First and foremost, well done to everyone who has hodled through the bear run. It has most definitely been a true test of an individual's investor stamina.
As promised, it's time to take a closer look at wave 3 with the view of establishing more accurate price forecasts. In my previous ideas, I had initially provided rough counts for wave 3 to be between $33 - 38k with a possible extension into the 50k zone (please see linked ideas below).
Bitcoin is in pure price discovery mode with no level above to target as previous support or resistance. How high can it go? In my opinion, 24.3k is the next short term price level to challenge. A successful break of that level could very easily propel BTC towards my initial Wave 3 projection of 29.8k - 31.7k.
The FOMO and publicity it attracts has meant that BTC has developed a tendency to overshoot in bubble like fashion over the years. That being said, I feel that there is a high probability that BTC can achieve a Wave 3 extension level. The first of these extended Wave 3 projections is at 36.2k. There are two further extended projections, more on those level later.
Follow for further updates. Your 'likes' are much appreciated and your comments are most welcomed. I'm interested in seeing what your price forecasts are.
Thank you for taking the time. Trade safe and always remember to plan your trade and trade your plan!
Beyond Edge
Disclaimer
This is not trading advice. All content/ information shared in this idea is purely educational in nature and is expected to be used for analysis and illustration purposes only.
Do not trade or speculate based solely on the information provided. Trust your own analysis.
Beyond Edge
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A couple of tests over the weekend on the 24.3k level as mentioned above. Possibly some more sideways action just below this level before moving upwards. Let's see how it plays out.
I'm not suggesting your trend direction prediction or targets are incorrect (Personally, I think your targets are too tame). But your simple Elliot wave labelling falls... flat :) One Elliot wave guideline (not a rule) is if it doesn't look right, it probably isn't. For example where you've labelled wave 2 is immediately followed by a retracement of more than 90% (on a non logarithmic chart), instead of continuing upwards as an "impulsive" wave 3. Tip:Do you remember learning what an Elliott wave pattern that retraces more than 90% is called?
BeyondEdge
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@innocentAccoun35113, Thanks for your comment. As stated in the idea, there are further extended targets for this wave which I feel BTC is more than capable of reaching. The simple EW labelling minus the lesser degree counts was intended for this idea.
Not entirely sure what you mean here...
“where you've labelled wave 2 is immediately followed by a retracement of more than 90% (on a non logarithmic chart), instead of continuing upwards as an "impulsive" wave 3.”
The wave 2 was followed by an impulsive lesser degree wave 1 of wave 3. I acknowledge that whether it is a wave 2 becomes more doubtful if it retraces by more than 78.6% of wave 1 but as a rule, Wave 2 should not retrace more than 100%.
I have considered a regular flat (if that is what you are referring to?) as an alternate count but the following wave C (this current wave) should have finished at 100-105%. Added to this, the rarity of a regular flat, I feel, renders that possibility as unlikely. Ratios may look different on a linear to a logarithmic scale, I would personally still class the 2017 high as a wave 1.
Care to share your count? I would be very interested in seeing what you make of BTC from an EW perspective and also how adventurous your predictions/targets are :)
Beyond Edge
innocentAccoun35113
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Yes I meant taking measurements on a linear scale.
Just focusing on your lesser wave 1: It doesn't track as an impulse if you break it down for the following reasons. Looks, MACD and volume.
Looks: Again, there are no hard and fast rules on looks, (these are just more advanced "guidelines")usually when what you believe is the end of wave 2 sinks past 61.8% of wave 1, treat it as only a part of the correction with more yet to follow that should end up above 61.8%. If it's a running correction then wave 2 could even end up above wave 1's finishing point. Running corrections especially running flats is one of the least understood and least documented parts of EW. Which brings me to another point, if any part you believe is wave 2 so much as touches 90% of what you believe is wave 1, it's best scrap that plan.
MACD: When you combine MACD with Elliot wave there are a few tricks to determine what is likely to be an impulse wave. For example when an impulse wave is about to end there are usually warning signs tracked by MACD. For example MACD readings for wave 3 will be higher than wave 5. Even though price goes much higher in wave 5. Same with volume: Wave 3 volume readings are also usually higher than in wave five.
