Bitcoin Ready to Take a Shot at a New All Time High

BITSTAMP:BTCUSD   Bitcoin / Dollar
With the breaking of the top of this triangle we just completed Stage 2 confirmation of the non-limiting triangle, meaning that we are about to get a very violent leg up from here. Since the exact position of this non-limiting triangle is unclear it isn't exactly clear what kind of path this is going to follow but it will most likely be followed by another :3 pattern such as a zigzag , flat, triangle, or complex combination.

The two possibilities I see are that either:
a) This non-limiting triangle is an x-wave
b) This non-limiting triangle is the end of a double combination

Both are definitely possible based on the structure and progress labels that I have listed. Either the non-limiting triangle is an x-wave or the expanding triangle is an x-wave. The former is more likely because expanding triangles are more often found at the beginning of complex corrections than as x-waves. The implications, however, differ. If it is in-fact a double combination that means that we probably won't retrace more than 80% of the drop starting in 2014. If the non-limiting triangle is actually an x-wave then it is very likely that we will retrace all of the drop starting in 2014 because then it is a zigzag with a short c-wave             . Since at this point it could go either way I think it is best to just wait and see and try to pick a top when it gets closer to the end rather than setting a definitive target right now. It is also very likely that since this run up is going to be corrective in nature that it won't be a straight shot to the top like 2013             was, and there may be smaller corrections on the run up that would be worth hedging or shorting.

For now though, this break out is extremely exciting. We've had lots of false sell signals on this run up which have probably gotten a lot of bears trapped and kept out a lot of potential longs until this point. I think from here it is very likely that the market will start to push up much harder as we are now about to reach new yearly highs and people will finally start to realize that we aren't going to retrace. If all goes accordingly bitcoin should be worth at least double what it is now in the coming months.

Good Luck and Happy Trading!

Tips appreciated :)

It looks like the top of the triangle became resistance turned support, kind of like what happened with the A-C trendline back in October 2015, we retested the trendline and then had an extremely strong leg up from there. I am still pretty confident that this count is correct especially because at this point there really isn't any other possibilities that I can see that would make sense given the surrounding evidence. Also the fact that the decline was retraced so quickly is a good sign that it was an irrationally low price given the timing of it and it probably won't retrace that far again.

The lower timeframe count may put us in a wave 4 here so we could possibly go sideways. Hard to say what is going to happen in the shorter timeframe but there isn't a reason to change the longer term outlook yet. If we end up getting a much more significant retracement of this rise that isn't quickly retraced itself then it may be time to declare this count invalid.

For now though, it is still valid and I can't see any reason to declare the higher timeframe count invalid yet.
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LTC on the daily timeframe has confirmed the c-failure flat wave 2. There is also an exception on the lower timeframe on the BTC chart indicating that this is likely a significant turning point and an x-wave is unlikely to develop. For now it looks ready to start trending up again, especially LTC which appears to be leading BTC with the confirmations, BTC is still unconfirmed but I am fairly confident that it will follow LTC in confirming the c-failure flat.

C-failures do indicate quite a bit of counter-trend strength so the following wave should be at a minimum 1.618 of wave 1 on both BTC and LTC.
Trade closed: stop reached:

It looks like the c-failure flat count is invalid so I stopped out and I am gonna wait and see how this plays out. It looks like this is probably the end of wave b of (2), so we should get wave c down before we finally finish wave (2) and get our strong leg up. The larger counts are still completely valid so there is no reason to become completely bearish yet, however, I would definitely wait until a more complete c-wave forms before going long again.
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A bit late with the update but it does look like this is a confirmed break up. In the shorter timeframe we might be in a correction right now but I think after this correction resolves it should continue advancing towards my target.

BTC was a direct hit on my short-term price target, but the time was much faster than wave 1. This doesn't necessarily mean that wave 3 is not over but it definitely means that it could be because of how much momentum it has so far. Also LTC has not really went as far as you would expect for an irregular correction, ie. 1.618 or more of the preceding impulsive wave. Given the above evidence I would assume that this has more upside left in it, and that we are currently in only a minor correction so wave 3 could potentially go higher before we get a much larger wave 4 correction.

All the evidence right now is pointing towards this being the beginning of Wave 3 of 3. There are multiple reasons for this count, first of all LTC and BTCUSD did not go far enough to meet the required implications of the correction the preceded the last impulse up (should have went >1.618 of the first impulse), however, it DID meet the expectations for Wave 1 of 3 (it is about equal to Wave 1). So its more likely that the last impulse up was only part of wave 3 and not all of wave 3.

Secondly, the channeling here is exactly how you would expect a running correction or running double three to channel. It was also misinterpreted as a terminal and a double zigzag.

On LTC there are perfect time relations between Waves a and c, and I can see a very nice impulse wave c count on the lower timeframe.

Lastly, the Expansion of Possibilities states that when there are multiple acceptable interpretations of a count and it is in the middle of a pattern it is mostly likely about to begin a wave 3 of 3 (in this position).

With the brand new quarterly futures being pushed so far into contango by the market makers this morning i suspect that we are about to begin a major leg up from here.

After doing a more detailed structural analysis of the weekly chart I have come to realize that the count I have been following for the last few months is actually not completely correct. It appears that we already had our first impulsive wave up back in November and that we are in the midst of a large wave 3 already. This means that based on my other counts we are about to start wave 3 of 3 of 3.

It also means that we are very likely (almost guaranteed if this count is correct) to break the previous ATH.
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+1 Reply
Great analysis on bitcoin, thanks for sharing!
Do you know what kind of a correction we might see in bitcoin price, after this surge? I'm looking to buy in.
Thanks in advance
Intuit PRO KenzoMorsa
Nothing too severe, its hard to say really but given the upside momentum i wouldn't expect prices much lower than this if its going to continue going up. Probably around a 38.2% retracement of wave 3 whenever it is completed which may or may not be right now, but if you see the update i just posted It's probably not over just yet so this could just be a minor correction.
+1 Reply
Well done, thanks. If you don't mind, I really no nothing about EW, but I made this a while back for LTC/BTC
LTC BTC totally ignorant elliot wave analysis...
do you think there is anything to it? If its totally wrong, how would you do the count? Would love to see you make a chart for ltc/btc with potential targets, looks like it's starting to ramp up again.
Intuit PRO btc_joe
There are a few problems with that count, for example, wave 2 and 4 shouldn't overlap in a trending impulse. also there is no extended wave in the impulse. Also the timing of Wave b seems off. I definitely would not count it that way.

I did try to count it myself and I couldn't really figure out anything conclusive though but just off hand we may be in some kind of large non-limiting triangle. There really isn't enough long-term information to make any sort of solid conclusion right now with LTCBTC.

Gotcha, thanks a lot I appreciate it.
Okay. I had it completely wrong. LOL. Thanks for clarifying. :)
I've been following your stuff, bro'. Just curious if C exceeds A (which I believe it did yesterday) does that make this a zigzag now?
Intuit PRO WhaleBearPig
Hey man, it does not. The determinant for whether or not something is a Flat or a Zigzag is actually how much of Wave-a is retraced by wave-b. If it is greater than 61.8% it is a flat, if it is less than 61.8% it is a zigzag, the length of Wave-c relative to Wave-a only helps to determine what type of flat or zigzag that we are in. Also it's depending on which exchange you are looking at because the bottom of wave-a hasn't been violated on all exchanges yet.
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