bitcoin Downside Risks
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