BTCUSD has been on a hard downward trajectory for the past month. I touched on these patterns a bit and we hit both of the targets set out by the bearish gartley harmonic. After re-assessing the current state of things, I believe we may be in for a rally, before a final corrective wave downwards.
We completed a leading diagonal (falling wedge) last night. This was confirmed by the 3-3-3-3-3 subwaves, making up the 1-2-3-4-5 pattern, with the 5th wave being characteristically overthrown. The fact that it overthrew the wedge gives me even more confidence in this call. This wedge makes up our (A) wave of the ABC correction. We climatically ended in the 7500s as predicted. I think we will now have a sharp retrace, forming wave (B), to either the 61.8% or 78.6% retracement levels of wave (A). This will give the market confidence in a renewed bull run, just before the bottom falls out once again. The price targets for wave be are 15k-17k. As the 78.6% retracement is far more typical for B waves, I would anticipate the yellow path to be our most likely. From there we will have an equally sharp conclusion to our ABC correction down to 5k. I am posting this idea as Long, because that is the current sentiment, however be cautious to start exiting positions in the range mentioned above.
This rally will also likely give some breathing room to altcoins. ETHUSD and ETHBTC have been looking particularly bullish, and may be ones to watch. However, trade with caution as strong BTCUSD rallies can often suck the wind out of alts, so this may not trade as expected.
I will update as this unfolds. My last thread on the bearish gartley is concluded. The ideas to watch from here are the macro bullish gartley and this one here.
*THESE ARE MY OPINIONS, THIS IS NOT TRADING ADVICE*
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I forgot to mention the alternative to the yellow path would be the 0.618 fib retracement and a price target of 3k for our last corrective (C) wave.
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Posting this potentially to support the 5-3-5-3-5 leading diagonal theory. Will work up a count that counters this argument with a 3-3-3-3-3 ending diagonal, which would really shake things up.
(THE 3-3-3-3-3 SUBWAVE STATEMENT WAS A MISTAKE, SHOULD BE 5-3-5-3-5 FOR LEADING AS POINTED OUT BY @BostjanZ2017)
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And I forgot to post the chart:
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Slight bullish reinforcement here. Daily is looking to close with a tweezer bottom, bullish reversal signal:
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Retesting bottom trend line now, this needs to hold or else we could see new lows.
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We're also sitting on the 61.8% fib support. This is crucial.
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Small time frames, so take this with a grain of salt. I think we just fell out of an ending diagonal. Charted it as a parallel channel, just to rule that out, and we had broken out of that on increasing volume. I think a lower low is in store, but a temporary bottom is likely still near.
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Forgot chart:
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I posted an update on this trading idea, see here:
@Manifested...newbie here (still learning EW theory)...love your charts, they are simple and easy to understand. Would you mind posting chart updates instead of snapshots? It gives a better picture when one is allowed to play with the charts. Thanks. Please keep updating, I follow this thread regularly.
Manifested
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@chat00, I will certainly look into this, I'm still getting comfortable with everyone TradingView can do! Thanks for your input.
josephtse
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There's also a chance it falls to 7000 this week too. I would even give it a 40% probability. SEC meeting on Tues cannot be good news for the market. They are gonna clamp down and establish hard rules for crypto trading. That means no spoofing, no wash sales, no illegal ICOs. And they will promote that idea to other countries and governments.
Manifested
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@josephtse, Very true. I will hopefully be posting an update tomorrow. My initial gartley had targets as low as $7200. I think fundamentally, regulation is needed in the crypto space, to some degree. There is a lot of greed in the world. That being said, people viewing it as "fud" is likely going to be a good buying opportunity.
downb4up
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@Manifested, can you please explain how you create these charts with the long formula (BTCUSD+BTCUSD+BTCJPY/USDJPY+....)
Manifested
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@downb4up, Sure. You can input equations into the search bar (and watch list) that can do multiple things. They can calculate arbitrage, make conversions, etc. I use them to chart the average price of coins across the major exchanges/regions.
Copy and paste the following (you can also set on your watch-list):
I use this one to chart patterns, but the volumes are incorrect since it includes that of the forex markets. It converts the Japanese and Korean exchanges to USD as well as compensates for the premium on Korean exchanges:
(KRAKEN:XBTUSD+COINBASE:BTCUSD+BITFINEX:BTCUSD+BITSTAMP:BTCUSD+BITFLYER:BTCJPY/FX:USDJPY+(BITSTAMP:BTCUSD+BITFINEX:BTCUSD+COINBASE:BTCUSD+KRAKEN:XBTUSD)/4/((KORBIT:BTCKRW/FX_IDC:USDKRW+XCOIN:BTCKRW/FX_IDC:USDKRW)/2)*(KORBIT:BTCKRW/FX_IDC:USDKRW+XCOIN:BTCKRW/FX_IDC:USDKRW))/7
I use this chart for volume (as well as patterns). It averages the 4 primary USD exchanges
(KRAKEN:XBTUSD+COINBASE:BTCUSD+BITFINEX:BTCUSD+BITSTAMP:BTCUSD)/4
josephtse
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I think it needs to fall one more time to 8000 before it can have a meaningful rally up. Daily RSI is not oversold yet. It's within 1000 points away though.
Manifested
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@josephtse, I could definitely see a retest of the bottom trend line of the wedge, and depending what exchange you are looking at it could be $8,000 for sure, my money would be on $8150 or something just shy.
josephtse
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@Manifested, Hit 7800. Still dangerous to go long. I don't think we've seen bottom yet. We need to see BLOOD ON THE STREETS. $6200.
Manifested
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@josephtse, I would argue that RSI and Stoch RSI are pretty oversold, however a touch of this trend line on RSI would definitely be a buy signal in my book.