BTCookieMonster

Bitcoin - Your Hopes. Dreams, Nightmares, & Fears

BITFINEX:BTCUSD   Bitcoin / U.S. Dollar
First, I would like to thank you for taking the time to read this analysis, and second, I would like to clearly state that I am not an expert by any means, I learn every day and if I have missed anything of constructive importance please feel free to let me know in the comments section.

To begin with, the Daily chart below shows my current count. I have had multiple counts, but let’s be honest, who hasn’t? Right now, this count makes the most sense to me, as prior to the break below the long-term trend line I was just as confused (admittedly) as everyone else.

The reason that I am more inclined toward this count is that the move from 6450 to 9990 was an impulse wave (by my count), and it was not until after breaking below 6450 that I began to see many analysts change their count of that movement from an impulse to a corrective wave. That change more aligned with their view of the moves from the February low to the break below 6450 in early June as a Triangle in Wave Theory. To clarify, not once have I ever considered that movement to be a triangle nor this entire correction to be an ABCDE, and my posts confirm this. As it currently stands, in my opinion, it is very difficult to view as such still.

In the chart below, we can see that BTC has bottomed within the very same range each time throughout the correction.


Adding in a Fibonacci Retracement tool from the Bitfinex ATL to the ATH we can see that this range coincides not only with the Daily Candle of 11/12/2017 but it also is quite perfectly within the Fibonacci Golden Zone between the 0.618 and 0.786 levels. Going back to the count I have in the first chart in this series, there is still room to fall before reaching the terminus of Wave 5 of Wave, the reason being the low of that daily candle, or more easily seen on the 3 Day Chart posted below. The sideways movement BTC is currently in would be Wave 4 of 5, by my count. As such, I am still expecting a test of the low $5398 before a major reversal can be considered.

The above chart also more clearly shows the movement from 11600 down to 6450 as an ABC , aligning with my theory of the correction thus far* being an ABC Zigzag . The movement from the February low to the high of $11,800 was Waves 1-3 and the movement down and up to $11,600 was Wave 4 and a truncated Wave 5.

The range in which BTC has bottomed falls within the previous Wave 4 of the impulse leading to the all-time high at nearly $20,000 (below).

Taking volume into consideration we can see that it has steadily decreased since the beginning of the correction in late December of 2017 (below).


Also, of note, as seen in the Daily BLX chart below, is the lack of savagery in the selloffs. The massive drops in price that were immediately wicked up have become less frequent and drastic. This, along with the decreasing volume and bottoming range lead me to believe that BTC is nearing a bottom. * It should be noted that at the end of the major corrections in August of 2016 and 2015, Bitcoin trended sideways for roughly 6 weeks.


Another indication of a potential bottoming and major reversal in the works is the Godmode indicator having fired long, on 6/18/2018, for the first time since the beginning of the correction on the Weekly chart (below).

But for reference, during the 2014 correction, BTC continued in a downtrend for nearly a year after Godmode first fired long (below).

Of importance is when the lines touch, which is the actual entry signal:

2014 Above

Comment: Currently, the Godmode indicator lines are approaching a touching point (below), but a significant drop could change that and be a signal of this current wave down extending further.


Now for those of you that are satisfied with this, stop reading now. For those of you that are not, and especially those interested in the asterisks (*) that you have seen in this analysis, the rest is for you.

As many have alluded to and charted to the point of beating a dead horse with another dead horse, many are calling for $4k trying to compare this current correction with the correction of 2014. That being said-
THERE IS ABSOLUTELY NOTHING IN THE TECHNICALS THAT POINTs TO $4000 BEING A RANGE OF SIGNIFICANCE FOR BITCOIN (bears will want to keep reading just as much as the bulls). As seen in the chart below it is a range within the Wave 2 correction in the 5th Wave impulse up to the ATH (and only part of it at that).


If anything, it is the previous correction (below) that should be of significance which bottomed at $1826.

But don’t freak out just yet…stay with me…

The 3 Day chart below is my count of the 2014 correction, which I do not see as an ABCDE (very uncharacteristic of a Wave 2) nor an ABC, but rather a Double Zigzag WXY.


Below is a Daily chart of BLX, which contains the entire history of Bitcoin.

