surangadesilva
Short

Elliott Wave Analysis of the Bitcoin Market Cycle (2017 - 2018)

BITSTAMP:BTCUSD   Bitcoin / U.S. Dollar
I'm using Elliott Waves Principle with Fibonacci levels to analyse the whole "MARKET CYCLE" of Bitcoin which started in June - July 2017.

Before I tell you how I analysed the market you may be wondering why I have "MARKET CYCLE" in bold letters. This is because one of the common mistake of the traders is not analysing the Market from where it started!. I would like to
learn from other peoples mistakes so i decided to get trained and learn more about Elliott Waves Principle which started in 1930's and became popular in 1970's with the legendary book on the Elliott Wave entitled Elliott Wave Principle: Key to Stock Market Profits...

According to that these are the type of waves we have in a market:

Intermediate Wave (Weeks to Months) - (1) (2) (3) (4) (5) (A) (B) (C)
Minor Wave (Weeks) - 1 2 3 4 5 A B C
Minute (Days) - ((i)) ((ii)) (( iii )) ((iv)) ((v)) ((a)) ((b)) ((c))
Minuette (Hours) - (i) (ii) ( iii ) (iv) (v) (a) (b) (c)
Subminuette (Minutes) - i ii iii iv v a b c

And these are the Fibonacci levels that i'm using to do the wave counts:

wave 2 = 0.618 - 0.8 of wave 1
wave 3 = 1.618 of wave 1
wave 4 = 0.5 - 0.618 of wave 3
wave 5 = 0.618 - 1 of wave 1
wave B = 0.5 - 0.8 of wave A
wave C = 0.618 - 1.236 of wave A

Here is the big picture showing the Bitcoin Market Cycle in 1 Day Chart:


We have ABCDE Descending Traingle Correction wave and we are in the Intermediate Corrective Wave (D) going to (E). See here in 4hr timeframe:


In that Intermediate Corrective Wave going from (D) to (E) We are in the Minor Wave A. See here in 2hr timeframe:


In that Minor Wave A we are in the Minute Wave ((ii)) going to (( iii )). See here in 1hr timeframe:


In that Minute Wave ((ii)) we are in the Minuette Wave (ii) going to ( iii ). See here in 30min timeframe:


In that Minuette Wave (ii) going to ( iii ) we are in the Subminuette Wave iv going to v. See here in 15min timeframe:


Please note that if we got any unexpected volume because of the recent extreme manipulation we might have elliott wave overlapping.

I.E: if any of the Wave 2 overlap Wave 1.

If this happens then we have to recount the Waves.

RISK DISCLOSURE:

Please note that this is purely Educational purposes only and not as Individual Investment Advice. If you choose to follow the above techniques you do so at your own risk after giving thorough and reasonable thought and consideration to your actions and their potential consequences
May 01
Comment: Looks like we just completed the Minuette Wave (iii). if it doesn't continue going down a little bit on Wave (iii) then its going up to Minuette Wave (iv) which is Fib 0.5 - 0.618 of Wave (iii)

May 02
Comment: Minuette Wave (iii) still not completed. Going towards 0.5 - 0.618 area of Minuette Wave (ii). You can expect wave (iii) complete 9125 - 9200 if this respects the fib levels. If not then we have to recount the waves to find out if the Subminuette wave iii or v is extended. There are occasions where both wave iii and wave v extended.


See more information about Elliott Waves:

RULES

1. Impulse waves 1, 3, and 5 always subdivide into five waves.
2. Wave 1 must be an impulse or a leading diagonal pattern.
3. Wave 2 never goes beyond the start of wave 1.
4. Wave 3 is never the shortest impulse wave.
5. Wave 3 must be an impulse.
6. Wave 4 never moves beyond the end of wave 1.
7. Wave 5 must be an impulse or an ending diagonal pattern.
8. Waves 1,3 and 5 can never all be extended
9. An ending diagonal occurs in wave 5 of an impulse or wave C of an A-B-C correction.
10. Wave 2 never goes beyond the origin of wave 1.
11. Wave 3 always goes beyond the end of wave 1.
12. Waves 4 and 1 overlap.
13. Wave 5 always ends beyond the end of wave 3 in a leading diagonal.

