Tag Archives: elliott wave counts bitcoin

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 and Technical Analysis – 13th July, 2018

Last analysis presented a scenario that Bitcoin was most likely in the early stages of a collapse while price stayed below 13,031.04. This still remains the case today.

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. At this time, Bitcoin may be beginning a third wave down at five degrees; if it is, then it should start to exhibit a strong increase in downwards momentum.

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 will then be used to identify a high in place.

What is very clear from this chart is that Bitcoin is in 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.

What is uncertain is exactly when it will crash. For that question to be answered Elliott wave analysis may be helpful. 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 daily 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.

While price remains below the upper edge of the best fit channel, expect bounces to find resistance there. On the other side of the channel, the lower edge should be breached by the strength of one of the ends of any one of the third waves which are unfolding.

SECOND ELLIOTT WAVE COUNT

WEEKLY

Bitcoin weekly 2018
Click chart to enlarge.

It is also still just possible that the rise for Bitcoin is not over. The last blow off top may have only been the end of a third wave, so a still stronger fifth wave may be yet to come.

Primary wave 4 may not move into primary wave 1 price territory below 492.80, but this price point is far away for any usefulness. The Forever trend line is now very clearly breached by three full weekly candlesticks below and not touching it. This may be a relatively early indication that this bullish wave count may be wrong. The probability of it is reduced, so it should be discarded.

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.

Using ADX as a trend indicator, at this time it indicates a very extreme downwards trend, which can continue further. Bitcoin can sustain very extreme trends for very long periods of time.

Published @ 04:37 a.m. EST.

BTCUSD Elliott Wave and Technical Analysis – 15th February, 2018

Two scenarios for Bitcoin and a clear price point which differentiates the two ideas are presented in this analysis.

Summary: While price remains below 13,031.04 and below the Magee bear market trend line, the possibility that Bitcoin is in the early stages of collapse will remain. A new high above 13,031.04 by any amount at any time frame would be a bullish signal for Bitcoin. If that happens, then look out for another exponential rise to substantial new highs, which may only end after a minimum of 2 weeks vertical upwards movement on high volume.

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

FIRST ELLIOTT WAVE COUNT

2 WEEKLY

Bitcoin 2 weekly 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 will then be used to identify a high in place.

What is very clear from this chart is that Bitcoin is in 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.

What is uncertain is exactly when it will crash. For that question to be answered Elliott wave analysis may be helpful, and if the Forever trend line is breached, then reasonable confidence may be had that Bitcoin is 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 daily chart level. This would be incomplete.

A third wave cannot yet be seen as complete for intermediate wave (3). This wave count sees a series now of three overlapping first and second waves. If this wave count is correct, then Bitcoin may be winding up for a spectacular plummet in price in the next couple of weeks or so.

Minute wave ii may not move beyond the start of minute wave i above 13,031.04.

SECOND ELLIOTT WAVE COUNT

WEEKLY

Bitcoin weekly 2018
Click chart to enlarge.

It is also possible that the rise for Bitcoin is not over. The last blow off top may have only been the end of a third wave, so a still stronger fifth wave may be yet to come.

Primary wave 4 may not move into primary wave 1 price territory below 492.80, but this price point is far away for any usefulness though. The Forever trend line on the 2 weekly chart would see this wave count discarded long before price invalidated it.

DAILY

Bitcoin daily 2018
Click chart to enlarge.

If the last fall in price for Bitcoin is just another relatively short lived pullback, then it must subdivide as an Elliott wave corrective structure. This movement will fit nicely as a double zigzag, which may now be complete.

Because triple zigzags are very rare structures (I have only ever seen 2 or 3 in my now 10 years of daily Elliott wave analysis), it is extremely likely that the correction is complete when a double zigzag is complete.

Within primary wave 5, no second wave correction may make a new low below the start of its first wave below 5,968.36.

A new high above 13,031.04 would see confidence in this wave count. If that happens, then my expectation would be for Bitcoin to see another exponential rise, only ending after a minimum of 2 weeks vertical movement on very high volume.

TECHNICAL ANALYSIS

Bitcoin daily 2018
Click chart to enlarge.

If price breaks above the Magee bear market trend line, then assume Bitcoin would very likely make new highs.

Not all bullish long lower wicks appear at swing lows, but they are a persistent feature at lows.

When a bullish long lower wick is accompanied by a volume spike, then the probability that a swing low is in is very high.

Currently, volume supports downwards movement much more so than upwards. The volume profile is bearish. This supports the first Elliott wave count.

Published @ 05:33 p.m. EST.

