The chart above is a weekly chart of BTC 2.69% on a logrithmic scale. I have shown the wave counts to 4 degrees of trend. The key question is 'Are we in a higher degree (1 or 2) correction and headed well beneath 9,000; or are we going to hold the current low of 9222 ( BitStamp ) and make new highs?' My initial opinion is that it is possible that we are in a higher degree correction, but not confirmed. If the minor support trendline (highest of the 2 trendlines shown) is broken to the downside, then we are likely headed to one of the first 2 target zones shown, which would take us to the 5,500 area, which means we would be in a higher degree correction. If the minor support trendline holds, we are likely headed to new highs, and continutation of the trend. Note that at the 9222 low, the market has not yet shown enough weakness to hook back to the 1st previous high (as it has done on 5 of the 7 previous corrections, as annotated in purple).
I have shown the 19,666 top as a Degree 1 Wave 3; however, it is possible that Wave 3 extends, meaning the current top is just Degree 2 Wave 1 of Degree 1 Wave 3. If that were the case, the current correction would be a Wave 2 correction at Degree 2, which would still imply that we might reach the targets shown in the 5,500 area.
I do not profess that the wave counts shown are 100% correct or that they are even the 'best' counts. I would ask that anyone who has an educated opinion, especially those who would consider themselves Elliotticians, please weigh in on either i) improvements to the wave count and/or ii) evidence that you see as to whether or not we are in a higher degree correction.
If enough traders do weigh in, I will summarize the results and we'll see if there is a consensus one way or the other.
Since the minor trendline support is still holding, and since the market has not yet hooked back to the first previous high, I am labelling this analysis as 'Long.' However, for the reasons stated above, it is Long with Caution! It is quite possible that if we do rally back to the 19,600 highs, it might be another test back with lower lows then forthcoming in the possible higher degree correction. So if we make it back to the high, you want to see strength going through the 19,600 without a significant pullback back underneath 19,600.
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The current top is labeled in the chart above as Wave 3 (Degree 1), or alternatively Wave 1 of Wave 3. Below is an excellent chart by suggesting that the alternative count (Wave 1 of Wave 3) is more correct.
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Absolutely amazing chart and analysis!
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The market is saying that BTC is a buy here, for the following reasons:
1. We have a repeating pattern in that we hit the 200 mov avg and the .882 retracement.
2. Sufficient volume to be a market bottom
3. The major coins are all up 18%-30%.
You can see the repeating pattern in the chart below. It is possible that the BTC will make one more low to the inner blue channel line shown in the chart. This potentially lower low would be in the 6600 area.
If you are inclined to buy now but want further confirmation, you can buy thru the high of the previous 240M bar (16:00) which is 9096.79 (BitStamp).
see
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In the chart below, notice the similarities of the current correction off of 19666.00 and the correction off of 259.34 that started in April of 2013. I'll list them.
They each: 1. started off of the inner resistance channel line 2. found support at the 200 moving avg line 3. are 4 grid lines in length (so far) 4. made .882 corrections to the inner support channel lines.
If the similarities continue, then when the current correction is over, BTC would rally to the upper resistance channel line reaching the target of 100k - 110k.
The April 2013 correction was 4 grid lines in length and the correction lasted 12 weeks. The current correction has reached the same length (4 grid lines), but in 6 weeks. The market may simply just rally from the current low of 7625.25 (BitStamp), as it has already started to do. But more likely there will be either a testback after a few weeks of rally or sideways movement, or even one more push down to the inner blue support channel line, meaning a lower low which could reach the 6500 area. In any case, the rally towards the target area should either be on the way, or commence in six weeks or so after one more push down. Alt coins are rallying as well, so that's a good sign. In fact, Litecoin is already up over 70% from it's $100 low.
The rally into the 1163 high in Nov of 2013 which reached the upper channel resistance line was 9 grid lines in length and 21 weeks in time. Using those figures as a projection for the rally from our current correction low would take the market to the target shown in late July 2018.
