Last analysis on the 27th of June expected a continuation of downwards movement for Bitcoin.
Focus of analysis from this point onwards is on identifying a potential buying opportunity for Bitcoin.
This analysis is available for Elliott Wave Gold and Elliott Wave Stock Market members only.
Continue reading BTCUSD: Elliott Wave and Technical Analysis | Charts – July 10, 2019
Last analysis on the 17th of June expected explosive upwards movement to then be followed by a sharp reversal, which is exactly what has happened for Bitcoin.
Summary: A deep pullback is now expected to end at the 0.618 Fibonacci ratio, at 7,240. But Bitcoin’s price history suggests it may be deeper, so more likely somewhere between 7,006 to 3,809. The pullback may end in about 17 weeks.
At its end, this deep pullback may offer a good buying opportunity for Bitcoin.
This will be the last publicly available Bitcoin analysis for a while. While looking for a buying opportunity, Elliott Wave Gold and Elliott Wave Stock Market members will be given preference.
The data used for this analysis comes from Yahoo Finance BTC-USD.
All charts are on a semi-log scale.
MAIN ELLIOTT WAVE COUNT
MONTHLY
Click chart to enlarge.
The degree of labelling within this analysis is today moved down one degree. This makes no difference to targets, invalidation points or expectations of direction for price.
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 December 23, 2017.
What is very clear from this chart is that Bitcoin forms classic bubbles. It has done so now several times and may now be doing so again. This looks like an even larger bubble than the Tulip Mania. So far each bubble has popped and Bitcoin has collapsed, to then thereafter form a new bubble. Each bubble is larger than the one prior; so if another Bitcoin bubble is forming, it may be expected to take price substantially above the all time high.
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.
The last instance was the rise up to the last all time high for Bitcoin at 19,870.62 on the 17th of December 2017. The drop thereafter may now be considered as highly likely to be complete. If the drop is complete, it was only an 84% drop.
WEEKLY
Click chart to enlarge.
Cycle wave II may be a complete zigzag.
Cycle wave III must move above the end of cycle wave I at 19,870.62. It must move far enough above this point to allow room for cycle wave IV to unfold and remain above cycle wave I price territory.
Cycle wave I lasted 7.2 years and cycle wave II may have been over within just under one year. It would be reasonable to expect cycle wave III to last about 7 years, possibly a Fibonacci 8 or 13 years.
Cycle wave III must unfold as a simple five wave impulse, and within this impulse there should be two large corrections for primary waves 2 and 4. So far primary wave 1 may be complete. Primary wave 2 may now unfold as a three wave structure downwards to possibly last about 17 weeks in duration if it is 0.618 the duration of primary wave 1.
The range of corrections for intermediate, primary and cycle degree corrections for Bitcoin is from 0.64 to 0.94. This gives a potential range for the low of primary wave 2 from 7,006 to 3,809.
DAILY
Click chart to enlarge.
Bitcoin typically forms curved first wave impulses with time consuming and deep second wave corrections, then accelerates through to the end of its third waves, has brief and more shallow fourth wave corrections, and then finishes with explosive fifth waves. This is an extreme behaviour most typically seen in commodities.
This pattern has again been repeated and is seen clearly on an arithmetic chart for primary wave 1.
Intermediate wave (2) was deep and time consuming. It was 0.83 the length of intermediate wave (1) and lasted 44 days. The slope of the wave increases as momentum increases up to the end of intermediate wave (3), and then intermediate wave (4) is more shallow at 0.15 the length of intermediate wave (3) (at its terminus, the deepest portion for minor wave A was 0.33 of intermediate wave (3), which is still shallow) and lasted 27 days.
Thereafter, momentum and the slope shows a further increase to end in near vertical movement. This has now been followed by a very sharp decline.
Primary wave 2 may be expected to most likely subdivide as a zigzag. It may last about 17 weeks if it is 0.618 the duration of primary wave 2, and it may be a very deep correction. Focus of this analysis will now be on identifying the end of primary wave 2 as a potential buying opportunity.
After last analysis, the alternate wave count was discarded based upon a very low probability. To see the logic behind this decision please refer to last analysis here.
TECHNICAL ANALYSIS
WEEKLY
Click chart to enlarge.
The following characteristics can be noted at the end of prior major highs for Bitcoin:
The first sharp rise to the week beginning 5th June 2011: near vertical movement for several weeks, a sharp volume spike for a blow off top on the final week, and no candlestick reversal pattern on the weekly chart but an Evening Doji Star on the daily chart. The following correction was 0.94.
