Aka "Waves, Channels, Extensions Oh My!"
2021 so far has seen explosive moves in the Crypto space including Cardano ADA. What follows are multiple layers of analysis on ADA which paint a technical analysis story of how we got here, where we may end up, and when we might get there.
High-5 the Waves!
We see a story here of consistent back-to-back Elliot Wave 1-2-3-4-5 uptrend patterns with A-B-C downward retracements. We see so far four 1-2-3-4-5 uptrend waves (i.e. UPWAVES) in durations each of 26, 31, 34, and 23 days respectively with downtrend retracements in 9, 14, 7, and 7 days respectively. The downtrend retracements are about 1/3rd in duration (number of days) the uptrend moves. As of May 31, 2021 We may currently be in the 3rd uptrend wave of the 5th upward wave pattern (i.e. UPWAVE 5) on the year.
Extend Thy Fibs!
Elliot Wave patterns begin with an impulse wave which decidedly moves up/down beyond prior price swing highs/lows or beyond points of support or resistance. This is the first wave in the 5 wave UPWAVES patterns marked on the chart. If we draw Fibonacci extensions on the impulse waves we find UPWAVE 1 price hitting the 2.618 Fibonacci extension of its impulse wave within wave 3 of UPWAVE 1. For UPWAVE 2 price hit the 1.618 Fibonacci extension of its impulse wave in wave 5 of UPWAVE 2 and hit its 2.618 extension in wave 5 of UPWAVE 4. UPWAVE 3 had its impulse wave 1.618 and 2.618 extension price targets attained in waves 3 and 5 within UPWAVE 4. UPWAVE 4 also had both Fibonacci 1.618 d 2.618 impulse wave extension targets attained within waves 3 and 5 of UPWAVE 4. Basically, UPWAVE 4 resolved a number of Fibonacci extension price targets from prior UPWAVES and within its own UPWAVE. Thus, with all price targets hit we had the huge exhaustion pullback. While not represented in the chart for sake of clutter one could also make a case that the end of this 4th UPWAVE also represents the end of a larger timeframe 1-2-3-4-5 wave pattern to which at the conclusion of an A-B-C pullback we have begun both new medium term and new longer term UPWAVE patterns. At least, it sure seems like after a huge drop we're either beginning some grand new pattern continuing upward or possibly reversing direction and heading downward. Although, based on trend directions I believe we're continuing upward at least until the about-to-be-explained upward trend line channel is violated.
The Trend Is Your Friend – In The Channel
The purple trend lines on the chart form an upward trend line channel which functions as support and resistance. If in UPWAVE 5 we have wave 3 move above the middle trend channel line wave 4 may retrace and bounce off this middle trend channel line before wave 5 takes price higher. Price may extend upwards to the top trend line and then reverse or continue higher on its path toward the 2.618 extension of the impulse wave in UPWAVE 5. As indicated above, the upward trend should remain in tact until the bottom trend line (i.e. support) is violated and price closes below it. Should price dabble above the middle trend line within the channel this middle trend line could easily function as support in the future. In this case the current bottom trend line may simply fade away from memory and in the future no longer be relevant. Sustained closes above the top trend line in the channel would likely serve as a point of demarcation beyond which the lower trend line would no longer be relevant. But, a bit of upward price direction is required for ADA to decisively get to this point of establishing a new bottom support trend line.
Don't Just Tell Me Where But Tell Me When!
While we just have 4 UPWAVE patterns to work with in this analysis, there is some consistency with respect to the durations on uptrends and retracements within each UPWAVE pattern. If this continues and if it is true that as of May 31, 2021 ADA is currently within wave 3 of UPWAVE 5 and if we project that UPWAVE 5 may last 31 days in duration, then by end of June we could be at the conclusion of UPWAVE 5 and possibly at all-time-highs for ADA.
How High In June
While I cannot predict how high you might get in June 2021, based on this analysis within the next 30 days ADA may go up to between 2.7 and 3.0. 2.7 represents a potential price reversal point should ADA hit its upper trend line and bounce back while 3.0 represents the 2.618 extensions of UPWAVE 5's impulse wave.
Crypto Tsunami
Granted some crypto bulls may foresee—or at least highly desire—a crypto tsunami wave coming, should said wave hit within the current UPWAVE 5 then ADA could be looking at reached 5.0. While the case for this is not represented on this chart for sake of clutter, if one drew a 2.618 extension of the entire range of UPWAVE 4—which coincidentally also marks the bottom and top of the trend channel contained within UPWAVE 4—then one sees 5.0 as a price target. Should price break above the top of the trend channel this 5.0 price target appears attainable in the not too distant future. So, if surf's up, ride the wave!!!
Oh, and while out bathing in the sunlight don't get burned!! :)
With respect to the technical analysis gods I remain forever thy humble servant and avid price prediction alchemist.
