—— SIMPLE SUMMARY ———
BTC has rallied roughly 9% from the reaction zone I discussed in my previous update.
The correction ended faster than I expected, so I was only able to build around 20% of my usual position size.
However, I also accumulated spot BTC and altcoins, so the overall result has still been satisfactory.
I have now taken profit on approximately 50% of the position and am managing the remaining exposure.
For traders who do not use Elliott Wave, my current approach can be simplified to this:
• I still consider the broader trend bullish
• I do not plan to open new longs inside the red zone
• I plan to take additional profits on existing longs
• I will keep part of the long position in case the rally extends
• I will not short simply because price enters the red zone
The red zone is therefore not an automatic short area.
It is primarily a risk-management area for my longs and a zone where I will begin looking for evidence of a potential short setup.
——— CURRENT STRUCTURE: WAVE 5 ———
I currently interpret the market as being inside the final Wave 5 of the larger impulse.
There are three main structures I am considering:
1. Green — Regular impulse
2. White — Ending Diagonal
3. Blue — Extended Wave 5
At the moment, I am most interested in the Ending Diagonal scenario.
However, all three remain possible, which is why I do not want to become overly aggressive on the short side while the market remains in an uptrend.
——— SCENARIO 1: REGULAR IMPULSE ———
The green structure represents a relatively standard completion of Wave 5.
If price completes the final bullish leg around the red zone, the larger five-wave impulse may also complete there.
In that case, the correction that follows could develop quickly.
I would not rule out a relatively fast decline toward the 76K area after the structure completes.
That potential downside is one reason I increasingly prefer profit protection over adding new long exposure as price moves higher.
However, this scenario alone is not enough for me to short early.
The other two structures remain important.
——— SCENARIO 2: ENDING DIAGONAL ———
The white structure is currently the scenario I am watching most closely.
An Ending Diagonal can develop during the final Wave 5 as price continues making higher highs while the underlying momentum gradually weakens.
The previous Wave 4 developed more as an ABC price correction rather than a long time-based consolidation.
Because of that structure, I am paying particular attention to the possibility of Wave 5 developing as an Ending Diagonal.
The additional confirmation I want to see is RSI bearish divergence.
If price continues making new highs while RSI forms lower highs, the divergence would provide another piece of evidence that bullish momentum is weakening.
An Ending Diagonal combined with repeated RSI bearish divergence would give me a much stronger reason to consider a short.
That is the type of setup I would rather wait for.
Simply reaching the red zone is not enough.
——— SCENARIO 3: EXTENDED WAVE 5 ———
The blue structure represents an extended Wave 5.
This is the primary risk for anyone trying to short too early.
If Wave 5 extends, price can continue rising much further than expected before the larger impulse finally completes.
That is why I do not want to close every long position inside the red zone.
I intend to take additional profit there, but I also want to maintain some long exposure in case the market chooses the extension scenario.
More importantly, this is why I do not want to make an aggressive short bet before the market gives me actual confirmation.
——— MY PLAN INSIDE THE RED ZONE ———
My approach is relatively simple.
1. No new longs
I already have positions from lower levels.
After a strong advance, I do not see a reason to chase new long exposure inside an area where the final bullish wave may be approaching completion.
2. Take additional profit
I have already realized approximately 50% of the position.
If price enters the red zone, I plan to continue protecting profits.
This does not mean I am calling the exact top.
It simply means that the risk/reward profile of holding the full original position becomes less attractive as Wave 5 matures.
3. Keep part of the long position
I do not plan to close everything.
The extended Wave 5 scenario remains possible, and if it develops, the upside could be significant.
4. Wait patiently for the short
The market is still in an uptrend.
For that reason, I want stronger evidence before trading against it.
The type of confirmation I am watching for includes:
• Ending Diagonal structure
• RSI bearish divergence
• Loss of bullish momentum
• A clear bearish shift in price structure
Only then would I become more interested in a short position.
——— WHY I AM NOT RUSHING THE SHORT ———
Scenario 1 could produce a relatively fast decline after Wave 5 completes.
If that happens, waiting may mean missing the exact top.
I am comfortable with that.
The alternative is entering short too early while Scenario 2 is still developing or, more importantly, while an extended Wave 5 begins.
The potential cost of being early can be much larger than the benefit of catching the exact high.
This is especially important because the broader market structure is still bullish.
I would rather miss the first part of a decline and enter with confirmation than aggressively fight an active uptrend without sufficient evidence.
——— CONCLUSION ———
BTC has rallied roughly 9% from the previous reaction zone.
I currently believe the market is progressing through the final Wave 5.
The three structures I am considering are:
1. Regular impulse
2. Ending Diagonal
3. Extended Wave 5
My primary focus is the Ending Diagonal scenario, particularly if it develops together with RSI bearish divergence.
Inside the red zone:
• I will not add new longs
• I will take additional profit
• I will keep part of the long exposure
• I will wait for a real bearish setup before entering short
The red zone is not an automatic short level.
It is the area where I transition from maximizing upside to protecting profits and watching carefully for evidence that the bullish structure is actually ending.
Profit-taking does not mean I am calling the top.
It means I am managing the risk of a profitable position.
The market is still in an uptrend, so I would rather wait for confirmation than fight that trend too early.
Response > prediction.
This is a market structure analysis and personal trading journal, not financial advice.