The next sharp rise to the week beginning 7th April 2013: near vertical movement for three weeks, a sharp volume spike on the final week that closed red and formed a Bearish Engulfing pattern on the weekly chart, a Bearish Engulfing pattern on the daily chart, ADX remained very extreme for most of the rise, and single week bearish divergence between price and RSI at the end. The following correction was 0.82.
The next sharp rise to the week beginning 24th November 2013: vertical movement for four weeks, a strong rise in volume until the last week (which saw volume fall), a Bearish Engulfing pattern on the weekly chart, an Evening Doji Star on the daily chart (the third candlestick of which had strong support from volume), ADX reached very extreme for many days, and RSI reached extreme overbought and there exhibited single bearish divergence. The following correction was 0.93.
The last sharp rise to the all time high at 19,870.62 on the 17th of December 2018: vertical movement for three weeks, a strong increase in volume up to the last week (which saw a fall in volume), a Bearish Engulfing pattern on the weekly chart that had support from volume; on the daily chart, ADX reached very extreme for a coupe of weeks or so, RSI reached overbought and there exhibited single bearish divergence, and early downwards movement from the high had support from volume. The following correction was 0.84.
Some conclusions may be drawn about how to identify a major high in Bitcoin:
– Look for vertical movement on the weekly chart for at least two weeks, and possibly up to several (although when it is more than three the movement may be interspaced with a small pause).
– Look for either a sharp volume spike for a blow off top, or a strong increase in volume then followed by a single week of lighter volume at the possible high.
– A bearish candlestick reversal pattern has been seen so far at every major high for Bitcoin, so an absence of any candlestick reversal pattern at a potential high should be viewed very suspiciously.
– ADX is of no use as it may remain very extreme for long periods of time.
– RSI may also remain very extreme for long periods of time and may not exhibit any divergence, but it may add a little confidence in the high if it does exhibit bearish divergence in conjunction with other indicators being bearish.
The last vertical rise now exhibits enough of the points looked for to have some confidence that Bitcoin may have found an interim top: vertical movement for three weeks, a volume spike on the last week, and a bearish candlestick reversal pattern that may be developing (although this week still has the Friday to Sunday sessions to complete).
DAILY
Click chart to enlarge.
It was noted in last analysis that bearish divergence between price and RSI can simply disappear, and this is what happened in mid June.
Vertical price movement has ended with a sharp volume spike on the daily chart. There is now a very strong bearish candlestick reversal pattern complete at the daily chart level.
Support levels are noted as possible lows for the next expected deep pullback.
Published @ 06:00 p.m. EST.
—
Careful risk management protects your trading account(s).
Follow my two Golden Rules:
1. Always trade with stops.
2. Risk only 1-5% of equity on any one trade.
—
New updates to this analysis are in bold.
Last analysis on the 16th of May expected a relatively brief and shallow fourth wave correction to be followed by possibly explosive upwards movement for a fifth wave.
Summary: For the short to mid term, look out for an explosive upwards movement. When 1-3 weeks of vertical movement are seen with some decline in volume on the last week, then look out for a sharp turn and a deep correction. If bearish divergence between price and RSI persists, then have more confidence in a reversal.
The deep correction to come may be anywhere from about 0.65 to 0.95 of the first wave up (which began at 3,169.53 on 15th December 2018). At its end, it may offer an excellent buying opportunity for Bitcoin.
The data used for this analysis comes from Yahoo Finance BTC-USD.
All charts are on a semi-log scale.
MAIN ELLIOTT WAVE COUNT
MONTHLY
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 December 23, 2017.
What is very clear from this chart is that Bitcoin forms classic bubbles. It has done so now several times and may now be doing so again. This looks like an even larger bubble than the Tulip Mania. So far each bubble has popped and Bitcoin has collapsed, to then thereafter form a new bubble. Each bubble is larger than the one prior; so if another Bitcoin bubble is forming, it may be expected to take price substantially above the all time high.
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.
The last instance was the rise up to the last all time high for Bitcoin at 19,870.62 on the 17th of December 2017. The drop thereafter may now be considered as highly likely to be complete. If the drop is complete, it was only an 84% drop.
WEEKLY
Click chart to enlarge.
Super Cycle wave (II) may be a complete zigzag.
Super Cycle wave (III) must move above the end of Super Cycle wave (I) at 19,870.62. It must move far enough above this point to allow room for Super Cycle wave (IV) to unfold and remain above Super Cycle wave (I) price territory.
Super Cycle wave (I) lasted 7.2 years and Super Cycle wave (II) may have been over within just under one year. It would be reasonable to expect Super Cycle wave (III) to last well over 7 years, possibly a Fibonacci 8 or 13 years.