GUIDELINES

1. Sometimes wave 5 does not move beyond the end of wave 3 – called truncation.
2. Wave 5 often ends or slightly exceeds a trend line drawn off wave 3 parallel to a trend line drawn connecting the ends of waves 2 and 4.
3. Wave 1,3 or 5 is usually extended where the corrective waves are small compared to the impulse waves.
4. Wave 3 is usually the steepest and longest wave.
5. Usually either wave 3 or 5 is extended.
6. Fibonacci percentages are used to calculate retracements for waves 2 and 4.
7. Fibonacci ratios are used to target the end of waves 3 and 5.
May 02
Comment: Looks like Subminuette Wave v is extended

May 03
Comment: Target Reached (1.618 of wave 1 to iii) and it looks like its time for correction...

May 03
Comment: Looks like we had over 360M of volume for last 6hrs which took Bitcoin from 9200 to 9700 (500$). We had the similar volume on April 12 where 500M volume took Bitcoin by 1000$+

This is good example of unexpected high volume / manipulation / pump and dump etc. If this happens you need to check Elliot Waves again in 1 Day Chart and so on and recount the waves.

Now i have done that and here are the new possibilities:

Double top like we did in February 2018 (see the similarities in red highlighted boxes and the similar Elliot waves structure) and then down to the Yearly uptrendline and then go upto 11700


Keep Continue to go up to 11700

May 05
Comment: We are in a NO TRADE ZONE here as we still below 200ma and we got a DOJI candle in daily chart (less bullish)

Here's the updated daily chart:
Please note that ABCDE correction pattern only can invalidated when you can't redraw Elliott Waves in daily chart for this pattern. Then it's most likely doing a different pattern all together. (i.e: ABC Zigzag or Started a new market cycle)
May 05
Comment: See the Updated chart with 3 Confirmations:

Elliot Waves:

At the moment we are going from (C) to (D)
Within that we got ABC wave
Wave A and C are impulsive waves
Wave C usually 1.272 of A
So Wave C / Wave (D) ~ 10325$

Support & Resistance:

Resistance Range between ~10.5 - 11k

Moving Averages:

200ma is around ~10k at the moment

So according to all this Wave C or Wave (D) could be somewhere between ~10k - 11k

Above 11k ABCDE could be invalidated.


Hope this make sense
May 07
Comment:
May 09
Comment: i have redrawn the waves as we had extended subwave (iii) and subwave (v) of wave ((i)) and it seems like i drawn the waves wrong before thinking that they were not extended waves.

Orange Waves (A), (B), (C), (D), (E): Intermediate Waves (Weeks to Months)
Blue Waves A, B, C: Minor Waves (Weeks)
Red Waves ((i)), ((ii)), ((iii)), ((iv)), ((v)): Minute Waves (Days)
Black Waves (i), (ii), (iii), (iv), (v), (a), (b), (c): Minuette Waves (Hours)

Where i,ii,iii,iv,v are Impulsive or Long Waves and A,B,C,D,E,a,b,c are Corrective or Shorter Waves

Here's the bigger picute of the waves


Wave counting gets hard when it's extended specially when both 3 & 5 is extended. You will only see it if you check in long term (Daily / Weekly Chart). Usually all 3 Waves (1,3 & 5) can't be extended at the same time.


So at the moment it looks like we are in wave ((ii)) correction wave.
Impulsive waves (1,3,5) got 5 subwaves inside and correction waves (2,4) got 3 waves (a,b,c).

We have done 1st wave (a) of that correction wave going up and now we doing upto 0.386 - 0.5 correction down which is wave (b) which is around 9171$ - 9217$. Also please note that this is the maximum it can go but give 50$ +/- range for that.

After that correction then comes the impulsive wave (c) which is the last wave of the correction which is around 1.272 of the wave (a). Means we will go upto around 9550 - 9650 max which is just above 0.618 of wave ((i)).

So You may be able to earn some profit if you take a chance to ride the impulsive wave going from

wave (b): 9171 - 9217 to
wave (c): 9550 - 9650

So after that we start the wave ((iii)) going down again. Hope this helps
May 11
Comment: Most likely we are in Wave (ii) of ((iii)). Wave (ii) is usually 50 - 80% of Wave (i) so you can expect the price to retrace 9100 - 9300 (max). Doesn't mean that it always have to retrace to that level. Sometimes when there is low volume it might just do 38.6% (9070) or even 23.6% (9000).

