Bitcoin Corrective Tsunami After-Effects
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Price target of $3000 has been reached. However, movement from $3800 to $3000 took several days to develop, whereas price movement from $3000 to $3800 was parabolic (hours) and therefore highly emotional (FOMO). This kind of parabolic price action is often reversed by an equally parabolic return to where it started.
In fact, there is the very real possibility of a double-top which appears to be in the process of forming, which if confirmed at the neckline suggests a return to previous lows, and perhaps testing new lows.
Further, there are CCI and Stochastic RSI divergences as shown in the chart, and volume is also decreasing. Together these suggests a reversal is likely, at least down to the double-top neckline, and if the neckline breaks, then back down to previous lows.
There is some uncertainty in the Elliott Wave numbering, since the recent rally could be considered a deep subwave 4 counter-correction, before resuming completion of the final leg of corrective wave C, or it could be the beginning of the new upward movement wave, with the ABC correction being complete. The reason I think it is the former is because the rally was formed far too quickly and emotionally. As previously mentioned, parabolic price actions are often followed by their mirror cousins sometime shortly after. Healthy price action usually requires some level of consolidation at their lows or highs before reversing. The relative strength, momentum and volume divergences, as well as forming double-top supports this.
If the double-top neckline breaks, then I am looking at price targets in the 3k area. And if the $2927 low is taken out, then I’m looking at targets in the $2734 area, which represents the fib. 0.618 extension of subwaves 1-3 of wave C. Finally, I’m also keeping an eye on deeper lows in the $2475 area corresponding to the fib. 0.5 retracement of wave (I), which also intersects the long-term trend line.
We now have some reference points for retesting. Be cautious, and don’t jump in too deep too quick. Leave something on the table in case prices go even lower than expected.
In fact, there is the very real possibility of a double-top which appears to be in the process of forming, which if confirmed at the neckline suggests a return to previous lows, and perhaps testing new lows.
Further, there are CCI and Stochastic RSI divergences as shown in the chart, and volume is also decreasing. Together these suggests a reversal is likely, at least down to the double-top neckline, and if the neckline breaks, then back down to previous lows.
There is some uncertainty in the Elliott Wave numbering, since the recent rally could be considered a deep subwave 4 counter-correction, before resuming completion of the final leg of corrective wave C, or it could be the beginning of the new upward movement wave, with the ABC correction being complete. The reason I think it is the former is because the rally was formed far too quickly and emotionally. As previously mentioned, parabolic price actions are often followed by their mirror cousins sometime shortly after. Healthy price action usually requires some level of consolidation at their lows or highs before reversing. The relative strength, momentum and volume divergences, as well as forming double-top supports this.
If the double-top neckline breaks, then I am looking at price targets in the 3k area. And if the $2927 low is taken out, then I’m looking at targets in the $2734 area, which represents the fib. 0.618 extension of subwaves 1-3 of wave C. Finally, I’m also keeping an eye on deeper lows in the $2475 area corresponding to the fib. 0.5 retracement of wave (I), which also intersects the long-term trend line.
We now have some reference points for retesting. Be cautious, and don’t jump in too deep too quick. Leave something on the table in case prices go even lower than expected.
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Double top has become triple top with the same effects if neckline is reached.Not
Double top -> triple top -> ascending wedge. Price broke out of the ascending wedge pattern for 1h candlesticks. So we can expect some good downward price movement.Not
The double/triple top hypotheses have been nullified, and the ascending wedge pattern has played out to completion. So we will need to look for new patterns for short-term price movement.Looking at the larger picture, it still looks like we aren’t quite finished with the large ABC corrective wave that began with the descent from 5k. In fact, it looks like we are currently in subwave 4 of the higher degree subwave C of the ABC correction.
In order for this view to be nullified, we need to touch
4K even if only briefly. That would then move this subwave 4 into the price territory of subwave 1, which contravenes one of the key requirements of Elliott Wave Theory. This would then mean that we probably have already finished the ABC correction and we are in the first upleg of the recovery UNLESS we were going to much lower levels, such as below 2k which is possible but unlikely at this time.However, until that happens (price touching
4K), I’m staying with my original view, that we are still in the 4th subwave of the ABC correction. With the current highs reached in this subwave 4 counter-correction, it brings likely subwave 5 price targets of $2800.Not
This was posted yesterday (Sept. 16, 2017). Apparently there is more confirmation that China will shutter all bitcoin exchanges, not just new ICOs. And that the move is not a temporary measure as many believed. How will the market react? Has this been priced in already, or should we expected even deeper lows? youtube.com/watch?v=UpOgz5wWrJg
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Checking coinmarketcap.com I see that the price of Bitcoin in the top ranked Chinese exchanges is equivalent of $3150 USD and for most other higher volume exchanges around the world it's around $3850. That's a 20%+ arbitrage opportunity!Not
The invalidation criteria for the original idea have already occurred, as the prior wave 2 actually reached down to $3910 and we've already passed that. So this requires renumbering of the Elliott Waves. There are a couple of ways they can be renumbered. One way, moves us into the beginning of a bull trend. The second way begins the C wave subleg descent of an even larger ABC correction wave, that has it's endpoint potentially at around the 2k-2.5k region. This view would have the A leg from 5k to 3k, the B wave from 3k to 4K+ and the C leg from 4K+ to $2-2.5k. I'll post a chart update shortly.Not
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