Super Cycle wave (III) must unfold as a simple five wave impulse, and within this impulse there should be two large corrections for cycle waves II and IV. So far cycle wave I may be incomplete. When cycle wave I may be complete, then cycle wave II may offer a good entry to purchase Bitcoin at a very good price. Cycle wave II may correct to about 0.80 to 0.95 of cycle wave I.
DAILY
Click chart to enlarge.
Bitcoin typically forms curved first wave impulses with time consuming and deep second wave corrections, then accelerates through to the end of its third waves, has brief and more shallow fourth wave corrections, and then finishes with explosive fifth waves. This is an extreme behaviour most typically seen in commodities.
This wave count now sees primary waves 3 and 4 complete. There is alternation between a deep 0.83 double zigzag of primary wave 2 and a shallow 0.15 running contracting triangle of primary wave 4. Primary wave 4 is typically more brief than primary wave 2: 44 days to 26 days.
Primary wave 5 may be expected to be explosive. This would be typical behaviour for this market.
Atypically, there is a Fibonacci ratio between primary waves 3 and 1. No Fibonacci ratio between primary wave 5 and either of primary waves 3 or 1 should be expected.
Within primary wave 5, no second wave correction may move beyond its start below 7,533.53.
ALTERNATE WAVE COUNT
WEEKLY
Click chart to enlarge.
This wave count is identical to the main wave count up to the all time high for Bitcoin. Thereafter, it moves the degree of labelling within Super Cycle wave (II) all down one degree. It is possible that Super Cycle wave (II) may not be complete and may continue lower as a double zigzag. Double zigzags are fairly common Elliott wave corrective structures.
Within the double zigzag, cycle wave x may now be complete. Cycle wave y may begin.
The purpose of a second zigzag in a double is to deepen the correction when the first zigzag does not move price deep enough. To achieve this purpose cycle wave y may be expected to move reasonably below the end of cycle wave w at 3,169.53.
Within multiples, there is no rule stating a limit for X waves. There can be no Elliott wave rule to apply to cycle wave x to determine when this wave count would be invalidated.
DAILY
Click chart to enlarge.
Cycle wave x must subdivide as a corrective structure and would most likely be a zigzag. It will not fit as a triangle, flat or combination, and so it is labelled as a zigzag.
This wave count now has a very serious problem with behaviour which does not fit this market. For cycle wave x to be counted as a zigzag, there is now gross disproportion within primary wave C between minor waves 2 and 4. Minor wave 4 is much more time consuming at 24 sessions to minor wave 2 at only 2 sessions. This market typically exhibits disproportionate fourth and second waves, but with the fourth wave more brief than the second.
This wave count will now be discarded at this time based upon exceptionally low probability. This adds a little confidence to the main wave count and the idea that Bitcoin may be forming a new bubble.
TECHNICAL ANALYSIS
WEEKLY
Click chart to enlarge.
The following characteristics can be noted at the end of prior major highs for Bitcoin:
The first sharp rise to the week beginning 5th June 2011: near vertical movement for several weeks, a sharp volume spike for a blow off top on the final week, and no candlestick reversal pattern on the weekly chart but an Evening Doji Star on the daily chart. The following correction was 0.94.
The next sharp rise to the week beginning 7th April 2013: near vertical movement for three weeks, a sharp volume spike on the final week that closed red and formed a Bearish Engulfing pattern on the weekly chart, a Bearish Engulfing pattern on the daily chart, ADX remained very extreme for most of the rise, and single week bearish divergence between price and RSI at the end. The following correction was 0.82.
The next sharp rise to the week beginning 24th November 2013: vertical movement for four weeks, a strong rise in volume until the last week (which saw volume fall), a Bearish Engulfing pattern on the weekly chart, an Evening Doji Star on the daily chart (the third candlestick of which had strong support from volume), ADX reached very extreme for many days, and RSI reached extreme overbought and there exhibited single bearish divergence. The following correction was 0.93.
The last sharp rise to the all time high at 19,870.62 on the 17th of December 2018: vertical movement for three weeks, a strong increase in volume up to the last week (which saw a fall in volume), a Bearish Engulfing pattern on the weekly chart that had support from volume; on the daily chart, ADX reached very extreme for a coupe of weeks or so, RSI reached overbought and there exhibited single bearish divergence, and early downwards movement from the high had support from volume. The following correction was 0.84.
Some conclusions may be drawn about how to identify a major high in Bitcoin:
– Look for vertical movement on the weekly chart for at least two weeks, and possibly up to several (although when it is more than three the movement may be interspaced with a small pause).
