I think we are at the beginning of a new uptrend cycle in BTC . The weekly uptrend is still in place, and the daily downtrend (using bitstamp data) has expired. I will be looking for a move above ~$4190 to confirm, and am waiting to add larger margin positions (holding mainly spot right now).
Chart is based on methods learned from Tim West and Ivan Labrie.
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This downward move is reminiscent of the selloff in mid-July. Seeing a similar upward bounce would put us back over the weekly mode, from where I would feel confident entering larger margin positions.
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NEO looks phenomenal here. It's price is, as Ivan puts it, a good barometer of the Chinese crypto market sentiment. Strength in NEO here is indirectly bullish for BTC, given that the recent selloff was largely catalyzed by the China news. Now with Charlie Lee seeming to be correct (again), and rumors of Chinese exchange licenses coming out, the looming bear market may be temporarily avoided.
This aligns with the last update, showing that the recent correction was proportional to the previous correction ($1,800), after which bitcoin rallied to new highs.
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I meant to update this sooner. Bitcoin had been acting bullish and broke above the $4,190 level (I have moved this level down to $4,169 - I think it is very bullish if we hold over this price). At the very least I think we will rally to the previous high at ~$5,000. This bounce has been progressing slower than the last, and understandably so. The last bounce and rally was catalyzed by SegWit activation and a (temporary) resolution to the scaling debate.
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Another uptrend signal triggered here. Target at ~$6920. It is possible to see a long term top in the red area ($6120 - $7195). At this price level I will look to take profits and reduce the size of my crypto account.
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I'm out of all bitcoin. My mentor, Ivan, raised many good points and ultimately convinced me to sell.
We've hit long term targets and are approaching uptrend expiration, many bears have finally given up shorting and turned bullish, and both the weekly and daily ranges are decreasing.
It is logical to wait in cash for at least 3 days.
Interesting that many others feel we are heading for the classic bull trap, but you hold the opposite view. What are the indicators that give you most confidence in your forecast? I notice you say you'll monitor to see if we go above $4190. Could we not exceed that level and still hit a large correction, as some have called it "wave C of the Elliot Wave formation", taking us down to the $2500-$2600 area, where this would be the real buy-in opportunity?
Bloobers
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@heisginger, Hi. Do you have a specific chart you are referring to? As far as I can see, a "C wave" would take us down near the bottom of wave 4 (~$1800). I'm no elliot wave expert, but haven't really seen it consistently applied with good results. Though I have seen really good-looking waves drawn in hindsight lol.
What makes me confident about this scenario: Much of it is based off of applying Time at Mode methodology, which I learned from Tim West and Ivan Labrie. It looks like China news is being shrugged off by the market and EVERYONE thinks this will ultimately be some sort of dead cat bounce. There's more than enough shorts built up to fuel another uptrend. This correction was healthy behavior after a 2 month expanded range upwards (even though it felt like the end of the world).
Again I'm not betting the house here, but I'm watching to see if we hit key "checkpoints" to justify my bullish outlook. I believe climbing over ~$4190 would be a very bullish event.
heisginger
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@Bloobers, Thanks for the detailed reply. As many on here, I'm still learning the ropes and as you say find the EW analysis a bit of a can of worms. It's confusing at the best of times, and knowing which pattern you are seems tricky even for the experts.
Re direction, you only have to look on this web page to see there are more traders claiming they are short than long currently, but i agree such as stance is not without risk, and may prove erroneous. I was thinking of increasing my short position if it breaks below around $1840-1850 over the next day or so, while putting a SL around 4175-4200. I'm still bearish generally given the breakout of the up trend in a narrowing triangle to the downside last night, and on aggregate after looking at some ten different pieces of analysis.
My understanding is to never mix TA with other analysis, but clearly a major news event or five can kick us in a new direction. The correction was due anyway, and Dimon, ICOs, exchange closures were enough to accelerate the correction. Long term I'm bullish and hold BTC separately to avoid the headache of trading!
Hindsight is a wonderful thing, if only it were available before the event!
Cheers, C
@heisginger, Interesting how little price reacts to such news. I'm not sure what you mean by "never mix TA with other analysis". TA alone will always give an incomplete picture imo. Haha yea I think everyone who's ever traded has fantasized about being able to "see the future"