Also I am ignoring all the positive and negative new developments and accept that I don't really know nor understand any of this.
Due to limited availability of price history longer term EW counts are near impossible. Therefore, it is possible as I have explained in previous charts publication we could assume Nov 2013 top as lager wave . If this is correct then we could have:
1. Jan 2015 low as possible wave and that we have started a possible expanding of 3-3-3-3-3 construction which could see retest of 2013 high or make marginal new high to complete the larger cycle of 5 waves (please see chart below for details).
2. as per No1. but that we are forming a contracting triangle since Nov 2013 high as wave as shown in the chart which means we could continue to chop about in tighter range till we complete this before breaking to upside to retest the Nov 2013 high or make marginal new high.
OR Possibly that we have November 2013 High as major top of 5 wave cycle
3. Then what we are seeing since is retracement of the entire cycle. Under this scenario we have Nov 2013 high to Jan 2015 low as 1st . Since when we have made a corrective to the upside with spike high in Nov 2015. If this proves to be correct then we could see another larger to the downside as illustrated on that chart. Based on AB-CD patter where we consider percentage drop from Nov 2013 high to Jan 2015 low and apply this from Nov 2015 spike high we get possible downside target of in the proximity of 65 which incidentally is also an area of wave 4 of one degree lower cycle often the area for retracement based on EW principle.
4. As per 3 above but with Nov 2015 spike high as being 1st part of the retracement to the upside where we could drop to 250 area and make another with upside target around 650 area as shown in the P&F chart below. Once the upside retracement is complete we could then drop in second at least to Jan 2015 low or make new low towards 65 zone.
It is interesting that Nov 2013 , 2014 proved to be spike highs of the cycle. Could Nov 2015 also be the spike high of the cycle and that we now continue lower as per 3 above? Time will tell. Once we have some clarity, I will republish chart accordingly.
Conclusion: Due to the length of time for correction and lack of counts to the upside, I am leaning on scenarios 3 or 4.
Warning: This is my interpretation of price action using TA approach that I consider helps me most but could be completely wrong. Therefore as always, do your own analysis for your trade requirement and ignore my views.
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The scenarios 3 & 4 are not only possible but looks more likely as there has been lack of clear 5 wave impulse to the upside which is the very basis of new bullish cycle development to the upside as I have explained several times before.
Conversely when they are unwilling to take additional risk they either take profit, withdraw or new money do not come along. For that reason I feel they have close correlation in the manner I explained. If this observation holds then you will note that BTCUSD topped in Nov 2013 (as the riskiest asset) where as equities being the least risky and supported by QE have continued to make new higher high and therefore could be flashing major bearish diversion between these to risky assets which suggest that equities could also enter the bearish cycle. Both traded by humans who inherently react similarly when trading assets that carry similar or comparable risk.
That is the only explanation I can offer for the high correlation between them.
However, as you study markets and Elliottwave principle you will see several connections. Just to give some examples of how willingness to take risk is reflected in variety of assets.:
consider that mega mergers normally takes place at around the major tops in cycle.
Many tallest builds are built or completed near major tops.
At auctions some silly items fetch all time multi millions dollar.
recently many conservative investment institutions like pension and sovereign wealth funds have decided to increase exposure to equities, like crescendo at the very top.
Major companies go into over drive in buying their own stock, specially now by rising long term debts on Bond market to back buy stocks. A feature often noted specifically at the top.
So you can see that what drives humans to take on additional risk and crowd behavior are specially prominent at the top as all caution is casted away.
Therefore, you should notice the same signature in Bitcoin.
You will see if you compare DJT and DJI both indices of big corporations and would expect them to move in lock step. But Charles Dow in his theory explained that non confirmation between them could be early signal of potential change in direction.
I think likewise non confirmation between Bitcoin ans SP500 has been notable when normally from the chart above you can see move in locked step accepting that due to variation in volatility actual amplitude of the move are likely to be different.
However, I agree that all in and all out is not necessarily best for trading as there are no 100% sure fire way of telling when trends are changing and how much.
Likewise the chart of PPCBTC is very hard to make any meaningful wave counts on but appear to me that it could continue to decline as per LTCBTC
Unless you drop down to smaller time frame but suspect it would still remain difficult to make sense ans the larger wave counts are not very clear. Sorry it is the best I can do for now.
