Bitcoin (BTCUSD)

During this session, four distinct zones were identified where RSI dropped below 40 (#1–#4), with zone #3 exhibiting a particularly sharp and volatile downside expansion. From a tactical standpoint, this created opportunities to scale into positions at more favorable price levels. However, an often-overlooked aspect is the compounding nature of drawdown, as additional positions are layered in, total exposure increases, resulting in significantly deeper equity drawdowns.

This risk is especially pronounced in mean reversion systems, which are inherently vulnerable to extreme market dislocations or “black swan” events. Without stringent controls, what initially appears to be a structured accumulation process can rapidly evolve into unmanaged risk.

To address this, the implementation of a Maximum Intraday Drawdown (MID) limit is critical. Serving as a hard risk constraint, the MID ensures that losses are contained within predefined tolerances. Position sizing and trade initiation must be precisely calibrated in alignment with this threshold, thereby safeguarding and preserving equity over the long term.

Exiting the market in this session proved to be less straightforward, given the absence of a clear red signal bar. Nonetheless, the RSI peaked at 67 (#5), approaching the overbought threshold of 70, which provided a practical reference point for exit decision-making. In this context, the elevated RSI reading functioned as a proxy signal, justifying an exit despite the lack of system confirmation.

Based on the current Bitcoin price structure, I view the market as potentially unfolding within a double three correction, which I label as "abc–X–...." . This type of formation is typically complex in nature and may extend into a more prolonged corrective structure than initially anticipated.

Nevertheless, the underlying behavior remains consistent with mean reversion dynamics, where price tends to gravitate toward its equilibrium zone following both impulsive and corrective movements.

In this context, the RSI 40/70 strategy remains appropriate, as it is well-suited for ranging and corrective environments. It allows us to systematically exploit momentum exhaustion at both extremes of the market.

At times, our interpretation of Elliott Wave Theory may fall out of sync with actual market behavior, given the market’s inherently complex and adaptive nature. In contrast, our RSI30/70 trading strategy can continue to deliver consistent positive results.

This situation is not unusual. Elliott Wave Theory should not be viewed as a rigid forecasting tool but rather as a structural framework that helps refine our trading approach, particularly in how to sizing, entry selection, and exit strategy

Even when the market behaves contrary to our initial wave count or forecast, what ultimately matters is maintaining a disciplined system that remains profitable. The objective is not to be perfectly right in analysis, but to consistently extract profits through well-managed execution.

Bitcoin keeps extending to the top.
The foray into 76k which led to a quick selloff has now been surpassed again.
I was bearish against 76k and I profited some from the failed attempt to settle above that level.
I was thinking the journey to 60k would materialise then but it didn't.
Now I am giving some room for price to do its work and become clearer. A break above 80k ruins my downside idea.
Bitcoin's direct correlation to the stock market and inverse correlation to crude oil means we are trading the stock market by proxy
Very tricky indeed for me

Previously, we discussed the dilemma of a mean reversion system—where, during the emergence of a strong trend, it can feel as though we are being left behind by a rapidly moving market. This effect is largely psychological, often accompanied by a sense of regret, but it ultimately stems from the nature of the system itself.

This is precisely what we observed today. One effective way to mitigate this limitation is by incorporating a long-term, trend-following system. Such a system complements the intraday mean reversion approach, where the weaknesses of one are offset by the strengths of the other. For clarity and discipline, both systems should be executed on separate trading accounts to avoid confusion and maintain structured decision-making.

A second approach is to modify the exit strategy by adopting a slower exit, allowing the trend more time to develop. However, this adjustment introduces additional variables into the RSI30/70 strategy, increasing its complexity and potentially altering the fundamental characteristics of its performance outcomes.


From today’s M15 chart, the entry at (#1) and the exit at (#2) are clearly defined. Following a brief pullback, Bitcoin resumed its strength, with the dip failing to be recognized as a valid low-risk entry signal under the RSI30/70 framework.

Revised count ...

Bitcoin’s retracement has extended beyond the 0.618 level, which is uncommon for a typical wave "/4" formation. Wave "/5" potentially targeting at 78.2K region.

I have only one reservation with the count. A 12-12345(3)-45 scenario is usually visious and the 4 retracement would be shallow.
On the daily chart I am lookisterng at a bear channel with price near the upper limits of the channel. If price clears 80k and we are not far the idea is wrong and should be scrapped. But if 73k fails then the idea is in play. Another thing to note is that this instrument is highly correlated to the stockmarket. So we are stock traders by proxy. In fact yesterday I traded bitcoin with half my traderview screen on the SP500 and the other half on BTC.

Your perspective is reasonable and remains in confluence with the higher time frame cycle count. That said, I still anticipate one more leg to the upside on the lower-degree structure to properly complete wave “C ”. Although the price target near 78.3K has technically been met, the internal structure does not yet appear fully developed.

revised count ...

In reality, the RSI 40/70 strategy (Long only bitcoin system) on its own offers a limited statistical edge, with a win probability of only around 45%–55%—a range that is effectively comparable to random market signals. However, this performance can be improved by approximately 10% through the simple application of a trend filter or by establishing a clear market bias. Aligning trades with the prevailing trend significantly enhances the quality of entries and overall consistency.

