2) Elon Musk's tweet was interestingly timed, but does not explain BTC's drop in the last 24hrs. Technicals come first. News provides narratives to explain what has already happened and is inexorable on the price chart.
3) I see BTC as completing a seven-wave structure to its parabolic peak. I continue to hold this macro model as valid, until price action proves otherwise. Factors that could invalidate this model include a dramatic wider stock market crash. Keeping an eye on the S&P and the DXY charts is advisable.
4) The correction that started 14 April is Wave 6 down in this macro structure. Wave 6 should be deeper — in percentage terms — than Wave 2 and Wave 4.
5) That the correction that started 14 April (Wave 6) didn't significantly exceed — in percentage terms — the correction that started 21 February (Wave 2) has given me pause as BTC has ranged for the last month. BTC cleared the 0.702 Fibonacci level on the retrace, but didn't clear the 0.786, which would have been a definitive signal that the correction was over. Nonetheless, that BTC reached the 0.702 should, probably, be seen as a sign of strength.
6) So it now appears obvious that we're seeing an ABC movement. The question is, where will be the base? BTC appears to be repeating the same crash structure that started the April correction. (This fractal is marked with a box on the left.) If we simply copy that fractal, this gives a possible downside target of 43.3 to 41.9k. Further, if we place a Fibonacci and align yesterday's wick down with the 0.786, which marked the way to find the base of the A Wave of 14-25 April, we get confluence on the 43.3k zone.
7) In the short term, we can expect BTC to reach up to the 51.5-53.0k price range, corresponding with the 0.382 to 0.5 local Fibonacci. That is, if the 14-25 April fractal is repeating. From this local peak we can expect, or at least prepare for, a range followed by a drop and possible double-tap on the 43.3-41.9k zone. This will likely take a week to play out.
8) The question at that point will be whether BTC has found the bottom of its present macro correction. My view, so far, would be that it had. But the breach of the weekly 21 EMA is concerning in this regard. In previous bull runs, BTC has tapped that EMA, but ultimately found support from that EMA. Dropping now to 43.3k would put BTC below the weekly 21 EMA, which generally BTC has done only after its cycle peak.
9) Despite great performance on the part of some alts recently, I don't think we've yet seen the full-blown rotation that alt season would suggest. So while it cannot entirely be discounted that the recent 0.702 retracement BTC printed on the 14-25 April A Wave correction is in fact the retracement rally of a cycle top, I lean towards the April-May correction simply being the last major correction before the seventh wave to the cycle top, at around 80k.
10) The real question, for me, is whether there will be enough buyers at 43k to push BTC strongly into its seventh wave. I also wonder what news will emerge to explain that upward momentum, if it happens. The bearish scenario is a further climb down from 43k after a period of ranging between 46 and 54. If this happened, we'd be back to square one and really have to look at everything again. What is happening currently with the S&P is likely to have a bearing. Everyone is aware that the market is in a bubble, and that MMT is laying down the perfect conditions for a wider market crash. Will BTC peak before this happens, or will BTC's bull run be a victim of this wider economic dynamic, the reasons for which is a matter for speculation, but could include a purposive economic meltdown on a global scale.
Feel free to comment.
Comment
⋅
13 May 2021 19:31:25: Seems that this move is happening faster than the April fractal. The 34 weekly EMA, which would be the next major EMA down if the 21 is broken and not just tapped currently sits at 35k. On the other hand, if the double-tap comes so swiftly, we might see several taps on the 21 weekly EMA, establishing a base at around 46.5
Comment
⋅
14 May 2021 20:33:17: First test incoming to see if the fractal is repeating. Looking for an imminent drop to 48.5.
Comment
⋅
15 May 2021 09:52:37: 43-41k is a large range, so I wanted to look at this again and see if I could narrow it down and find confluences that might better hone in on one final base level for this C Wave down. Obviously, this is still guess work. What I did was to examine the chart using Bollinger Bands, the Ichimoku cloud, various EMAs, SMAs, Fibonacci extensions and levels, and demand and support zones on multiple timeframes, from the monthly through the 10-day, 9-day, 7-day, 4-day, etc. In grey on the price axis are the range of possibilities, but in white is the one that for me, currently, has the most confluence, coming in at $41,500. It continues to appear that this is happening faster than originally projected. I will try to do a wave count on the lowest timeframes.
Comment
⋅
15 May 2021 10:33:00: Scratch that on the timeline. It may actually be taking slightly longer. Possible final low coming in 21 May, or this next Friday, with the next major drop coming in on Tuesday, or 18 May. That is, if the fractal of late April is repeating.
