"Despite the fact that many analysts do not treat it as such, the Wave Principle is by all means an objective study, or as Collins put it, "a disciplined form of ." Bolton used to say that one of the hardest things he had to learn was to believe what he saw. If you do not believe what you see, you are likely to read into your analysis what you think should be there for some other reason. At this point your count becomes subjective and worthless. How can you remain objective in a world of uncertainty? It is not difficult once you understand the proper goal of your analysis. Without , there appear to be an infinite number of possibilities for market action. What the Wave Principle provides is a means of first limiting the possibilities and then ordering the relative probabilities of possible future market paths." ( pp .94-95, par. 4-1)
I am inherently neither Bull nor Bear; I believe what the chart shows me and express my analysis as such, whether that be or , it is what I see and I believe what I see.
"The single most important rule that can be gleaned from a study of the various corrective patters is that corrections are never fives. Only motive waves are fives. For this reason, an initial five-wave movement against a a larger trend is never the end of a correction, only part of it." ( pp .41, par. 2) "Sharp corrections angle steeply against a larger trend." ( pp .41, par. 3)
This Daily candle chart shows my preferred count for the entire BTC Correction that began in December 2017. It can be seen that the Correction began with a steep, declining, Motive 5-Wave that took the price from All Time High to 5811. As plotted my count is an , 5-3-5 formation, .
"... diagonal occasionally appears in the wave 1 of impulses and in the wave A position of zigzags...A in the wave 1 position is typically followed by a deep retracement." ( pp .40, par. 2)
A closer look at the 6 hour chart shows that the correction began with a for wave 1 down; the 18 hour chart below this also shows that diagonals have been common during the Correction.
"The A wave sets the tone for the B wave to follow. A five-wave A indicates a for wave B..." (p.81, par.2)
My count shows that wave B was a from 5811 to 11800...
"Within impulses, second waves frequently sport zigzags, while fourth waves rarely do." ( pp .42, par. 3)
Primary wave 2 of A and wave 2 of C are zigzags.
“Diagonal Rules: A diagonal always subdivides into 5 waves; An ending diagonal always appears as wave 5 of an impulse or wave C of a zigzag or flat…” (pp.87, par. 2) “In the contracting variety, wave 3 is always shorter than wave 1, wave 4 is always shorter than wave 2, and wave 5 is always shorter than wave 3.” (pp.88, par.1)
Currently wave 5 of 5 as plotted is conforming to the rules.
A quick note on price extremes and retracements of wave 4’s into wave 1’s in crypto: “In an impulse, wave 4 does not enter the price territory of wave 1. This rule holds for all non-leveraged “cash” markets. Futures markets, with their extreme leverage, can induce short term price extremes that would not occur in cash markets.” (pp.31, par. 4)
I think we can safely say that Bitcoin, and other cryptos, certainly fall into the category of an extreme leverage market.
“The most important empirically derived rule that can be distilled from our observations of market behavior is that when the fifth wave of an advance is an extension, the ensuing correction will be sharp and find support at the level of the low of wave 2 of the extension.” (pp. 68, par. 3)
The daily chart above shows that after a retracement of 70%the price of Bitcoin bounced at less than 7% difference from the beginning of the previous wave 5, below the wave 2 price of 7802.99 (chart below).
The forecast tool used in the Daily chart above shows that both in price increase and time duration wave 3 was the largest of the previous formation, including the fifth wave extension to All Time High.
A look at the RSI, Elliott Wave Oscillator, and the MACD all show positive momentum continuing to rise.
In searching for signs of divergence, none was particularly found but the closest pattern showing is that of Regular Bullish Divergence, with nearly flat price lows and significantly rising RSI.
As the last chart (below) in this initial post I will restate the Contracting Ending Diagonal Rule: “In the contracting variety, wave 3 is always shorter than wave 1, wave 4 is always shorter than wave 2, and wave 5 is always shorter than wave 3.” (pp.88, par.1)
With that I expect BTC to test 7050 before retracing to 6679…before continuing on to the next major wave in the structure, Cycle Wave 3.
BTC now in Wave 2 of 3
RSI Daily broke of wedge pattern
Daily MACD, MACD Histogram, and Elliott Wave Oscillator all Bullish
Hidden Bullish Divergence found on the 1 and 4 Hour charts...I anticipate a truncated C Wave near the 0.764 retracement level.
BTC Daily looking like a clear Wave 1 complete and in the middle of Wave 2
RSI, MACD, and MACD Histogram still very bullish...
My initial thoughts on the movement from 7820 to 8100 were that it was beginning Wave 1 of 3 and moving into sub-wave 4, with the secondary count having the move up as part of B Wave in a larger ABC Wave 2 correction...
The latter count of a larger ABC Wave 2 was confirmed by the distribution at 8155 down to 7950. So my current count has this movement as B Wave from 7822 to the top of the 5th wave at 8200, after which Wave C would begin retracing close to the end of A Wave at 7820.
8200...and then some.
Updated count...still heading down C Wave
Current outlook...she's so bullish she just doesn't want to come down...
An ABC correction was anticipated at the High of 9040...
My count had the sideways corrective as a XWXYZ for Wave 2 of Wave 3...