Bitcoin made a first bearish break below the 21 ema zone since September 2020. But signs of the overall uptrend remain strong with all the moving averages aligned.

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This article reviews the key Elliott Wave patterns and chart patterns. We also analyze what to expect next in the path of least resistance. 

Price Charts and Technical Analysis

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So far, price action has indeed completed the bearish pullback as expected in our previous analysis. The strong push above the 21 ema is typical for a wave 3 (purple). This means that the bearish breakout below the 21 ema zone is probably a wave 4 (purple):

• The wave 4 (purple) outlook remains valid as long as price action stays above the 144-233 EMAs on the daily chart.
• A break below these EMAs could pause (orange button) or invalidate it (red button).
• The large space and gap between the short-term moving averages and the long-term moving averages also indicate a strong uptrend.
• Now price action is back inside the 21 EMAs. A bullish breakout above the 21 EMAs (green arrow) could either indicate a) an uptrend continuation or b) a larger wave 4 correction.
• A 2nd break below the 21 EMAs could indicate a pullback (orange arrows). But eventually, a larger uptrend is expected (blue arrow).
• A continuation pattern like a bull flag (grey arrows) could indicate an immediate uptrend (blue arrow).
• The AO bars have reached the middle line after a series of lower highs. This could help confirm the wave 3-4 (purple) analysis.
• The next targets could aim at the $75-80k levels.

On the 4 hour chart, price action seems to be slower in recent weeks. This could be explained by the corrective nature of a wave 4 (purple):

• A larger ABC (pink) pattern could be developing within wave 4 (purple).
• A bearish ABC (orange) seems to complete wave B (grey).
• A bullish wave C (grey) could complete wave B (pink).
• A bearish bounce (orange arrows) could see price test the bottom again.
• A bullish bounce (blue arrow) could complete ABC (pink) in wave 4 (purple).
• A flag pattern (grey arrows) could indicate more upside (blue arrow) rather than a deeper correction.

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