– Look for either a sharp volume spike for a blow off top, or a strong increase in volume then followed by a single week of lighter volume at the possible high.
– A bearish candlestick reversal pattern has been seen so far at every major high for Bitcoin, so an absence of any candlestick reversal pattern at a potential high should be viewed very suspiciously.
– ADX is of no use as it may remain very extreme for long periods of time.
– RSI may also remain very extreme for long periods of time and may not exhibit any divergence, but it may add a little confidence in the high if it does exhibit bearish divergence in conjunction with other indicators being bearish.
The last vertical rise in price up to the week beginning 26th May 2019 has been interspaced by a brief correction and now price is rising again. Look now for a short 2-3 weeks of vertical rise. If bearish divergence between price and RSI persists, then be alert for a sharp reversal and a large fall in price after the expected vertical rise.
There is a cluster of resistance above about 9,970 to 11,800.
DAILY
Click chart to enlarge.
A support line is drawn for price. While price remains above this line, assume the trend remains upwards.
Bearish divergence between price and RSI is a strong warning that the current rise in price may end sooner rather than later. However, this divergence on its own is not a signal and sometimes can simply disappear.
Published @ 06:54 p.m. EST.
—
Careful risk management protects your trading account(s).
Follow my two Golden Rules:
1. Always trade with stops.
2. Risk only 1-5% of equity on any one trade.
—
New updates to this analysis are in bold.
Last analysis on the 8th of April identified a clear price point at 7,234.83 to differentiate two Elliott wave counts. A new high above 7,234.83 on the 10th of May has switched the balance of probability towards another bubble forming for Bitcoin, which would still be in its relatively early stages.
The focus of this analysis will be on identifying a correction for an entry to purchase Bitcoin at a good price.
Continue reading BTCUSD: Elliott Wave and Technical Analysis | Charts – May 16, 2019
Last analysis on the 14th of March expected a downwards breakout from a consolidation, but this is not what has happened. Price broke above identified resistance on the 1st of April with support from volume.
Summary: More upwards movement is expected for the short to mid term. The question is whether this is a counter trend bounce within an ongoing bear market or the beginning of a new bull market.
It would be safest to assume that the bear market will continue while Bitcoin remains below 7,234.83. The final target is about 1,924, but it may be much lower than this; it is possible this bear market may see the end of Bitcoin.
A new high above 7,234.83 would indicate Bitcoin may be forming a new bubble to take price substantially above 19,870.
The data used for this analysis now comes from Yahoo Finance BTC-USD.
Updates to this analysis are in bold.
At this stage, it remains likely the the collapse of Bitcoin is incomplete. The main Elliott wave count outlines a continued collapse.
Now it is also possible that Bitcoin has found a new low and may be forming a new bubble. The alternate Elliott wave count outlines this idea.
MAIN ELLIOTT WAVE COUNT
MONTHLY
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 December 23, 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.
Confidence that Bitcoin was most likely crashing started since the Forever trend line was breached in June 2018.
WEEKLY
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.
The last instance was the rise up to the last all time high for Bitcoin at 19,870.62 on the 17th of December 2017.
If this current drop continues like the first two examples, then a reasonable target may be about $1,390.94 or below.
Super Cycle wave (II) would most likely be a zigzag, but it may also be a flat, combination or triangle; a zigzag would subdivide 5-3-5.
It is possible that cycle waves a and b may be complete within the expected zigzag of Super Cycle wave (II). Cycle wave a will fit as a leading contracting diagonal, and cycle wave b fits well as a running contracting triangle.
The target calculated expects cycle wave c to exhibit a Fibonacci ratio to cycle wave a. Bitcoin rarely exhibits Fibonacci ratios, so this target does not have a good probability. If this target is wrong, it may not be low enough.
Another frustrating aspect of Bitcoin is it does not fit within Elliott channels. Because it begins movements slowly and ends them quickly, it forms curved waves which breach channels early only to continue to new highs or lows. The channel on prior analysis is removed because it may not show where the current bounce finds resistance.
DAILY
Click chart to enlarge.
Cycle wave c must subdivide as a five wave motive sturucture, most likely an impulse. Within cycle wave c, primary wave 1 may be complete.
Primary wave 2 is now relabelled as an incomplete zigzag. Intermediate wave (B) may be a complete regular contracting triangle. Intermediate wave (C) may be an incomplete impulse.
Primary wave 2 may not move beyond the start of primary wave 1 above 7,234.83.
ALTERNATE WAVE COUNT
WEEKLY
Click chart to enlarge.