BTCUSD Elliott Wave and Technical Analysis – 23rd December, 2017

Has the Bitcoin bubble burst? I look at price and volume, along with trend lines, to answer this question.

Last analysis stated: “Instead of trying to figure out where this bubble may go, I’ll focus on figuring out when it may have popped. A strong bearish candlestick pattern at the weekly chart level and a trend channel or trend line breach will be looked for.”

There is a completed weekly candlestick at the end of today’s session, and it is a strong bearish engulfing candlestick pattern.

But the channel is not yet breached.

Volume supports the idea of a high in place, but the bottom line is that there is substantial risk to any short position while price remains within the channel.

Look now for a bounce to not make a new all time high, which should exhibit weakness in volume. Then look for the channel breach.

Manage risk diligently.

ELLIOTT WAVE CHARTS

2 WEEKLY

Bitcoin 2 weekly 2017
Click chart to enlarge.

WEEKLY

Bitcoin weekly 2017
Click chart to enlarge.

DAILY

Bitcoin daily 2017
Click chart to enlarge.

VOLUME ANALYSIS

Bitcoin volume 2017
Click chart to enlarge. Chart courtesy of Bitcoinity.org.

A huge drop in volume suggests exhaustion.

Published @ 02:22 a.m. EST.

BTCUSD Elliott Wave and Technical Analysis – 13th November, 2017

Last analysis of Bitcoin expected more upwards movement, which is what has happened. Last published Bitcoin analysis is here.

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.

The “forever” trend line should be used to indicate when the top may be in for BitCoin. If this line is breached, the probability of a crash will increase (it will not be certain, only highly likely).

Notice that Bitcoin completed strong blowoff tops at the end of both cycle waves I and III. At the end of cycle wave I, the rise for the last eight weeks was vertical. Again, at the end of cycle wave III, the rise for the last eight weeks was vertical (remember, this is a two weekly chart).

Notice that at this time the current rise is not vertical. Current price action looks more like the early stages of cycle waves I and III than their ends.

If my targets are wrong, they may be woefully inadequate. I would not recommend using these targets for exit points for any Bitcoin purchases.

WEEKLY CHART

Bitcoin weekly 2017
Click chart to enlarge.

Last analysis of Bitcoin expected more upwards movement, which is so far what is happening.

Primary wave 3 may be complete as labelled. Primary wave 5 may turn out to be only even in length with primary wave 3, but it may well be much longer than that. Within cycle wave III (not shown on this chart, see the two weekly chart above), primary wave 5 was just 26.45 short of 4.236 the length of primary wave 3.

Here, if primary wave 5 were to exhibit the same Fibonacci ratio to primary wave 3, the target would be at 23,626. While this target may seem extreme, it is possible.

TECHNICAL ANALYSIS

Bitcoin daily 2017
Click chart to enlarge.

At major highs, Bitcoin often exhibits strong candlestick reversal patterns. That is not the case at the last high.

Single divergence with price and RSI at the last high signalled a likely pullback. The question right now is: is this pullback complete?

At the end of pullbacks, Bitcoin does not always see RSI reach oversold. So that may not be useful in timing an entry. There are usually strong candlestick reversal patterns though, and there is one here. The last two days have long lower wicks and the last daily candlestick is very bullish. It is not correctly an engulfing pattern as the open gaps higher, but the close is well above the close of the prior day, which is very bullish.

The risk here is that the pullback is not yet over. Some patience may be required. A smaller position may be entered here, and most powder kept dry for a larger position should Bitcoin move lower.

Published @ 05:45 p.m. EST.

BTCUSD Elliott Wave Analysis – 5th September, 2017

Last published Bitcoin analysis had inadequate targets.

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.

The “forever” trend line should be used to indicate when the top may be in for BitCoin. If this line is breached, the probability of a crash will increase (it will not be certain, only highly likely).

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.

It looks like BitCoin may be due for a primary degree correction. Given that its fourth waves tend to be quicker than its counterpart second waves, primary wave 4 may only be a Fibonacci 13 or 21 weeks.

However, it may be longer lasting if it subdivides as a triangle, possibly even up to a Fibonacci 55 weeks.

If this analysis is wrong, it may be in expecting primary wave 4 to reach down to the 0.236 Fibonacci ratio. Primary wave 4 may not be that deep and may end mid way within the channel.

This analysis is published @ 03:33 a.m. EST.

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

Continue reading BTCUSD Elliott Wave Analysis – 5th September, 2017

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.]

Continue reading BTCUSD Elliott Wave Analysis – 11th May, 2017