As for more advanced techniques such as candlestick interpretation or Elliott Wave analysis, these may contribute an additional 5% edge—but only when applied with a high degree of accuracy. In practice, inconsistent or incorrect application often leads to worse outcomes rather than improvements.

To further enhance the performance of this strategy, an entry technique known as scale-in mean reversion can be applied. This approach involves building positions progressively as price deviates from its equilibrium, allowing for improved average entry levels and reduced timing risk. When executed with discipline, this method can contribute an additional improvement of up to 5% in overall win probability, strengthening the robustness of the strategy within mean-reverting market conditions.

As a result, when these methods are applied collectively, the overall win probability can reasonably increase to an estimated range of 65%–75%. This is not merely theoretical—it can be validated through personal trading records by reviewing historical performance after consistently applying these techniques. Over time, such data provides a clearer and more objective measure of the strategy’s true effectiveness.


From the chart, the current price action shows clear selling pressure at points #3 and #4, which closely resembles the behavior previously seen on April 12–13 at #1 and #2.A key observation is that during the second phase (#2), the selling momentum began to fade, eventually giving way to a bullish move. This type of transition reflects a classic mean reversion effect, where price stabilizes after an imbalance and reverts toward a more neutral or higher level.

Given this context, we continue to hold a bullish bias on Bitcoin, with the expectation that the current structure may follow a similar path—where diminishing selling pressure could lead to a potential upside continuation, much like the earlier sequence at #1 and #2.

Alternatively, there is a possibility that this count has already completed if we interpret the structure as a WXY correction. This is supported by the chart, where both Fibonacci projections derived from (w)–(x)–(y) and the internal w–x–y subdivisions align closely with the projected target zone. This confluence strengthens the case that the current wave structure may have already reached completion.

If the w-x-y has completed the downwards is the way to go.
This instrument is as volatile as hell and hitting and recovering from 'minor' support now. We might not break the support till NY session
I am confident price can go down but who can really tell. You can only trade the markets as best as you can
I posted my thoughts on Zappa's forum I will copy the images and post them here:
https://www.forexfactory.com/attachm...l?d=1776637362

Based on the dataset, we can systematically quantify an optimal maximum intraday drawdown (MIDD) threshold and establish a disciplined framework for capital deployment and risk exposure. Using LLM-based simulations, assuming a 65% win rate and a 1.5 payoff ratio (parameters consistent with an average-performing trader applying the RSI 40/70 strategy) the table below presents the projected performance outcomes:


From the table above, it becomes evident how trading decisions should be structured—ultimately, everything hinges on the percentage of capital at risk per trade, as this single variable largely determines the shape and stability of the resulting equity curve.

The chart highlights two primary conditions for closing all positions: firstly, when the maximum intraday drawdown (MIDD) threshold is exceeded, and secondly, when an exit is confirmed by the indicator (point #3). Losses are an inevitable component of trading and cannot be eliminated. What ultimately defines long-term performance is the construction of the equity curve, which is driven by how effectively risk is sized and capital is committed in each trade.

The chart shows a possible short setup under a bearish bias.

yes I think so.

This agrees with my outlook for this instrument.
And if it is a wave c or a 3 it can be explosively bearish after this upmove is done.
I was monitoring the support line I drew yesterday and saw the bounce off support and closed my short.
I did not open a long so missed all the upmove.
We are partially risk on or at least in a 'consideration' mode.
Almost all the usual instrument have bitten loads into their gaps

Monday’s upward move in the market prompted a review of the higher time frame charts, raising the question of whether it is justified to adopt a contrarian view against the broader sentiment.

A closer examination of the weekly chart—particularly the behavior of the RSI—reveals a notable pattern. Historically, when the RSI drops below the 30 level and subsequently rebounds toward the 40 region on the weekly timeframe, Bitcoin tends to be transitioning into a broader bull market phase.

This pattern has repeated itself three times, with the exception of 2011, suggesting a consistent structural signal that may support a bullish outlook despite prevailing market doubts.


A further review of the daily chart adds another layer to the analysis. Toward the end of 2025, the price action from bar #1 to #5 formed a structure that closely resembles what we are currently observing between bar #8 and #12.However, the key distinction lies in what followed. In the previous instance, bar #6 printed a doji—signaling market indecision—followed by bar #7, which led to a clear sell-off. This sequence ultimately shifted the short-term direction of the market.


In contrast, if the current session continues to show strength without a comparable sell-off, it suggests that the market may not follow the same playbook as seen in late 2025. Instead, the present structure could indicate a period of consolidation, potentially acting as a base before the next upward move.

We will continue to observe this week’s price action carefully, allowing the market to reveal its intent before arriving at a more conclusive assessment.

In the short term, Bitcoin continues to exhibit a bearish count, reinforcing a downside bias in the current market outlook.

It appears that the 0.618 Fibonacci level at 76.6K is still holding. Given that the overall structure remains intact, I maintain a bearish bias on Bitcoin, expecting further downside continuation. The first downside target is projected at 72.3K, based on the 1.0 Fibonacci extension of the move that began on the 17th.