Looking at the Bitcoin (BTC) short-term charts, it would be encouraging if the $3,861 held as support (Figure 1). That level is the 76 percent retracement of the recent up move that topped out at $4,000.

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If $3,861 holds as support in Bitcoin (BTC), the possibility exists that the intraday chart of Bitcoin (BTC) is forming an Elliot Wave structure known as a “series of ones and twos. (Figure 2)” Without going into a full Elliot tutorial, a series of up moves that get partially “retraced” can sometimes lead to a bigger up move.

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Realistically, the cryptoverse may be at the mercy of Nasdaq 100 (QQQ). The key pivot there is a big neckline at $156 (Figure 3). If QQQ can burst through $156, then it may mean conciliatory Fed statements combined with bearish hysteria in equities may create a strong reversal higher. If QQQ fails at $156, then stocks are at risk and crypto may be in limbo.  For more on scenarios like this see our recent strategy piece

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Bottom Line: Strategy is one thing. Trading is another. There is a bullish case for Bitcoin (BTC), but the ultimate litmus test is whether or not you can trade that theory or the failure of that theory. Join me in the Crypto.IQ trading room we lay out the tactical roadmap.