The above isn't exhaustive. There is a lot more but if what you are charting as an impulse can survive the few mentioned above then the likelihood of success increases.
BeyondEdge
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@innocentAccoun35113, Thanks for the input. I agree with the MACD and Volume relationships with wave 3 and 5. Generally, for most markets, a 90% touch would sway me towards looking for another structure. With BTC, I feel the levels achieved for both corrective and impulsive sequences tend to lean towards the extreme.
With regards to the lesser wave 1: I agree that although the sequence doesn't quite fit into a five wave impulse in lesser timeframes, looking at the weekly, there seems to be a clear five wave structure between Apr-Jul 2019 with shallow retracements at 0.38 for both 2 and 4.
Another point to ponder upon (for the lesser timeframes) is that it also corresponds with the new EW principle of trends unfolding in three wave structures in some of today's markets.
innocentAccoun35113
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Yes I have come across that line of thinking a while back: "The markets of today aren't like the markets of yesterday ... etc." Then a specific group/EW variant website suggests that current markets usually progress in 3's rather 5's. Except that line of thinking doesn't actually bring anything new into Elliott wave theory work. The corrective like progress that unfolds in the direction of the trend are running corrections. These corrections like running flats, double running flats, that exceed the impulse wave's finish by large margins. They contain large b waves that routinely exceed 1.618%a. Combining these with large X waves and you get a corrective structure that looks monstrously impulsive.
I think I tried to research more into what that group was going on about but there was no other independently verifiable data as to how to treat what they believed in. Also since current markets have been proliferated with computer based, algorithm trading, what is more important is deciding the baselines these successful institutions, hedge fund managers etc, are using especially when it comes to Elliot wave. So personally I view Elliot wave like chess, we humans can only see so far. Our A.I. overlords have taken over. And do we truly understand all the rules? I'm def. interested on your take on all this.
BeyondEdge
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@innocentAccoun35113 Yes, from what is suggested they are similar to running corrections and I haven’t yet come across any additional data relating to that theory either to suggest otherwise. Although I would be interested in seeing what the variants are if there are any.
I personally don’t think it is just a question of understanding all the rules but more of if/how malleable we can be with these rules considering the ever changing climate. You mentioned the proliferation of computer based, algorithmic trading within current markets. These as well as the changes in economies and social systems will no doubt have had an impact on the collective psychological behaviours that EW is based upon. How does that impact upon a market such as BTC and crypto? A market which hadn’t until recently seen any meaningful institutional influence.
I doubt many hedge funds and successful institutions will ever openly admit to using EW! :)
Anyway, back to the focus of this idea. If the lesser wave one does not track as an impulse to you then what are you viewing it as?
innocentAccoun35113
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@BeyondEdge, Well first i should mention, what comes first the 🐔 or the 🥚. I tried everything to force BTC from it's inception to it's 2017 high as an impulse. But too many rules broken. It's corrective.
The move above has also corrected and that correction finally ended in March 2020 when Bitcoin finally realised it's true starting worth. So the March low I'm treating as the starting point for a Major bullish impulse cycle.
I'm going to leave it there for now. Although i don't mind leaving a comment here or there or even helping out those who ask directly, I've never posted my hard earned work . I don't really get the logistics of people posting their work. Especially since 96% of ppl posting don't seem have a clue.
Do you know why ppl do this? Are some ppl here just being paid to sow disinformation so that the market makers get as many ppl as possible to blow their accounts? Or is it just narcissism? self-inflated importance?
BeyondEdge
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👍🏽
Nightowl044177
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thanks, i wish to become a friend.
Am Umar from Nigeria
One Elliot wave guideline (not a rule) is if it doesn't look right, it probably isn't. For example where you've labelled wave 2 is immediately followed by a retracement of more than 90% (on a non logarithmic chart), instead of continuing upwards as an "impulsive" wave 3.
Tip:Do you remember learning what an Elliott wave pattern that retraces more than 90% is called?