With an increase in upwards momentum and a breach of the channel containing prior downwards movement, it is time to now more seriously consider this alternate.
It is also again possible that Bitcoin may have found a low and may be in the early stages of a new bull market.
This wave count expects that the crash in price for Bitcoin was only 84% of value from the all time high. While this is possible, it would not follow the more common pattern of Bitcoin to crash over 90% in value. This must still reduce the probability of this wave count.
Within super cycle wave (III), no second wave correction may move beyond the start of its first wave below 3,169.53.
DAILY
Click chart to enlarge.
A new bull market (to form a new bubble) may have begun with a series of overlapping first and second waves.
A third wave now at five degrees may be about to unfold higher.
Typical of commodities, Bitcoin exhibits swift and strong fifth waves. This tendency is especially prevalent for fifth waves to end Bitcoin’s third wave impulses. Any one or more of subminuette wave v, minuette wave (v), minute wave v, minor wave 5, intermediate wave (5) or primary wave 5 may be very swift and strong. Look out for blow off tops ahead, to be relieved by small consolidations.
Within this current impulse, intermediate wave (4) may not move into intermediate wave (1) price territory below 4,221.62.
TECHNICAL ANALYSIS
Click chart to enlarge.
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.
So far at the lowest low from the all time high Bitcoin has only retraced 84%. While this is deep, its corrections are usually deeper than this.
At major highs, Bitcoin usually exhibits near vertical upwards movement for about two weeks which ends with strong support from volume. Thereafter, major highs are usually indicated by a bearish candlestick reversal pattern on the daily and / or weekly chart. The current upwards movement has not yet exhibited vertical movement for long enough and there is currently no candlestick reversal pattern on either the daily or weekly chart.
At this stage, it would be reasonable to expect Bitcoin to continue to move higher, at least for the short to mid term.
Published @ 09:00 p.m. EST.
Last analysis on the 7th of February advised that a sideways consolidation was expected to continue. Price remains range bound.
Summary: For the short term, the consolidation may end soon. The next move for Bitcoin is expected to be very strong with a downwards breakout, ending reasonably below 3,169.53. Only a new high above 7,234.83 would change this view.
It would be safest to assume that the bear market will continue while Bitcoin remains below 7,234.83. The final target is about 1,924, but it may be much lower than this; it is possible this bear market may see the end of Bitcoin.
The data used for this analysis now comes from Yahoo Finance BTC-USD.
Updates to this analysis are in bold.
MAIN ELLIOTT WAVE COUNT
MONTHLY
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 December 23, 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.
Confidence that Bitcoin was most likely crashing started since the Forever trend line was breached in June 2018.
WEEKLY
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.
Super Cycle wave (II) would most likely be a zigzag, but it may also be a flat, combination or triangle; a zigzag would subdivide 5-3-5.
It is possible that cycle waves a and b may be complete within the expected zigzag of Super Cycle wave (II). Cycle wave a will fit as a leading contracting diagonal, and cycle wave b fits well as a running contracting triangle.
The target calculated expects cycle wave c to exhibit a Fibonacci ratio to cycle wave a. Bitcoin rarely exhibits Fibonacci ratios, so this target does not have a good probability. If this target is wrong, it may not be low enough.
An Elliott channel is added to downwards movement. Upwards bounces may find resistance about the upper edge.
DAILY
Click chart to enlarge.
Cycle wave c must subdivide as a five wave motive sturucture, most likely an impulse. Within cycle wave c, primary wave 1 may be complete.
Primary wave 2 may now be a complete double combination: zigzag – X – flat. Primary wave 2 has so far remained within the teal Elliott channel, which is copied over from the weekly chart.
If primary wave 2 continues any higher, then it may not move beyond the start of primary wave 1 above 7,234.83.
A breach of the black Elliott channel by a full daily candlestick below and not touching the lower edge would add confidence to this main wave count. At that stage, the invalidation point may be moved to the end of primary wave 2.
A new low below 3,362.24 would add further confidence to this wave count.
Primary wave 3 should exhibit an increase in downwards momentum.
If the teal Elliott channel is breached by a full daily candlestick above and not touching the trend line, then the alternate wave count below should be seriously considered.
ALTERNATE WAVE COUNT
DAILY
Click chart to enlarge.
It is also again possible that Bitcoin may have found a low and may be in the early stages of a new bull market.
This wave count expects that the crash in price for Bitcoin was only 84% of value from the all time high. While this is possible, it would not follow the more common pattern of Bitcoin to crash over 90% in value. This must reduce the probability of this wave count.
If this wave count is correct, then an increase in upwards momentum would be expected as a third wave at two degrees unfolds.
