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BTCUSD: Elliott Wave and Technical Analysis | Charts – 19th September, 2018

Bitcoin continues to move mostly sideways, with a slight downwards bias.

Summary: A clear breach of a support line, which has seen all price action above it until this point, is a strong indication that Bitcoin is bearish. Now that a backtest about the support line is complete, price may be expected to continue to move downwards from this line.

At this time, Bitcoin may be in the early stages of a third wave down at four degrees.

The data used for this analysis now comes from Yahoo Finance BTC-USD.

Updates to this analysis are in bold.

Last analysis may be found here.

FIRST ELLIOTT WAVE COUNT

MONTHLY

Bitcoin Monthly 2018
Click chart to enlarge.

It is possible to see a completed five wave impulse upwards for Bitcoin.

I am unable to find reasonable Fibonacci ratios within this wave count. It appears that Bitcoin may not exhibit Fibonacci ratios very often between its waves, so this makes target calculation impossible. Classic technical analysis was used to identify a high in place on the 23rd of December, 2017.

What is very clear from this chart is that Bitcoin is a classic bubble. This looks like an even larger bubble than the Tulip Mania. The only thing about which I am certain is that this bubble will pop and Bitcoin will collapse.

Now that the Forever trend line is breached some confidence may be had that Bitcoin may be crashing.

WEEKLY

Bitcoin weekly 2018
Click chart to enlarge.

Bitcoin tends to behave like an extreme commodity: price moves upwards for about 2 – 4 weeks in a near vertical movement at the end of its rises. Following this vertical movement the resulting downwards movement is very deep (in percentage terms) and often very quick.

The next rise begins slowly with basing action over weeks or months, and then as the rise nears its end another vertical movement completes it. Also, there are volume spikes just before or at the end, which is another feature typical of commodity like behaviour.

This has happened now several times. The most notable instances are the rise up to the week ending 24th November, 2013, and the week ending 5th June, 2011. The following sharp drops were 94% and 93% respectively.

If this current drop continues like the last two examples, then a reasonable target may be about $1,390.94 or below.

DAILY

Bitcoin daily 2018
Click chart to enlarge.

If Bitcoin is in the early stages of a huge crash, then a five down structure should develop at the weekly chart level. This would still be incomplete.

A third wave down may now be beginning at five degrees. Bitcoin may be still winding up for a spectacular plummet in price. The strongest fall may come towards the end of any one or more of these third waves as Bitcoin exhibits commodity like behaviour. Commodities tend to have their strongest portion of impulses in the fifth waves.

The best fit channel has only weak technical significance.

The Forever trend line is not perfectly showing where price found support and has then found resistance for a typical back test. However, it is about where price found support and resistance. The breach and back test are highly significant.

My alternate bullish wave count was discarded because the Forever trend line is properly breached and now has a successful backtest.

I have again searched to find if a five down could be seen as complete. At this time, I cannot yet see either a complete impulse or a leading diagonal.

TECHNICAL ANALYSIS

Bitcoin daily 2018
Click chart to enlarge.

Volume is declining (at higher time frames); this market is falling mostly of its own weight. However, looking more closely, daily volume is stronger for downwards days than for upwards days.

The following can be noted when looking back at Bitcoin’s behaviour during its previous strong falls in price:

The 94% fall in price from June to November 2011 was characterised by:

– Three clearly separate instances of RSI reaching oversold on the daily chart, separated by bounces.

– ADX did not remain very extreme for very long at all on the daily chart.

– On Balance Volume exhibited weak single bullish divergence at the low.

The 93% fall in price from November 2013 to February 2014 was characterised by:

– RSI reached oversold and remained deeply oversold for three weeks; at the low there was only single weak bullish divergence with price.

– ADX remained very extreme for the last seven sessions to the low.

– At the low, On Balance Volume did not exhibit bullish divergence with price; it remained bearish and then exhibited further bearishness after the low as it continued to decline as price began to rise.

For the current fall in price, the current Elliott wave count expects the fall to be larger in terms of duration than the previous two noted here, and at least equivalent in terms of price movement in that a fall of over 90% is expected now. Currently, ADX is not yet extreme and RSI is not yet oversold. There is plenty of room for this downwards trend in Bitcoin to continue.

Watch On Balance Volume carefully over the next couple of weeks or so. If it breaks out of the current range before price does, then it may signal the breakout direction for price. Both price and On Balance Volume are currently range bound.

Published @ 05:25 a.m. EST.

BTCUSD Elliott Wave and Technical Analysis – 13th August, 2018

Bitcoin has moved sideways since last analysis.

Summary: A clear breach of a support line, which has seen all price action above it until this point, is a strong indication that Bitcoin is bearish. Now that a backtest about the support line is complete, price may be expected to continue to move downwards from this line.

At this time, Bitcoin may be in the early stages of a third wave down at four degrees.

The data used for this analysis now comes from Yahoo Finance BTC-USD.

Updates to this analysis are in bold.

Last analysis may be found here.

FIRST ELLIOTT WAVE COUNT

MONTHLY

Bitcoin Monthly 2018
Click chart to enlarge.

It is possible to see a completed five wave impulse upwards for Bitcoin.

I am unable to find reasonable Fibonacci ratios within this wave count. It appears that Bitcoin may not exhibit Fibonacci ratios very often between its waves, so this makes target calculation impossible. Classic technical analysis was used to identify a high in place on the 23rd of December, 2017.

What is very clear from this chart is that Bitcoin is a classic bubble. This looks like an even larger bubble than the Tulip Mania. The only thing about which I am certain is that this bubble will pop and Bitcoin will collapse.

Now that the Forever trend line is breached some confidence may be had that Bitcoin may be crashing.