Bill Doerrfeld
BDTrading
2021 so far has seen explosive moves in the Crypto space including Cardano ADA. What follows are multiple layers of analysis on ADA which paint a technical analysis story of how we got here, where we may end up, and when we might get there.
High-5 the Waves!
We see a story here of consistent back-to-back Elliot Wave 1-2-3-4-5 uptrend patterns with A-B-C downward retracements. We see so far four 1-2-3-4-5 uptrend waves (i.e. UPWAVES) in durations each of 26, 31, 34, and 23 days respectively with downtrend retracements in 9, 14, 7, and 7 days respectively. The downtrend retracements are about 1/3rd in duration (number of days) the uptrend moves. As of May 31, 2021 We may currently be in the 3rd uptrend wave of the 5th upward wave pattern (i.e. UPWAVE 5) on the year.
Extend Thy Fibs!
Elliot Wave patterns begin with an impulse wave which decidedly moves up/down beyond prior price swing highs/lows or beyond points of support or resistance. This is the first wave in the 5 wave UPWAVES patterns marked on the chart. If we draw Fibonacci extensions on the impulse waves we find UPWAVE 1 price hitting the 2.618 Fibonacci extension of its impulse wave within wave 3 of UPWAVE 1. For UPWAVE 2 price hit the 1.618 Fibonacci extension of its impulse wave in wave 5 of UPWAVE 2 and hit its 2.618 extension in wave 5 of UPWAVE 4. UPWAVE 3 had its impulse wave 1.618 and 2.618 extension price targets attained in waves 3 and 5 within UPWAVE 4. UPWAVE 4 also had both Fibonacci 1.618 d 2.618 impulse wave extension targets attained within waves 3 and 5 of UPWAVE 4. Basically, UPWAVE 4 resolved a number of Fibonacci extension price targets from prior UPWAVES and within its own UPWAVE. Thus, with all price targets hit we had the huge exhaustion pullback. While not represented in the chart for sake of clutter one could also make a case that the end of this 4th UPWAVE also represents the end of a larger timeframe 1-2-3-4-5 wave pattern to which at the conclusion of an A-B-C pullback we have begun both new medium term and new longer term UPWAVE patterns. At least, it sure seems like after a huge drop we're either beginning some grand new pattern continuing upward or possibly reversing direction and heading downward. Although, based on trend directions I believe we're continuing upward at least until the about-to-be-explained upward trend line channel is violated.
The Trend Is Your Friend – In The Channel
The purple trend lines on the chart form an upward trend line channel which functions as support and resistance. If in UPWAVE 5 we have wave 3 move above the middle trend channel line wave 4 may retrace and bounce off this middle trend channel line before wave 5 takes price higher. Price may extend upwards to the top trend line and then reverse or continue higher on its path toward the 2.618 extension of the impulse wave in UPWAVE 5. As indicated above, the upward trend should remain in tact until the bottom trend line (i.e. support) is violated and price closes below it. Should price dabble above the middle trend line within the channel this middle trend line could easily function as support in the future. In this case the current bottom trend line may simply fade away from memory and in the future no longer be relevant. Sustained closes above the top trend line in the channel would likely serve as a point of demarcation beyond which the lower trend line would no longer be relevant. But, a bit of upward price direction is required for ADA to decisively get to this point of establishing a new bottom support trend line.
Don't Just Tell Me Where But Tell Me When!
While we just have 4 UPWAVE patterns to work with in this analysis, there is some consistency with respect to the durations on uptrends and retracements within each UPWAVE pattern. If this continues and if it is true that as of May 31, 2021 ADA is currently within wave 3 of UPWAVE 5 and if we project that UPWAVE 5 may last 31 days in duration, then by end of June we could be at the conclusion of UPWAVE 5 and possibly at all-time-highs for ADA.
How High In June
While I cannot predict how high you might get in June 2021, based on this analysis within the next 30 days ADA may go up to between 2.7 and 3.0. 2.7 represents a potential price reversal point should ADA hit its upper trend line and bounce back while 3.0 represents the 2.618 extensions of UPWAVE 5's impulse wave.
Crypto Tsunami
Granted some crypto bulls may foresee—or at least highly desire—a crypto tsunami wave coming, should said wave hit within the current UPWAVE 5 then ADA could be looking at reached 5.0. While the case for this is not represented on this chart for sake of clutter, if one drew a 2.618 extension of the entire range of UPWAVE 4—which coincidentally also marks the bottom and top of the trend channel contained within UPWAVE 4—then one sees 5.0 as a price target. Should price break above the top of the trend channel this 5.0 price target appears attainable in the not too distant future. So, if surf's up, ride the wave!!!
Oh, and while out bathing in the sunlight don't get burned!! :)
With respect to the technical analysis gods I remain forever thy humble servant and avid price prediction alchemist.
Bill Doerrfeld
BDTrading