Intermediate wave (2) may not move beyond the start of intermediate wave (1) below 3,362.24.
TECHNICAL ANALYSIS
Click chart to enlarge.
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.
So far at the lowest low from the all time high Bitcoin has only retraced 84%. While this is deep, its corrections are usually deeper than this.
Currently, price is range bound with resistance and support identified.
On Balance Volume is again range bound.
Wait for a classic breakout. An upwards breakout of price requires support from volume for confidence, but a downwards breakout does not.
On Balance Volume broke out before price and exhibits bullish divergence with price. This supports the alternate Elliott wave count.
Published @ 01:42 a.m. EST.
Last analysis on the 14th of December advised that a channel should be used to indicate when downwards movement was over and a sideways consolidation or bounce may have begun. The channel was breached on the 19th of December and price has mostly moved sideways since.
Summary: For the short term, this sideways consolidation may continue and may find a high about 4,722. Thereafter, another strong fall in price is expected.
It would be safest to assume that the bear market will continue while Bitcoin remains below 7,234.83. The target is about 1,924, but it may be much lower than this; it is possible this bear market may see the end of Bitcoin.
The data used for this analysis now comes from Yahoo Finance BTC-USD.
Updates to this analysis are in bold.
MAIN ELLIOTT WAVE COUNT
MONTHLY
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 December 23, 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.
Confidence that Bitcoin was most likely crashing started since the Forever trend line was breached in June 2018.
WEEKLY
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.
Super Cycle wave (II) would most likely be a zigzag, but it may also be a flat, combination or triangle; a zigzag would subdivide 5-3-5.
It is possible that cycle waves a and b may be complete within the expected zigzag of Super Cycle wave (II). Cycle wave a will fit as a leading contracting diagonal, and cycle wave b fits well as a running contracting triangle.
The target calculated expects cycle wave c to exhibit a Fibonacci ratio to cycle wave a. Bitcoin rarely exhibits Fibonacci ratios, so this target does not have a good probability. If this target is wrong, it may not be low enough.
An Elliott channel is added to downwards movement. Upwards bounces may find resistance about the upper edge.
DAILY
Click chart to enlarge.
Cycle wave c must subdivide as a five wave motive sturucture, most likely an impulse. Within cycle wave c, primary wave 1 may be complete.
Primary wave 2 would most likely subdivide as a zigzag. So far, within primary wave 2, intermediate waves (A) and (B) may be complete. Intermediate wave (C) may end about the upper edge of the black Elliott channel drawn about primary wave 2. This may also be where upwards movement may find resistance at the teal channel copied over from the weekly chart.
When primary wave 2 may be complete, then primary wave 3 should exhibit an increase in downwards momentum.
TECHNICAL ANALYSIS
Click chart to enlarge.
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.
So far at the lowest low from the all time high Bitcoin has only retraced 0.84. While this is deep, its corrections are usually deeper than this.
Currently, price is range bound with resistance and support identified by cyan trend lines about 4,300 and 3,170.
On Balance Volume is also range bound. Wait for a classic breakout. An upwards breakout of price requires support from volume for confidence, but a downwards breakout does not. If On Balance Volume breaks out before price, it may signal the direction of a price breakout to follow.
Published @ 11:41 p.m. EST.
Last analysis on the 6th of December expected some sideways movement, which is what has happened.
Summary: Use the channel on the main daily chart. Assume more downwards movement while price remains within the channel. When the channel is breached, then assume a multi-month bounce or consolidation may begin that should remain below 7,234.83.
It would be safest to assume that the bear market will continue while Bitcoin remains below 7,234.83. The target is about 1,924, but it may be much lower than this; it is possible this bear market may see the end of Bitcoin.
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.
MAIN ELLIOTT WAVE COUNT
MONTHLY
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.
Confidence that Bitcoin was most likely crashing started since the Forever trend line was breached in June.
WEEKLY
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.
Super Cycle wave (II) would most likely be a zigzag, but it may also be a flat, combination or triangle; a zigzag would subdivide 5-3-5.
It is possible that cycle waves a and b may be complete within the expected zigzag of Super Cycle wave (II). Cycle wave a will fit as a leading contracting diagonal, and cycle wave b fits well as a running contracting triangle.
The target calculated expects cycle wave c to exhibit a Fibonacci ratio to cycle wave a. Bitcoin rarely exhibits Fibonacci ratios, so this target does not have a good probability.
DAILY
Click chart to enlarge.
Within cycle wave c, primary wave 1 may be incomplete.
