BTC Consolidation Index continues to signal imminent bull run
Continuing from last time. The RSI uses a volume ma and is what I like to call the Consolidation Index, CI for short.
There was a check at the 7850 area support, purple line, with the subsequent slash right through it on increasing volume but it didn’t tap the trend line. The slight bump immediately after the slash was expected due to the steep decline and full price movement(look at previous movements in the recent past). You can notice this ‘tiny bump’ abnormality in the CI, where the most recent upside move paused mid movement and led to essentially a flat CI, briefly. This could be taken as an indication that the downside potential and downtrend strength is weakening. The bears had to have a (tiny) consolidation movement before they made that small next step toward the trend line, despite the momentum already being in place. As I was watching this unfold all I saw was peak negative news. There was only talk about Bitcoin reaching 5k or 6k. Historically, that means it’s time to buy. Stephen Bogart’s name was everywhere. After looking into him briefly he is reputable and intelligent. Someone who’s opinion shouldn’t be overlooked. Nonetheless the most recent downside wave didn’t result in a full extension to the next point of support but instead acted as a typical go-nowhere type wave that is basically noise.
The following is derived from a combination of support, resistance and trend lines that I’ve excluded for cleanliness. If you follow Elliot Wave Theory then the anticipated outcome should take the price up the path toward +3 and into a 5 wave uptrend break out pattern, showing that “The bulls are back in town! Yea, the bulls are back…” Thin Lizzy anyone? On the flip side, if this is a 5 wave downtrend pattern there are two outcomes depending upon just how strong the bears move it. Option 1 - bulls snap up the next resistance area at 6k and we run towards -4 +. The blue circle is no man’s land. I can’t make heads or tails of that area, if the price goes there. Then there is option 2 - capitulation, this brings it down to -4 at minimum and completes the overarching long term 3 wave retracement pattern from 20k. I hold the optimistic view of capitulation occurring at 6k, making a double bottom and subsequently bouncing back to check the 6k level. Again, that is assuming the green trend line is broken. That is as far as I can guess for now.
Now is time for the CI, Consolidation Index. It continues to see very small values within a small range, indicating solid consolidation which creates a setup a nice upside move. We are currently at ~73 bars. The previous smallest time for a CI setup was ~90 days. We are ~17 days away from that. The consolidation here is such high quality that this could be the shortest CI setup yet.
1) Weak downside movement toward the green trend line. It took an extra leg down to tap it. Bullish
2) Elliot wave theory doesn’t usually have much value to me but it aligns well with the current price action on both a breakout and breakdown. Neutral
3) CI index maintains low values and decreasing values for the first time. It has never maintained such low values over this long of a period before. Setup continues to look. Bullish
EOS main net is launching so anything could happen. That 2+ bottom at the green trend line occurs the same day that McAfee talked about, June 16. From what I have read people don’t want to sell at this level but buyers want a cheaper price before stepping in. There will either be 1) a strong breakout leading to heavy FOMO or 2) we are in store for capitulation on the next downside move that will create the bottom of this bear market. Load the boat fam!
There was a check at the 7850 area support, purple line, with the subsequent slash right through it on increasing volume but it didn’t tap the trend line. The slight bump immediately after the slash was expected due to the steep decline and full price movement(look at previous movements in the recent past). You can notice this ‘tiny bump’ abnormality in the CI, where the most recent upside move paused mid movement and led to essentially a flat CI, briefly. This could be taken as an indication that the downside potential and downtrend strength is weakening. The bears had to have a (tiny) consolidation movement before they made that small next step toward the trend line, despite the momentum already being in place. As I was watching this unfold all I saw was peak negative news. There was only talk about Bitcoin reaching 5k or 6k. Historically, that means it’s time to buy. Stephen Bogart’s name was everywhere. After looking into him briefly he is reputable and intelligent. Someone who’s opinion shouldn’t be overlooked. Nonetheless the most recent downside wave didn’t result in a full extension to the next point of support but instead acted as a typical go-nowhere type wave that is basically noise.
The following is derived from a combination of support, resistance and trend lines that I’ve excluded for cleanliness. If you follow Elliot Wave Theory then the anticipated outcome should take the price up the path toward +3 and into a 5 wave uptrend break out pattern, showing that “The bulls are back in town! Yea, the bulls are back…” Thin Lizzy anyone? On the flip side, if this is a 5 wave downtrend pattern there are two outcomes depending upon just how strong the bears move it. Option 1 - bulls snap up the next resistance area at 6k and we run towards -4 +. The blue circle is no man’s land. I can’t make heads or tails of that area, if the price goes there. Then there is option 2 - capitulation, this brings it down to -4 at minimum and completes the overarching long term 3 wave retracement pattern from 20k. I hold the optimistic view of capitulation occurring at 6k, making a double bottom and subsequently bouncing back to check the 6k level. Again, that is assuming the green trend line is broken. That is as far as I can guess for now.
Now is time for the CI, Consolidation Index. It continues to see very small values within a small range, indicating solid consolidation which creates a setup a nice upside move. We are currently at ~73 bars. The previous smallest time for a CI setup was ~90 days. We are ~17 days away from that. The consolidation here is such high quality that this could be the shortest CI setup yet.
1) Weak downside movement toward the green trend line. It took an extra leg down to tap it. Bullish
2) Elliot wave theory doesn’t usually have much value to me but it aligns well with the current price action on both a breakout and breakdown. Neutral
3) CI index maintains low values and decreasing values for the first time. It has never maintained such low values over this long of a period before. Setup continues to look. Bullish
EOS main net is launching so anything could happen. That 2+ bottom at the green trend line occurs the same day that McAfee talked about, June 16. From what I have read people don’t want to sell at this level but buyers want a cheaper price before stepping in. There will either be 1) a strong breakout leading to heavy FOMO or 2) we are in store for capitulation on the next downside move that will create the bottom of this bear market. Load the boat fam!
Comment:
CI pattern was completed with the spike in volume on the most recent drop. According to the CI, today is the time to buy; a couple days from now should be fine. Personally, I scale in and I plan to take the biggest chunk at this moment because this signal could still be wrong
Comment:
Looking back at previous setups shows anywhere from a few days to a hand full of weeks after.