DanV
Short

BTCUSD - Outlook for 2016 -17 with 4 possibilities

BITSTAMP:BTCUSD   Bitcoin / Dollar
NOTE: Please keep in mind that just because I have drawn particular line or suggested a target does not mean I will cause the price to follow that path. I say this because many appear to have religious like zeal for BTCUSD             to move forever upwards without any retracement where suggesting anything else is a gross sin.
Also I am ignoring all the positive and negative new developments and accept that I don't really know nor understand any of this.


Analysis -
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 ending diagonal 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 zigzag . Since when we have made a corrective zigzag to the upside with spike high in Nov 2015. If this proves to be correct then we could see another larger zigzag 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 zigzag retracement to the upside where we could drop to 250 area and make another zigzag 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 zigzag 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 bullish 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.
For those who appreciates my analysis, select to follow me and the chart for notification of future updates. Indicate you like my analysis by thumbs up, comments and sharing it with others. If you have an alternative idea then please be constructive and share for all to learn from.
Thank you for taking the time to read my analysis.

DanV
danv-charting.com
http://www.danv-charting.com
https://www.youtube.com/channel/UChJVIJir7nymD9J3ZWoal-w/feed
https://www.tradingview.com/chat/#E4bnOJSWcO1zDjBG
DanV MOD
a year ago
snapshot
Reply
DanV MOD
a year ago
snapshot
Reply
DanV MOD
a year ago
From bullish perspective the expanding ending diagonal whilst possible in theory is very rare and highly unlikely. So the only credible bullish count is the contracting triangle, though is looks contrived and little disproportional. But possible.

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.
Reply
DanV MOD
a year ago
Further with BTCUSD being very epitome of risk asset and therefore has a close correlation to SP500 in general direction and up and down swings developing within close proximity of time though not necessary in magnitude (due to different volatility) and SP500 potentially developing a major top supports the view that BTCUSD likewise could follow to the the downside. Here is the chart
snapshot
Reply
Csys DanV
a year ago
Any fundamental explanation why they have such a good correlation?
Reply
DanV MOD Csys
a year ago
Only that they are both stypes of risk assets. Therefore, when traders are willing to take additional risk for higher rewards, they invest in Equities and likewise in BTCUSD as the ultimate of risk assets class.

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.
+2 Reply
Csys DanV
a year ago
I must agree with that up to a point, since bitcoin should obviously be considered as one of those risk assets. On the other hand, SPX is too huge to be compared with bitcoin. It is backed by the big money in the street, and it is one of the strongest indicators of the US economy in its entirety. So, when SPX is rising, it means the largest funds and other institutions are paying attention to the US economy. They want to take additional risk, for sure, but this risk is fundamentally attached to the US economy, and not just one risk among others. And it is a bit absurd to think that all risky investments will get their shares from such an upheaval proportionately. I am not good at all at the fundamentals, and just speculating now. All in all, I am unable to give any alternative to your explanation.
+1 Reply
DanV MOD Csys
a year ago
I follow you on that.

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.
+1 Reply
Csys DanV
a year ago
Dow theory insight was really good! If a discrepancy between those indices indicates a reversal, then when the reversal is not in effect, we should expect them to move together.
Reply
DanV MOD Csys
a year ago
Yes indeed. In fact Dow close to confirming reversal by breaking below its respective low as shown in this chart

snapshot
+1 Reply
DanV MOD DanV
a year ago
Break below 16000 would be very significant.
Reply
leela.fame
a year ago
Thanks for the updates. Could you please have a look on LTCBTC and PPCBTC and see what are their outlook for 2016?
Reply
DanV MOD leela.fame
a year ago
LTCBTC spread chart does not seem to give any clarity, except that any bounces (probably not much) are likely to be retracements as it continue to decline.
snapshot


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
snapshot


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.
Reply
leela.fame DanV
a year ago
Thank you
Reply
Csys
a year ago
As far as I can see, BTCCNY gives clearer pictures than this pair. I prefer the bearish scenario. Let's see which way it'll take.
Reply
DanV MOD Csys
a year ago
I understand that it might appear that way, but overall it should not be much different except the currency variation could alter the picture to some degree. Looking at BTCCCNY it appear that it could drop to 1600 even just as retracement to the downside, though longer term analysis is difficult as it does not have longer price history. Here is what I mean.
snapshot
+1 Reply
mic.kimani
a year ago
Thanks DanV for your wisdom. I know a lot of people often criticize you, but I am a big fan of your forecasts.

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?
Reply
DanV MOD mic.kimani
a year ago
Thank you for the compliment and question.

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.
Reply
Ero23 DanV
a year ago
The Halving is going to happen in late June 2016 not July 2015 (i'm guessing this was a typo). Looking at the previous halving event, the price of bitcoin was affected dramatically - it took for to retest its previous ATH of $32 and then moved beyond that to over $100+ before the banking crisis in Cypress, at which point the price peaked at $250+. I think a move of similar magnitude is in store for Bitcoin and will take many traders by surprise, the same way it did in early 2013.
Reply
DanV MOD Ero23
a year ago
@EdwinRosero , thanks for that correction. It was a typo.