@dRends35, Thank you for posting. You could well be right. I've looked into Elliot wave theory, but I haven't had the time necessary to fully digest it and more importantly accurately apply it. I can tell that getting that down would take years of chart analysis. I haven't had that time, and largely I'm finding my way in the trenches of trading, particularly on very low timeframes. As well as seeing Fibonacci levels often respected (let's say, more often than not), outside of reversals, I'm seen seven-wave patterns all over the chart. Sevens within sevens, all the way down. You think a base has come in, only to find a larger seven is being printed, etc. I don't know how this relates to Elliot wave counts. There is tremendous complexity there, and I looked into auto-count interfaces like Wavebasis, but this didn't really help, in terms of resolving uncertainty. Had the same experience with Motionwave, though this was slightly more helpful. My main reason for thinking 80 is still possible is based on a 4.386 extension from the retracement rally before capitulation in September 2018. But that's just a projection, and who is to say those prices will ever be paid in this cycle. The inability of BTC to break through and clear 60-65 is obvious. I wonder if a massive liquidity grab now (which is basically what a correction is) will change that. I'm sceptical, and in many ways on a knife edge on this question. I hold to 80 so far, but I'm only 51% convinced, and that's on an optimistic day. Set BTC within the wider economy, and I lean towards a more dramatic and bearish outcome.
dRends35
⋅
@ianrdouglas, I really like EW software, although it can be excellent just after an event and confusing before. It really shows the many permutations. EW is complicated and I think it has to be grounded with more simple techniques, such as volume decline and RSI momentum have been a big tell since the start of the year. 20Wma and W MACD all seem to say the same thing. I have a very bearish outlook currently, partly becuase I think a Supercycle wave 1 top may be in.
ianrdouglas
⋅
@dRends35, I agree with your analysis. But I think Wave 5 is not yet in.
dRends35
⋅
@ianrdouglas, You could be right, but if its a wave 4 currently it is very strange looking.
goraxes_
⋅
Great analysis! Your deep analysis aligning with the simplest idea of 42k is the support since that was the last high is pretty good looking. Considering the 21MA, I also wonder if the '21 bull-run will more like be '13 than '17. What do you think about a double-top scenario like that?
ianrdouglas
⋅
@goraxes_, Thank you for your kind words. Bitcoin's market history is incredibly complex, and even more so the whole of cryptocurrency. I struggle to wrap my head around it, as well as all of the detail that happens within it. We are, however, in my view, dealing with complex patterns, and patterns within patterns, in serial fashion, all the way down. Given this baseline, fractals, in fact, are important. They cannot alone tell a whole story, but combined with other approaches (whether Elliot waves, or any other wave analysis, along with Fibonacci sequencing, and standard support and resistance analysis) they can be guides. The 2013 bull run peak reached out to the full fractal of the 2010-11 bull run peak. But the 2017 bull run peak did not reach out to the same extension, if we use the 2013 bull run fractal and move it up. However, 2010-11 was a two-peak cycle. And it's at least arguable that this is mirrored in the 2010-11 fractal. Moving forward, I think we're seeing now the second peak approaching where the 2017 bull run top is the first. In that sense, 2017 and 2021 taken together is a repeat of 2013, which itself was a repeat of 2010-11. So what we have, in fact, is three two-peak cycles from 2010 until now. I'm projecting the second peak of the cycle we are in at around 80k. This aligns to the 2013 fractal, and also Fibonacci sequencing that would take an essay to explain. Where we are, exactly, in the cycle, is what is important. Earlier, I was thinking November 2017, in the sense of its equivalent now. But it may be that we're in September 2017, or even July 2017. The wicking below the 21 weekly EMA is significant. In 2017, that happened on those two months. However, I have really thought until now that we're far closer to the blow-off top than being two to three months out. For BTC to reach its peak at all depends much on what is happening in the wider economy. So I'm watching the DXY, the S&P 500, Yellen, Powell, and all manner of moves that appear to be underway in the sphere of political economy. Also, how long can the BTC Dominance chart sit at 40% or below? In reality, I don't care about BTC. I watch BTC to the extent to which it curtails or allows a full-blown alt season, which is the primary reason I'm here at all. So, for me, the sooner the top comes in, the sooner alts can go on a rampage, and the sooner I can exit. Thereafter, I do expect a -83% crash of BTC, and a multi-year bear market. I know people talk of 200k, 300k this year or early next. But I plan for 80k and an alt season take-off then. If more comes, great. If not, I'll have made my play already as the bear market kicks in.
goraxes_
⋅
@ianrdouglas, Your pattern makes a very strong point here. I've never thought of looking at the cycles this way but it not only makes perfect sense, but could potentially explain many of the phenomena I was wondering about lately. If it worked like the way you explained that is an invaluable insight to price patterns. Thus I much appreciate your answer. Being in '17 July- September is an estimate I was playing with too. I completely understand the point where you are coming from and as I see the alts-market has a tremendous opportunity for trading, so I really look forward reading your analysis during those time as well.