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Yes, we are Long. However, Be Ready for Anything! So, if you have not, be sure to see:
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The market has now taken out to the high side the weekly doji bar at the recent low of 5920.72. The following chart indicates the significance of the doji bar and the accompanying volume. On prior occurrences you can see that new highs were always made. Will new highs be made from here? Probably, but we still have not had a testback to the low and one may be coming from the upper channel resistane line, which is currently in the 12,600 area.
Nice, Sir, your main (first) pic shows we will bounce in March 12. My time fibs also says that.
josephtse
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I think yes. Your graph looks like you're just guessing but look at the length of your red down lines. They are the same angle and length, so you see it will drift down for another 6-10 months and drift down slowly. After parabolic runs, it takes much cool-off time to consolidate. The parabolic run was 2 months. Usually refractory periods are 2.6 to 3 times the length in time to recover. So your'e looking at 6 to 11 months of flat to downish behavior. Don't let anybody tell you any different. July-November (more likely November), where that triangle meets at the long term trendline on the log graph, is where the downtrend ends. Around 4500 area. Could be +- 2000, but in general, it's heading to 5000 and below.
semasters
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@josephtse, Take a look at the most recent chart posted an 'update' (Jan 31,2018). This chart is the one with 4 red channel lines. It reportedly was done by Masterluc. The correction we are in currently from the recent high of approx 20k is coming off of the 2nd red channel line from the top (in fact, this chart, done 6 months earlier, was spot-on hitting the 20k area in December of 2017. The last correction off of that same channel line started the week of 04/08/2013, and was also at the end of (or a pause point in) a parabolic rise. The correction lasted 3 months until the week of 07/01/2013, before hitting the 1200+ high that was the beginning of the year long bear market. So there is evidence that we make not see a year long correction until we reach the end of this bull run (if and) when it hits the top of the red channel in the 100k area, which also means we might be at a pause point lasting a matter of a few months before rising into the 'super growth' channel between the top to channel lines.
roaken
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If we're on Wave 3, it would need to be exponentially larger than wave 1. I believe 75k shown in my chart would be high enough to complete this wave in ratio to wave 1.
semasters
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@roaken, Could you please explain this more? It seems to me that Wave 3 (as I show it) is exponentially larger than Wave 1. Why is this not the case?
roaken
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I count only 7 waves of 9 waves complete of wave 3. Interesting perspective seeing this past year of bull trend as wave 3. This looks right, but I consider 2 more waves before mass correction.
Check my chart on BTC to see how I counted the waves:
semasters
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@roaken, I think your exponential curve is correct, and we are both looking at the same target high in a similar timeframe. The chart is missing 4 years of data as the earliest recorded trading I have found is 2011 on Bitstamp. This additional data does factor into the wave count. So it appears to me that your charts starts close to what my chart shows as the beginning of Wave 3. I assume that you are using ABCDE in the context of showing the impulse waves that are the subdivisions of what you are calling Wave 1.
Nidalas
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Hello,
A friend directed me to your idea, which I find well done and well thought, so congratulations !
Here you will find my personal answer from an idea I published some time ago. Please disregard the rather "crude" lines I have drawn, since I can not edit the idea
semasters
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@Nidalas, Looks like we are talking the same language. I'm sure others have done the same analysis as well; just hope they weigh-in. Anyway, nice work.
Nidalas
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@semasters, I'm sorry, I wasn't clear, but what I meant was that my "weight-in" is in the description of the chart, not in the chart itself :)
And to be even clearer, I don't see it as a major degree correction, but at worst a wave 4] of 5] out of the wave III of the grand cycle. But even then, I don't think so yet, we are too low on the chart compared to the target. Also the rise to 20k was way too short for a major degree wave, and with way too many retracements to be a final impulse of a wave III
We are now at the point of the parabola (10k), so either we continue the bull run exponentially, or we call the local top for a wave 3] and finish a 4] consolidation. Considering the recent weakness, I'd say that local top might be in, and that we see some months of consolidation before the real major III move up