Add in Wave Theory on the Cycle level…

Highlight the top of Wave III and bottom of Wave IV…


And if a corrective wave typically retraces to the Wave 4 of previous degree, then, when it comes to BLX we are looking at quite a bit lower than $4k. And, one should never underestimate greed. $10,000 proved rather difficult to cross, and $12,000 will be even more difficult. We have heard that all the big money and financial institutions are waiting to get in at rock bottom, and I don’t think this is it here at $6000, especially after all the talk of sub $4k and the like. Let’s also not forget the “I’m looking for a multi-year, extended bear market…” that the perma-bears have been calling for. So with that all together, this is a major possibility of what I see happening:



Tighten it up a bit and then it starts to look like the BTC corrections throughout its history…only of appropriate magnitude.

This would be another Double Zigzag WXY, letting a lot of people underwater get out at the $12k mark, big players and traders will see it as a perfect shorting opportunity, and at that point many new people will have fomo’ed into the market. The concern is, will Bitcoin be able to survive that crash (continued though it may be) or does it die a slow painful death as some have called for?

I would prefer this didn’t happen, honestly, but this is technical analysis. The telling point will be what happens after $12k. BTC could continue to go up, only having gone through a simple correction, or it can continue down. We will all have to wait and see.

This is objective not subjective, so, remember: It’s YOUR money. YOU are an ADULT. Make YOUR OWN decisions. DYOR.
Comment: Many have been calling for the next major move up to be a stratospheric, destroy the banks, lambos-to-the-moon, one big green candle to John McAfee’s open-bar BBQ party…even I did…but the real question I would like to pose is this:
When does a Cycle correction make more sense to take place? Now, even after an 80% retracement, with institutional money only beginning to dip its toe into the crypto waters, or, after the proposed next wave which would flip the entire worlds economy on its head, making millionaires out of all the early adopters, and making FIAT about as useful as a beverage coaster? And what will cause that major next wave to the Moon?
This is a serious question and I would love to see your answers in the comments section.
While the stock market is benefitting from an artificial inflation from corporate buybacks and tax cuts to the uber wealthy, and all crypto adopters would love to see it all come crashing down, it does not look like this will be happening anytime soon, at least not yet. There are talks of trade wars and a world banking crisis looming, but not yet. European, South American, and Asian countries with economic woes and devalued currencies, but the money is not flooding into Bitcoin as fast as many hoped. And we can come back to the financial institutions that we are all desperately waiting for to infuse billions, if not trillions, of dollars into Bitcoin and crypto to make our dreams of upturning the applecart true- but, where are they? And, please, don’t reply with “Not everyone lives in America,” because that means you are not thinking correctly about the global economy.
The truth is they have no reason to bet on Bitcoin in that manner, just yet. They just got everything they could ever dream of (aside from the trade war talks) in corporate and 1%-er tax cuts. They will juice the stock market for every penny its worth- but like always, those pigs don’t know when to stop feeding, and the market will come crashing down. Guaranteed. It is just about when.
“I’m in it for the tech!” Does not pay the bills. Do you think those big financial institutions are “in it for the tech?” Don’t kid yourself. They are in it for the MONEY. I am in it for the MONEY. And until that old, serf-creating system comes crashing down from the over bloated weight of its own greed, then you too should be in it for the MONEY. That is what would be called a CATALYST, which is exactly what is needed, and of the magnitude required, to make any crypto, let alone Bitcoin, the global currency.
Comment:
Compared to the chart I posted initially, the blue line is starting to drop away...signalling a continuation of the downtrend...
Comment: Godmode on the Weekly is now showing and entry signal (blue line meeting and crossing the purple line on individual exchanges:

Coinbase


Bitmex


But net yet for BLX
Comment: Bitfinex showing buy
Comment: After the Daily close on 7/2/18, BLX on the Weekly signaled Buy Long on the Godmode indicator


RSI on the weekly is continuing in a rounding bottom; MACD Histogram is rising, MACD Line coming to a rounded bottom


"In a falling market, a tweezers botto, is made when two or more successive lows are the same. The tweezers could be composed of real bodies, shadows, and/or doji. Ideally the tweezers should have a long first candle and a small real body as the next session. This shows that whatever force the market had on the first session...was dissolving...tweezers tops and bottoms on the weekly and monthly...could be important reversal patterns. This would be true even without other candle confirmation because, on a aweekly or monthly chart, for example, a weekly low this week that successfully holds last week's lows could be a base for a rally." - Steve Nison, Japanese Candlestick Charting Techniques, pg 87.