See the big picture here:


And the zoomed chart here:


Comments and Ideas most welcome
May 11
Comment:
May 13
Comment: Still the price didnt manage to break wave (b) means that wave (c) still in play.
I have done the / wave (c) / wave v projection all seems to be completing ~8.8+

May 14
Comment: Updated Wave (ii), (iii), (v) Projections according to EW Fibo levels.

According to this Wave (v) / Wave ((v)) / Wave A will be completed in 2-3 days as we are still in Wave (i). Also please note that Wave iv is usually 0.5 - 0.618 but we had only 0.236 in Wave ((iii))

Thanks for your charts and sharing your ideas.



Reply
@tuamen, Thanks for sharing your idea as well bro. This could be the worst case scenario but in 2014 we had the Mt Gox Exchange hacking case that took down bitcoin by 80%+ but until we got such a case people will not stop buying thinking that they will miss the train. Yes of course FOMO will end if there is big selloffs from the big players such as CME / CBOE or Whales.

By the looks of it Bitcoin Futures like CME, CBOE and now Goldman Sachs most likely trying to regulate the market:

We need to wait and see even though its so hard to control the mind thinking that we will miss the train :-(
Reply
Yesterday daily candle was a hanging man. Today´s candle could be ending as a shooting star. Both of them are bearish, but in order to confirm the trend changing we need either to print a bearish engulfing today which will confirm it or next candle printing red and closing below yesterday and today candle.

So you think that the ABCDE pattern is still on the play? I´m quite new to elliot waves.
Reply
@Coinamic, Many thanks for your input. This is what i like people sharing ideas so that we could get multiple confirmations (Not just EW). Yes you are right the doji candle should be red or like a shooting start with another candle painting red to be more powerful bearish signal.

Until then i still believe ABCDE still on the play below 11k. If it goes above means that we had a ABC zigzag correction.

Also what i believe is that we need to prepare for the worse alteast so thats the reason why i chose this pattern.

"WORST" correction could be the combination correction which could take bitcoin down below yearly uptrend line (6k - 7k) and next worse is ABCDE which i believe we are in and then less worse is only ABC zigzag.

Also please feel free to comment if you find any new pattern that you come across. Thanks again.
Reply
Coinamic surangadesilva
@surangadesilva, just yesterday I was drawing an ABC correction, which could be leading the price to around 14.3k, but this just could be a mere bull trap.

However what have surprised me is the final change of the ABCDE correction. We had ABCD correctly printed, so we were waiting wave D to finish so the E could start. Suddenly the price breaks trend lines and seems that we could be in a ABC. What exactly invalidate an ABCDE correction? I mean, what´s the level where you can be sure that the ABCDE pattern is finally wrong and why?

No worries for the input, we are here to help eachother!
Reply
@Coinamic,

First of all I believe we need atleast 3 confirmations so I have used Elliott Waves + Support & Resistance + Moving Averages to confirm this. See below:


Elliot Waves:

At the moment we are going from (C) to (D)
Within that we got ABC wave
Wave A and C are impulsive waves
Wave C usually 1.272 of Wave A
Wave A is 1970$ so 1.272 of that is around 2505$
Wave B starts @ 7820$ so Wave C projection is 7820$ + 2505$ = 10325$
So Wave C / Wave (D) ~ 10325$


Support & Resistance:

Resistance Range between ~10.5 - 11k


Moving Averages:

200ma is around ~10k at the moment


So according to all this Wave C or Wave (D) could be somewhere between ~10k - 11k

Above 11k ABCDE could be invalidated.



Hope this make sense



Reply
Coinamic surangadesilva
@surangadesilva, yeah it makes sense! amazing thanks.
Reply
@Coinamic, Your welcome bro :-)
Reply
@Coinamic, I'm still thinking whether are we in a ABC correction after 12345 or do you think we are in a ABCDE descending triangle correction D going to E until consensus ?
Reply
we have some few hours left, but if btc close with the daily candel over 9700 trendline it will be a big bull marked
Reply
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