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. :)
Reply
mkliethe PRO DanV
a year ago
And if the having doesn't create a bullish scenario? May fuel the dump to under $100.
Reply
DanV MOD mkliethe
a year ago
@mkliethe exactly. Also in that event we might not have "V" shape recovery even then. It might take multiple years to build the base assuming it survives in present form.
+1 Reply
Ero23 DanV
a year ago
Thanks for the reply. I appreciate your analysis! - I've been thinking to myself that maybe it's accumulation not exactly bear market? - it appears so from the hashrate anyhow ( we've been over the exahash barrier as of jan 2016). Miners have reason to mine as many bitcoin as they can now before the reward halves and more work is required for the same bitcoin. This plus global financial stability might also trigger some major demand for this technology through out 2016-2018. Will be interesting to see this market develop during this halving era. Thanks for all the great work!
Reply
DanV MOD Ero23
a year ago
You are welcome.

You are correct, indeed there are multiple factors at play and only time with more price data will help to see how it resolve.
Reply
blackswan DanV
a year ago
that is correct, the bullish cycle was also easier to achieve since price was in double digits and you only needed less capital to move one leading market and make others to follow. this time variables have changed considerably. you need insane amount of capital to move markets nowadays. although majority of bitcoin bagholders are waiting for prehalving event, the market makers aren't that stupid to let you cash out while left holding bags so my take on this June is that it's either going to be a drastic drop or just sideways for another year before some black swan event or another ponzi scheme for lift off.
+1 Reply
DanV MOD blackswan
a year ago
That is how I see it.

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.
Reply
mic.kimani DanV
a year ago
agree. $250 will tell us more and also seems a reasonable target at this point. Lets revisit this then. Thank you
Reply
DanV MOD mic.kimani
a year ago
You are welcome.
Reply
leela.fame
a year ago
Any update? Seems like the market behaves differently from the forecast
Reply
DanV MOD leela.fame
a year ago
Sorry, not sure what you mean. Firstly the published chart was not for the purpose of actual and hence it is not possible to give hour by hour guidance of or even predict the exact path the price will take as explained i the 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.
Reply
alteredend
a year ago
So the Bitcoin top is in for good in your opinoin? Maybe one more test of ATH but bitcoin will never see 2k plus you're thinking?
Reply
DanV MOD alteredend
a year ago
If we develop a one of 2 bullish scenarios, then retest of ATH is very likely. It could make new higher high too. Exactly where is very difficult to say. Because this thing when it gets going it could extend the move. However, we should get more clues as it travels. So for now happy with marginal higher high.

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.
Reply
xiaoxian
a year ago
The rise is due to the Chinese central bank issued a message caused.Do you think he can change the trend of the fall.
Reply
xm2hi xiaoxian
a year ago
yesterday, probably due to a few more reasons, like the stock market correction, Italian banks and bonds
Reply
DanV MOD
a year ago
Just to highlight one possibility that has been opened since early 2015 which I covered in my Youtube video in early 2015 as a possibility (rather a long video) but I am becoming more and more open to it. That is since BTCUSD's earliest price data available, it might have completed a wave cycle at Nov 2013 high. In this scenario, it would likley take several years to retest ATH and could continue sideways chop or meander to the downside for lot longer than many might be willing to consider possible.

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:

snapshot
+2 Reply
blackswan DanV
a year ago
@DanV this pretty much is in line with my projection on future price too... The possible factors for aggressive downside pull:
- 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
+1 Reply
DanV MOD blackswan
a year ago
blackswan , thanks for sharing your views. Somehow I think that is very likely and logical reasons why we are less likely to see new bullish cycle developing. But emotions run high in Bitcoin community with overwhelming number anticipating or being hopeful of continued upside as the feel that this correction has gone on for far too long.

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.
+1 Reply
mkliethe PRO blackswan
a year ago
This is what I believe will happen as well. Although, I believe in the end Bitcoin will be the one to pull through. It's still useful with a price <$10 and there are enough Bitlievers (hard core bitcoin believers) out there that at the very least it will be around for years to come for a possible rebound.
Reply
DanV MOD mkliethe
a year ago
Indeed, If Bitcoin survive, it could offer great opportunities to long this at the right stage. But in the meantime pain could be severe and over longer duration.

Thanks for your comments.
+2 Reply
SunnyMorning DanV
a year ago
I am very bullish long term. I am sure once we reach $10,000. its inevitable. It might be in 2016 or in 2020. I assume it could be in 2017 because market crash has already begun and it will make bottom in 2017. oil gold stocks everything collapsed.
Reply
DanV MOD SunnyMorning
a year ago
Appreciate your comments, thanks.
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.
Reply
DanV MOD
a year ago
UPDATE: I have not looked at this correlation chart of LTCUSD and BTCUSD for sometime. However, but upon seeing someone posting LTC chart to suggest that the BTCUSD is primed to breakout to the upside from current congestion so I thought I should check. I could be completely wrong in my on observation, but noticed that there was major bearish divergence between them. Also it seems that LTC was leading the move from the low of 2015. That suggest that we could see early breakdown/ or Breakout of this in LTC 1st. But keeping in mid the divergence, it is more likely to be to the downside.
Here is the updated chart.
snapshot
Reply
DanV MOD
a year ago
Announcing Free Webinar - Here is the direct link to register for Saturdays webinar on Bitcoin - What are it's prospects for 2016 - 17? http://www.danv-charting.com/live-bitcoin-webinar.html
Reply
Ideas Scripts Chart
United States
United Kingdom
India
España
Italia
Brasil
Россия
Türkiye
日本
한국
Home Stock Screener Economic Calendar How It Works Chart Features House Rules Moderators For the WEB Widgets Stock Charting Library Priority Support Feature Request Blog & News FAQ Help & Wiki Twitter
Private Messages Chat Ideas Published Followers Following Priority Support Public Profile Profile Settings Account and Billing Sign Out