The real body of the second candle in the formation is within the real body of the previous candle, akin to the Japanese Harami pattern, and the entire range of the second candle is within the range of the previous candle range, as in the Western Inside Day pattern. Both signs of exhaustion of the previous trend.
Comment: A look at the movement from the past 5 days shows a 5 Wave structure completed, or nearing completion


With Godmode on the 4 Hour firing short, and looking back at the short fire on 6/19/18, we can see the significance of this signal.

I would expect a strong retracement of the 5 wave impulse, potentially 99%, with the strong bearish sentiment still in the market, similar to the retracement to 6450 after the move up to 7509 (below)


A retracement to the 0.886 level (if not a double bottom) and a continuation of the reversal would be the bullish scenario


The bearish scenario would be that this impulse is C wave of Wave 4 with a bottom at the 5511 price, if not lower.
Comment: ****The 2 charts with the counts in this update are incorrect- the Primary count of the correction is an ABC, not WXY but the bottom range is 5398.
Comment: Below is the correct overall count, showing the bearish scenario, with the current impulse being Wave 4. Volume must continue to increase throughout the week to sustain bullish momentum.
Comment: And here is the other scenario I discussed earlier in this post (nothing has been moved)
Comment: Bitmex 1 Hour
Comment: Now we have a clear 5 Wave structure with Wave 5 currently within its 3rd wave





I am looking for this impulse to complete itself near the close of the Daily on 7/5/18, and I expect a very deep retracement to a double bottom or a continuation of the downtrend
Comment:
Comment: BTC has met strong resistance leading to the 6700 level, with three consecutive days of indecision candles


The move up was only able to cross the 21 Day Moving Average on declining volume, as opposed to the move from 6450 to 9990 which had force and increasing volume behind it


Godmode is coming to a bearish top on the Daily


Below we can see what has happened during this downtrend every time Godmode has signaled bearish
Comment: Spent a lengthy amount of time reviewing the count of Wave 5 last night, looks to have been completed prior to my previous update:



Below is my overall Minor Wave 4 count


Wave 5 looks to have already begun


4 Hour Godmode fired short on 7/3/18...looking towards the 5400 area now
Comment: Here we go...
Comment: Godmode on Daily crossing- bear/short
Comment: Current local count
Comment: Updated local count
Comment: The close of the Daily candle of 7/5/18 closed higher than the previous days real body high but failed to make a higher high for the day, hovering just above the 21 Day Moving Average with a continued decline in volume



4 Hour Godmode should touch within the next 8 hours in a bearish cross; the 4 Hour also shows that the price reached the high of the Valuer Area using the Volume Profile (Visible Range)



MACD Histogram is declining and history shows that nothing good comes from this


And I am also seeing the seahorse/llama pattern repeating itself in the RSI, coming to the end of the pattern, after which a hard drop has always ensued


I have adjusted my local count; I believe that this is a better plotting of the corrective wave that I believe BTC to be completing before continuing down
Comment: Morning update: Bearish Divergence on the Daily
Comment:
Comment: And now things have gotten very interesting...
Comment:
Comment: Updated possible local count
Comment: BTC failed to break the previous high at 6868 and now finds itself at a 50% retracement from the move up from 5743 to complete what I have plotted as Wave 4 of C Wave of the 2018 Correction. 4 Hour chart shows plenty of room to continue dropping on the MACD while still in the midst of the Short signal on the Godmode.


On the Daily BTC lost the 21 Day Moving Average support...


The 6100 level will be a key bounce target, right centered within the Fibonacci Golden Zone; still looking toward 5400...
Comment: Two days into the Weekly candle and it is a Bearish Engulfing so far...
Comment: Daily Godmode still trending down, without a Long watch signal or Bullish Cross for quite a while having plenty of room to fall...


MACD Histogram on the Daily still descending; a few more days of this will bring a Bearish Cross on the MACD...


The bullish movement that occurred the past week and a half did so with declining volume (bearish); 21 Day Moving Average now resistance at a major resistance level (yellow line).
Comment: Would anybody care for some Bearish Divergence?
Comment: Some of the charts in this update should have been posted here earlier, but for those of you that do follow me on twitter (@juni0rlancaster) you have seen that I did post them prior to many of the moves they imply.

Prior to the drop I was looking at the resistance levels building on the bear flag at 6368 and the resistance from the Daily candle in Mid-November shown in the second chart above this update. Consequently, and to the dismay of those thinking that an Inverse Head & Shoulders was in play (more on this later), BTC dropped to 6122 before falling again recently to 6065- 6065 falling right smack in the middle of the Fibonacci Golden Zone between the 0.618 and 0.786 levels that I have been looking at for since my update a week ago.