Primary wave 2 may not move beyond the start of primary wave 1 above 7,234.83.
Unfortunately, Bitcoin rarely exhibits Fibonacci ratios in its actionary waves. Therefore, it is impossible to calculate a target. A best fit trend channel is drawn on the chart. An upwards breach of the channel would indicate that primary wave 1 should be over and then primary wave 2 should be underway.
DAILY ALTERNATIVE
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Primary wave 2 may be subdividing as an expanded flat. Two targets are calculated at two different wave degrees.
Primary wave 1 lasted 41 sessions. Primary wave 2 may last about two to three months to have reasonable proportion to primary wave 1.
Primary wave 2 may not move beyond the start of primary wave 1 above 7,234.83.
SECOND ALTERNATE ELLIOTT WAVE COUNT
DAILY
Click chart to enlarge.
By moving the degree of labelling within cycle wave c up one degree, it is possible that the crash for Bitcoin could be over.
This alternate wave count has changed since the last published analysis. It now sees Super Cycle II over at the last low.
This wave count has a very low probability. It does not follow normal behaviour for Bitcoin.
Normal behaviour for an early second wave correction is for Bitcoin to retrace deeper than 90% of the first wave. This wave count expects that Super Cycle wave (II) was only 84%. While this is very deep, it is not as deep as is normal for Bitcoin.
A candlestick reversal pattern at the low of Super Cycle wave (II) would be fairly likely at the weekly chart level which is not the case at this time.
TECHNICAL ANALYSIS
Click chart to enlarge.
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.
So far at the lowest low from the all time high Bitcoin has only retraced 0.84. While this is deep, its corrections are usually deeper than this.
For the short term, expect more downwards movement as likely. This is supported by volume. Downwards days have greater support from volume in recent movement.
Published @ 04:56 a.m. EST.
Last analysis on the 21st of November expected more downwards movement for Bitcoin, which is what has happened.
Summary: At this stage, Bitcoin may either bounce up to about 5,827 or move sideways. The bounce or consolidation may last about two to three months.
It would be safest to assume that the bear market will continue while Bitcoin remains below 7,234.83. The target is about 1,924, but it may be much lower than this; it is possible this bear market may see the end of Bitcoin.
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.
MAIN ELLIOTT WAVE COUNT
MONTHLY
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.
Confidence that Bitcoin was most likely crashing started since the Forever trend line was breached in June.
WEEKLY
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.
Super Cycle wave (II) would most likely be a zigzag, but it may also be a flat, combination or triangle; a zigzag would subdivide 5-3-5.
It is possible that cycle waves a and b may be complete within the expected zigzag of Super Cycle wave (II). Cycle wave a will fit as a leading contracting diagonal, and cycle wave b fits well as a running contracting triangle.
The target calculated expects cycle wave c to exhibit a Fibonacci ratio to cycle wave a. Bitcoin rarely exhibits Fibonacci ratios, so this target does not have a good probability.
DAILY
Click chart to enlarge.
Within cycle wave c, primary wave 1 may be complete.
Primary wave 2 would most likely subdivide as a zigzag and may end about the 0.618 Fibonacci ratio of primary wave 1.
Primary wave 1 lasted 41 sessions. Primary wave 2 may last about two to three months to have reasonable proportion to primary wave 1.
Primary wave 2 may not move beyond the start of primary wave 1 above 7,234.83.
ALTERNATE ELLIOTT WAVE COUNT
DAILY
Click chart to enlarge.
By moving the degree of labelling within cycle wave c up one degree, it is possible that the crash for Bitcoin could be over.
This wave count has a very low probability. It does not follow normal behaviour for Bitcoin.
Normal behaviour for an early second wave correction is for Bitcoin to retrace deeper than 90% of the first wave. This wave count expects that Super Cycle wave (II) was only 82%. While this is very deep, it is not as deep as is normal for Bitcoin.
A candlestick reversal pattern at the low of Super Cycle wave (II) would be fairly likely at the weekly chart level and not only the daily chart, which is not the case at this time.
TECHNICAL ANALYSIS
Click chart to enlarge.
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.
So far at the lowest low from the all time high Bitcoin has only retraced 0.82. While this is deep, its corrections are usually deeper than this.
A bounce or consolidation may unfold for the short to mid term. This view is supported by:
1. On the 26th, 27th and 28th of November a Morning Doji Star unfolded.
2. RSI reached deeply oversold and there exhibited bullish divergence with price.
3. The short-term volume profile is bullish.
4. ADX reached very extreme and is now declining.
Support is identified on the chart.
Published @ 02:02 a.m. EST.
