Putting it on record that I think the bear market will end April 1st, 2018 at 6.3-6.4k. Too many reasons and things line up to ignore it. I won't get into the full theory right now but I just wanted to put it out there to look back on.
If I'm wrong, god help us. If I'm right, you should still do your own TA and not trade with this as advice.
I will update with details on the theory and reasoning once I have it refined.
If I'm wrong, god help us. If I'm right, you should still do your own TA and not trade with this as advice.
I will update with details on the theory and reasoning once I have it refined.
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Update: slow mo falling on low volume. Getting close to target, we just bounced so buyers are starting to show up. I'm thinking everyone is expecting 6k but the drop is rapidly running out of steam not accelerating as you'd expect.
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alternately could get an ending diagonal
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diagonal seems to be playing out
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Target achieved. Missed by $50.
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Ok time to get into some reasoning as to why this could be the bottom.
The first thing we should look at is momentum.
This is Bill William's Awesome Oscillator otherwise known as AO. It works on a similar concept as the MACD histogram except that it uses 34, 8 MA's and plots the difference between them with the 0 line representing price. AO above 0 is bullish, below is bearish, green means rising, red means falling.
Check out the CRAZY divergence that has been happening over the past 4 months. You can see that we are now very close to 0 which means the trend is running out of steam. If you don't use AO, i'm sure you can find this divergence/convergence on many different indicators including MACD.
The first thing we should look at is momentum.
This is Bill William's Awesome Oscillator otherwise known as AO. It works on a similar concept as the MACD histogram except that it uses 34, 8 MA's and plots the difference between them with the 0 line representing price. AO above 0 is bullish, below is bearish, green means rising, red means falling.
Check out the CRAZY divergence that has been happening over the past 4 months. You can see that we are now very close to 0 which means the trend is running out of steam. If you don't use AO, i'm sure you can find this divergence/convergence on many different indicators including MACD.
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The next reason is this wavecount. Most cryptos seem to follow this pattern for their major corrections. For the non-elliott wavers it's called a 'triple three' or in this case, it's a double triple three. Really all that means is it's a bunch of ABC corrections connected in a combination.
I've observed this pattern across many cryptos. NEO, LTC, ETH are some examples.
I've observed this pattern across many cryptos. NEO, LTC, ETH are some examples.
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Here's Ethereum as an example. Can you find the pattern above in this chart?
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Simplified, on bitcoin it looks like this
But because that labeling violates some basic Elliott wave rules, this following would be the proper and complete labeling. In the end it doesn't matter too much as long as we can find a complete pattern.
But because that labeling violates some basic Elliott wave rules, this following would be the proper and complete labeling. In the end it doesn't matter too much as long as we can find a complete pattern.
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Yes, but what about the fractals!? You say.
Yes, fractals. They are an awesome guide for the type of pattern we can expect but not so great for predicting magnitude and timing.
Here is the fractal from 20k to 6k scaled down in size to match the C leg of the correction. Looks to me that the fractal is complete, no?
Yes, fractals. They are an awesome guide for the type of pattern we can expect but not so great for predicting magnitude and timing.
Here is the fractal from 20k to 6k scaled down in size to match the C leg of the correction. Looks to me that the fractal is complete, no?
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OK so how in the world was I able to nail the bottom at 6.4k which at a glance looks like the middle of nowhere? Well when looking for potential reversals I never trust a single factor. You have to find a CONFLUENCE of factors, meaning multiple clues are pointing at the same target.
Here we have two pitchforks with median lines intersecting at the same point...
Here we have two pitchforks with median lines intersecting at the same point...
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Now take a look at the chart below. I believe that we are in a subwave of the next cycle wave. Presumably wave 3 because it's so powerful, but I'm honestly not sure. The reason for my belief is whether you draw a curved channel to compensate for bitcoin's parabolic growth, or a straight channel, the top at 20k doesn't even come close to the top of the channel. If this were a cycle wave 3 or 5, you would expect it to touch the top of the channel.
Hence I believe we are in a LESSER degree correction than what you saw in 2014. This current correction is more like the one in 2013.
Hence I believe we are in a LESSER degree correction than what you saw in 2014. This current correction is more like the one in 2013.
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Here's the fibonacci retracement of the 2013 bubble taken from the end of the previous subwave. .707... huh. interesting.
BTW, all credit to @ronfkingswanson for introducing me to the .705 retracement. My curiosity got me wondering why this ratio pops up all over crypto. After some messing around with a calculator it turns out that .707 is the square root of 50%. Fascinating right? I have no idea why it shows up everywhere but I'm assuming it has something to do with the exponential ^2 growth of crypto. I guess it makes sense that if something goes up exponentially it must correct exponentially as well.
BTW, all credit to @ronfkingswanson for introducing me to the .705 retracement. My curiosity got me wondering why this ratio pops up all over crypto. After some messing around with a calculator it turns out that .707 is the square root of 50%. Fascinating right? I have no idea why it shows up everywhere but I'm assuming it has something to do with the exponential ^2 growth of crypto. I guess it makes sense that if something goes up exponentially it must correct exponentially as well.
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Here's the same retracement taken from the bottom of wave 2 (because if my hypothesis is correct, then you would draw the fibs from the end of the last wave of the same degree.
.707
.707