WEEKLY

Bitcoin weekly 2018
Click chart to enlarge.

Bitcoin tends to behave like an extreme commodity: price moves upwards for about 2 – 4 weeks in a near vertical movement at the end of its rises. Following this vertical movement the resulting downwards movement is very deep (in percentage terms) and often very quick.

The next rise begins slowly with basing action over weeks or months, and then as the rise nears its end another vertical movement completes it. Also, there are volume spikes just before or at the end, which is another feature typical of commodity like behaviour.

This has happened now several times. The most notable instances are the rise up to the week ending 24th November, 2013, and the week ending 5th June, 2011. The following sharp drops were 94% and 93% respectively.

If this current drop continues like the last two examples, then a reasonable target may be about $1,390.94 or below.

DAILY

Bitcoin daily 2018
Click chart to enlarge.

If Bitcoin is in the early stages of a huge crash, then a five down structure should develop at the weekly chart level. This would still be incomplete.

A third wave down may now be beginning at four degrees. Bitcoin may be still winding up for a spectacular plummet in price. The strongest fall may come towards the end of any one or more of these third waves as Bitcoin exhibits commodity like behaviour. Commodities tend to have their strongest portion of impulses in the fifth waves.

The best fit channel was not perfectly showing where bounces found resistance, so it has been adjusted. This channel has only weak technical significance.

The Forever trend line is not perfectly showing where price found support and has then found resistance for a typical back test. However, it is about where price found support and resistance. The breach and back test are highly significant.

My alternate bullish wave count is now discarded because the Forever trend line is properly breached and now has a successful backtest.

TECHNICAL ANALYSIS

Bitcoin daily 2018
Click chart to enlarge.

Volume is declining (at higher time frames); this market is falling mostly of its own weight. However, looking more closely, daily volume is stronger for downwards days than for upwards days.

The following can be noted when looking back at Bitcoin’s behaviour during its previous strong falls in price:

The 94% fall in price from June to November 2011 was characterised by:

– Three clearly separate instances of RSI reaching oversold on the daily chart, separated by bounces.

– ADX did not remain very extreme for very long at all on the daily chart.

– On Balance Volume exhibited weak single bullish divergence at the low.

The 93% fall in price from November 2013 to February 2014 was characterised by:

– RSI reached oversold and remained deeply oversold for three weeks; at the low there was only single weak bullish divergence with price.

– ADX remained very extreme for the last seven sessions to the low.

– At the low, On Balance Volume did not exhibit bullish divergence with price; it remained bearish and then exhibited further bearishness after the low as it continued to decline as price began to rise.

For the current fall in price, the current Elliott wave count expects the fall to be larger in terms of duration than the previous two noted here, and at least equivalent in terms of price movement in that a fall of over 90% is expected now. Currently, ADX is not yet extreme and RSI is not yet oversold. There is plenty of room for this downwards trend in Bitcoin to continue.

Published @ 11:11 p.m. EST.

BTCUSD Elliott Wave Analysis – 11th May, 2017

Bitcoin has recently seen strong upwards movement along with increasing news coverage. A blowoff top may again be approaching. Will this herald just another interruption to Bitcoin’s upwards trend? Or could it be the end of this meteoric rise and the beginning of a larger fall?

All charts are on a semi-log scale.

FORTNIGHTLY CHART

Bitcoin 2 weekly 2017
Click chart to enlarge.

The data for this wave count begins from June 2010.

What looks like a five wave impulse may be completing. With no Fibonacci ratio between cycle waves III and I, it may be more likely that cycle wave V will exhibit a Fibonacci ratio to either of III or I.

This movement does not fit well at all into a channel.

I have taken some time to look at the waves which now in hindsight are obviously complete, particularly the waves within cycle wave III. I have noticed some tendencies of this market:

– Bitcoin behaves like an extreme commodity. Its impulses have a curved look with slower second waves, quick fourth waves, and strong sharp fifth wave extensions. This tendency shows up in bullish and bearish waves.

– Third waves are much longer than first waves, and fifth waves are longer still. Again, this is an extreme version of typical commodity behaviour.

– The middle of its third waves may exhibit Fibonacci ratios within them, but overall it does not regularly exhibit good Fibonacci ratios. This would make target calculation particularly difficult.

– Candlestick reversal patterns are common at the end of Bitcoin’s strong fifth waves. These are engulfing patterns or star patterns with very long wicks on the final candlestick.

– Early second wave corrections are extremely deep, close to 0.8 and often deeper than 0.9 the depth of the prior first wave.

WEEKLY CHART

Bitcoin weekly 2017
Click chart to enlarge.

The weekly chart looks at the possible structure of cycle wave V, the final fifth wave.

There are multiple ways to label this upwards movement. This is only one.

DAILY CHART

Bitcoin daily 2017
Click chart to enlarge.

This daily chart looks at the final fifth wave of primary wave 5. Again, there are multiple ways to label this movement and this is only one of them.

What cannot yet be seen is a candlestick reversal pattern at the high.

A target is calculated at two degrees, which is a zone of only 32 bits. While this target looks reasonable, it must be acknowledged that given observed behaviour of this market it may well be too low if it is wrong.

The bigger picture expects that Bitcoin may soon end its meteoric rise and turn to begin a very sharp and deep fall. When cycle wave V ends, it would complete one impulse up. Given this market’s tendency to very deep early second wave corrections, the resulting fall may be as deep as 0.9 of the prior rise.

I will be following this market daily now to pinpoint when may be best to sell Bitcoins.

Thereafter, I will follow the big second wave correction to its completion in order to pinpoint when will be the best time to buy Bitcoins again.

This analysis is published @ 07:16 p.m. EST.

[Note: Analysis is public today for promotional purposes. Member comments and discussion will remain private.]

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