The first preferred Elliott wave count expected Bitcoin to exhibit an increase in downwards momentum. This is exactly what is happening. The second Elliott wave count was invalidated seven days ago.
Summary: Downwards movement has push from rising volume. This is very bearish. Expect downwards movement to continue until there is a bullish candlestick reversal signal on the daily chart. Next support below is at 3,612 and 2,980.
I cannot at this time yet see a completed corrective Elliott wave structure for this downwards movement, so I expect it is incomplete.
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
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
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.
Super Cycle wave (II) would most likely be a zigzag, but it may also be a flat, combination or triangle; a zigzag would subdivide 5-3-5. Cycle wave a should subdivide as a five wave structure, but so far that would be incomplete.
Within this five wave structure unfolding lower, minor wave 3 may now have moved through its middle. Minor wave 4 may not move back up into minor wave 1 price territory above 6,463.54.
When cycle wave a may be seen as complete, then a one to multi-year bounce or consolidation for cycle wave b may be expected. This may present a weak buying opportunity, but the huge variation in structure of b waves makes this extremely risky.
DAILY
Click chart to enlarge.
If Bitcoin is crashing, then a five down structure should develop at the weekly chart level. This would still be incomplete.
A third wave down may now be moving through its middle at six degrees. Bitcoin may be still winding up for a further 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.
Within the middle of this third wave, subminuette wave iii may be either complete or close to complete. Subminuette wave iv may not move into subminuette wave i price territory above 6,134.76.
Only when a clear bullish reversal pattern forms on the daily chart would a more time consuming bounce or consolidation be expected to interrupt this downwards trend. Today that is not present, so it seems more reasonable to expect this downwards movement to continue.
TECHNICAL ANALYSIS
Click chart to enlarge.
For the short term, support from volume is pushing price lower. This is very bearish.
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. RSI is now deeply oversold, but past behaviour indicates this may continue for some time. There is plenty of room for this downwards trend in Bitcoin to continue.
So far at the lowest low from the all time high Bitcoin has only retraced 0.79. While this is deep, its corrections are usually deeper than this.
Support below is identified on the chart.
Published @ 05:23 a.m. EST.
Bitcoin continues to move sideways and remains range bound.
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 six degrees.
A new alternate Elliott wave count is published today which allows for a large bounce here before a continuation of downwards movement to new lows.
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
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
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
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 six 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 and is now breached.
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.
I have 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.
SECOND ELLIOTT WAVE COUNT
WEEKLY
Click chart to enlarge.
It is also possible that Bitcoin may move lower as a flat correction, double combination or a double zigzag.
Within a flat correction, cycle wave a may have completed as a zigzag. Cycle wave b would need to move higher to retrace a minimum 0.9 length of cycle wave a at 18,480. Cycle wave b would need to subdivide as a corrective structure, most likely a zigzag. Cycle wave b within a flat correction may make a new price extreme beyond the start of cycle wave a.
Within a double zigzag, cycle wave w may be the first zigzag complete. Cycle wave x would have no minimum nor maximum required length to cycle wave w; it only needs to complete as a corrective structure, which would most likely be a zigzag. X waves within double zigzags are usually shallow, so that the whole structure has a strong slope.
Within a double combination, cycle wave w may be the first complete structure as a zigzag. Cycle wave x would have no minimum nor maximum required length to cycle wave w; it only needs to complete as a corrective structure, which would most likely be a zigzag. X waves within combinations are usually deep, so that the whole structure has a sideways look. Cycle wave x within a combination may make a new price extreme beyond the start of cycle wave w.
A second wave may not subdivide as a triangle with its sole corrective structure, so a triangle for this correction is not considered.
DAILY
Click chart to enlarge.
The daily chart focusses on the whole of cycle wave b or x so far.
Cycle wave b or x may be unfolding as a regular flat correction, and within it primary wave A fits as a three and primary wave B also fits as a corrective structure. Primary wave B effects a net 0.965 re-tracement of primary wave A at its end. This meets the minimum requirement of 0.9 for B waves within flat corrections.
A target is calculated for primary wave C to end. However, because Bitcoin does not exhibit reliable Fibonacci ratios this target is a rough guideline only. A better guide may be resistance about the orange forever trend line.
TECHNICAL ANALYSIS
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. So far at the lowest low from the all time high Bitcoin has only retraced 0.70. While this is deep, its corrections are usually deeper than this.
On Balance Volume and price remain range bound. Price has resistance about 7,775 and support about 5,890. Watch both closely to see a breakout.
Published @ 03:21 p.m. EST.
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
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
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
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
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.
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
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
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
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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
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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.