As I posted on twitter, early yesterday, I was looking for a Bearish MACD Cross by the Close of the Daily Candle on Friday 7/13...



... but as we began dropping this morning I tweeted that that cross may come as early as today's Daily Close, by which only a hair separates them...


...And the 21 Day Moving Average which was acting as support at the high of this move (with declining volume as the price rose- bearish), it now acts as strong resistance.
Comment: As for the Inverse Head & Shoulders, I recommend everyone to be familiar with Thomas Bulkowski's Chat Pattern Website, as well as to obtain a copy of his Encyclopedia of Chart Patterns (also Technical Analysis and Stock Market Profits by Richard Schawbacker). These invaluable resources will show you that Volume CONFIRMATION is absolutely necessary when considering Head & Shoulders patterns. Volume should be higher on the Head (with a clearly defined Head) and equal or nearly equal volume on the Right Shoulder. It should also be that the Left shoulder be quite deep (inverse). In the chart below I have singled out the only candle for the potential.

The chart below has been drawn in the exact fashion as 90% of the IH&S I have seen people posting (except for the added arrows). To me it clearly shows that it lacks Volume confirmation for this pattern, most specifically at the "Head," of which this head is hardly a head and far more of a reach if anything.


If I sound a bit short (no pun intended) it is because I have received questions about the IH&S for days and my response has been exactly the same as I just detailed.

I am still bearish and looking for 5400 but I am seeing more signs of a bottoming in this area and will be posting an update on that shortly.
Comment: 4 Hour Godmode fired short two sessions ago; I expect a bearish cross within the next 12 hours, coinciding with the close of the Daily and Weekly candles.



The Weekly is currently above the low threshold for a Bearish Engulfing candle, but a Hanging Man will also be bearish...looking for a continuation of the downtrend with RED all week.
Comment: Here's what I see right now, locally...


Comment: This chart says everything...
Comment: Major Bearish divergence on this thrust up to 7500...


The $ hour looks primed for a significant pullback but I believe there will be one more run at 7500 first...


The Daily chart below shows there is still more room to drop in the value area of the Visible Range Volume Profile.
Comment: 4 Hour RSI is primed for a drop...


Major Hidden Bearish Divergence on the Daily still gearing up...


I have and updated count for Wave 4 of C Wave, which I believe makes a lot more sense...
Comment: Possible 5th Wave completion...


A close of the Daily below 7798 will spell RED for the weekend...


Advance Block Candlestick pattern on the Daily with Short signal on Godmode; bearish cross in the next few days could mean a double bottom or new lows...


And the looming Bearish Divergence is not reassuring to the bullish case.
Comment: I find this correlation very interesting...
Comment: BTC 4H is looking good for a long; Daily Godmode just fired Long near the 0.886 Fib Retracement level; Bollinger Band due for a bounce here; MACD on the Daily beginning to curve up with the Histogram flattening; Corrective wave with a potential target of 6800...


Comment: Lets Go...
Comment: $BTC has gained the 21 and 55 Day Moving Averages, a look to the left shows the outcome the last time this happened on the 4 Hour Chart; MACD and RSI also show an upward trend and plenty of room to run. Targets of Resistance are 6850 and 7200.
Comment: My current perspective on the situation...most importantly declining volume on this move since (a).
any updates on BTC Junior? Much appreciated as usual.
+1 Reply
@kitkat16, Just got home from a road trip a few hours ago and will be updating when I get settled in. For now I think we get a Wave 4 bounce up/sideways here (@ 6630) followed by a significant continuation down...update soon.
+1 Reply
kitkat16 BTCookieMonster
@BTCookieMonster, hey, looking forward to it :)
cheers
Reply
@kitkat16, If it doesnt hold here I am looking at 6k
+1 Reply
kitkat16 BTCookieMonster
@BTCookieMonster, cheers for the heads up :)
Reply
Just an idea...


But we could have also just started an ending diagonal as a 5th... I find it remote that we would be able to break all the resistance waiting for us at 7800, although I am hoping I'm wrong. More than likely we'll end up somewhere between 4800 and 5200 by end of September. Expecting full reversal in October.
+2 Reply
BTCookieMonster DennisLeeBTC
@DennisLeeBTC, I like the count, and agree on the rest as well
Reply
$=4 :) Agree
+1 Reply
Comment removed
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