Now, you say here your forecasts disregard any external factors affecting this asset class. I am not sure if you know this, but there is an impending hard/soft fork that is a HUGE systematic risk. it is expected to be resolved over the next 8 - 12 months. There is also the reward halving in July.
WIth both of these in mind, how does that affect yoour outlook?
I am vaguely aware of those 2 events and probably many more will surface. It is not possible to say how specifically they will affect the price in the intervening period. Any positive effect might be short lived.
For example regarding halving in July 2015, it is accepted view or at least promoted to say that it will have the effect of being positive to price action. It might do, however, if that was the case could many large players try to force the price down using any negative news headlines? Then mark up but rather than lasting new bullish trend only serve to disappoint and turn out to be only a retracement in general bearish cycle.
Just like many positive news flows in the past were short lived. Therefore, whilst they could be a factor to consider, would not matter or prove to be temporary bounces in the bearish cycle.
Conversely, I have outlined 2 possible scenarios namely, that of contracting triangle which could lead to strong bullish breakout or an expanding ending diagonal both of which could lead to retest the Nov 2013 high or even make new higher highs as explained.
Whilst either of the bullish price action in theory is the expanding diagonal is least likely and triangle is feasible and valid yet to me it looks like contrived. Therefore, I am overall bearish to 250 zone at least and it might give more clarification, but also willing to accept that we might have significant bottom in place in Jan low as an alternative.
Hope this helps.
Appreciate your note on previous halving and its effect on price. You could be right about this in June 2016. However, the previous ones took place in bullish cycle. We have not had it in bearish cycle, so it still remains to be seen how it will plays out.
It it does as you suggest it deed in the past then we could have possible triangle I outlines which could complete around that time.
Thanks again. :)
In fact I have often wondered, that if when halving comes in there is less likelihood of all small miners to continue in business. Only major players with scale of economy and resources to capitalise at low paying rate could survive. But then they are likely to hold on to their advantage and could well be holding out with existing technology as Mike Hearne seems to suggest. In that scenario many might decide to sell out before what they have mined continues to go no where or possible continue falling creating sell off.
But clearly all these competing factors are hard to envisage on the direction this all could take. So will faollow with interest. Thanks for your comments.
Also it on weekly time frame giving general direction ans possible range of the move. These should be used only for general outline as I see it based on what was known at the time of publication.
If I have suggested bearish cycle or move these do have retracements along the way as I am sure you would expect. I am sorry if it has disappointed you but cannot not give any more details or update right now. It is too early to tell.
So in the meantime 4 possibilities outlined still remains open.
Hope this helps.
However, if we develop any of the 2 bearish scenarios then we could spend a long time still completing this cycle, in which case speculating on the upside right now is not relevant.
Till we have clarity lot can happen in between. So best not to run ahead of ourselves, but let the price action validate which of the 4 scenarios is going to play out.
Besides the possible wave counts, what you have to wonder is, that so many are relying on weekly MACD and either reading is as bullish development or wishing it will be more accurately. However, this is a second time MACD is crossing its signal line to the downside on this weekly time frame, so where might it lead to?
Because if we have this scenario and MACD develops bearish momentum then you will be left speechless whilst considering the implication. Here is the chart:
- Like it or not bitcoin is directly dependent on health of our economy, in good times it rises due to appetite for risk but in bad economic times it loses its appeal
- Much anticipated pre-halving hype dies down and a lot of bagholders are disappointed while exiting
- Most of the overinvested and overleveraged bitcoin startups throwing in their towels and dumping their unicorn dreams
- Security issues that will cotninue destabilizing whole blockchain
- Emergence of better cryptocurrency technologies
- Politics surrounding bitcoin
- Serious government crackdown or ban
Bitcoin has short history and likewise many who trade it. They have probably not hears about Japanese Equity market which looked just like Bitcoin leading into 1990 when it topped. That correction could go on for a very long time. So will follow this price with great interest.
It is entirely possible. However, if is very uncertain right now as to whether the lasting low is in place or yet to come. If the damage done is not too great, then we could indeed have new bullish cycle, not sure about $10k though, but not impossible.
If the damage and other factors compound the situation then gradual drop and more sideways action to form foundation for next cycle could take much longer than many at present consider feasible.
So for now the priority should be in preserving capital by not over leveraging and acceptable stops to limit loss just in case the bullish momentum do not show up whilst not being too attached to the actual instrument.
Here is the updated chart.