Bitcoin Bounces at Confluence of Support - 2 Patterns to Follow

Bitcoin's bounce from today's low of $25,351 is significant. Clearly, the April-May decline is a series of Elliott wave zigzags. This means we can narrow down the Elliott wave possibilities to either:

1) double zigzag labeled (w)-(x)-(y) [black labels]
2) the beginning of a diagonal pattern (i)-(ii)-(iii) [red labels]

From an Elliott wave perspective, there are 2 wave relationships from the April-May decline coming into play at these levels.

First, wave c of (y) = a of (y)

Second, wave (y) = .618 x wave (w)

Under the black labels on the chart above, a strong rally likely carries up to $30k or more.

There is another possible wave count that suggests bitcoin is in the beginning stages of a diagonal pattern. If so, then the current rally is wave (iv) and will stall below $28,500.

Then, wave (v) will trend down to below $25,351. The diagonal pattern is a longer-term bearish pattern and suggests prices revisit much lower levels in the months ahead.

Stay tuned.