4xForecaster

#Bitcoin Consolidation: Recoiling Before Springing? | $BTC #LTC

BITSTAMP:BTCUSD   Bitcoin / Dollar
Friends,

It is becoming more apparent than ever before that the crypto-currency has mounted a resistance to infectious nay-saying and other virulent dissemination of damning news.

What has happened instead is a quieting of its price moves. While institutional news releases from both sides of the bull/bear fence had emerged on a higher frequency weeks ago, it seems that there is really no more bears or bulls to convince that an imminent collapse is imminent - Instead, price action             has now followed a narrowing path reminiscent of a basic market geometry, in which a pattern trader might see either a falling wedge , and an advanced trader might also see a potential Wolfe Waves , both of which portend a bullish outcome. As an observer of this market geometric             development, a glance at my predictive/forecasting model remains bullish , despite a resistance warning at 452.67, and a tolerant decline to 373.59 without having to negate its bullish outlook.


MARKET GEOMETRIES:

The market is ripe with geometries, some more occult than others, but considering a basic price action             where price narrows its progressive decline around a declining mean, is likely to appeal to a pattern trader who would probably see a declining wedge pattern (see solid red lines in the chart).

For a more advanced pattern trader, the visual cortex might crackle a bit louder and conjure up the nascent outlines of a bullish Wolfe Waves pattern ("WW"), whose complex defining 1, 2, 3, 4 and 5 points give rise to 5-prime and 5-second, or 5' and 5", respectively. As you might already know, a 5' is born out of the 2-4 line projecting off of Point-3, while 5" would project off of Point-1. In my experience, 5-primes are more common than a mere Point-5 reaction (point-5 is lined up with points 1 and 3 to define the 1-5 line), whereas 5-second is merely a much rarer geometric             event.

For the Elliott Wave enthusiast, the 5-prime could be considered as the Point-E throw-over/down of a triangle, although I would rather let the EW expert speak with greater eloquence and depth than I can demonstrate on this subject.


S/R LINES:

You will see in this new chart that I have removed most of the channels and arrows (original here: https://www.tradingview.com/v/NI9c1s49/), but the support/resistance lines remain intact and in force, with the following addition:

Level 429.60 is emerging as a critical level whereby its transgression to the downside would open the floor to our predefined 398.00 and 373.59 levels. While the first carries a higher probability of getting hit (if and once the conditional 429.60 level of broken), a cloud of support exists within the 384.35/363.53, with the strongest value being defined at this 373.59 level.

Therefore, I suggest that the trader keeps an eye open to the conditional 429.60 level, and does NOT neessarily believe in the bearish news release that may be hurled at his hesitant spirit, as this will probably be the necessary mechanism that might successfully push price to these CONTROLLED depths.

Overhead R/S lines too are intact and remain in force, but at this point, they seem to await a different narrative at a different chapter.

Cheers,


David Alcindor
Predictive Analysis & Forecasting
TradingView Moderator


All directional statements are opinion - Do your own diligence.


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David Alcindor, CMT Affiliate #227974
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24 MAY 2014:

From Twitter feed:

"$BTCUSD: Revengeful bulls chomp forward; Stampede towards next resistance -
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@tradingview $BTC #bitcoin $USD #forex"

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Bulls are advancing with no interest in deeper retracement than what just occurred - The blue arrows offered the high-probable pathway, but bulls are marching on at a much faster, less probable pace, towards the next overhead resistance range.

If the price action remains as sustained as this, expect either a deep retracement once the range ("pink zone") is reached, or a sustained consolidation at that level.

Cheers,

David Alcindor
+1 Reply
iefan PRO 4xForecaster
I've been away David, but just read through all your post and want to thank you for all your efforts, it has improved my understanding ten fold! Keep up the great work! Legend.
Kind regards
Iefan
+1 Reply
Anima87 4xForecaster
So lets say we penetrate 630-670 - where do you see this going? - seems like there is a rampant bull movement.. my litecoins have become alot more worth :)
+1 Reply
Hi, @Anima87 - I discussed this probable outcome of the resistance zone earlier, stating that a significant retracement is probable, considering the sustained ascent that has taken place so far. However, the consolidation took so long that a lot of bulls might not allow a retracement to take place. The alternative could be another consolidation at these resistance levels - David
Reply
24 MAY 2014 - Update:

Twitter feed just released:

"$BTCUSD: Price follows forecast path so far; Still bullish outlook -
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@tradingview $BYC $USD $LTC #bitcoin #litecoin"

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Traders,

Looks like so far, price has moved in the was of the forecast (the blue arrow defines more probable pathway; the grey defines a past price action or less probable pathway).

In fact, if you are into Elliott Wave count, ("EW"), one might potentially see that the hit target occurred at the completion of a Wave-4, and that the current down-then-up course may represent the initial a-b waves of the expected a-b-c pattern which can sometimes define the corrective Wave-4.

If this EW count is correct, this add further credence to a wave-5 completion to higher level. But then again, I would ask the most EW educated person on the site for a confirmation (e.g.: "DanV" - He is the one I would ask for sure).

Looking at the predictive/forecasting model, the directional bias remains bullish and the targets remain in sight and in force.

In terms of R/S outlook, 494.07 is still acting as a reliable supportive base in case of a significant decline from current levels. A further decline to 429.60 remains a possibility, albeit a distant one.

The overhead 541.00 will probably act as a significant resistance once again, requiring significant absorptive activity (i.e.; look for significant volume spike at its approach), although a phenomenal news release would likely outplay this resistance level, a simple geometry might allow price to worm its way through, turning it into a propulsive base for additional rallying when it prepares to rise towards that pink cloud (that's be the best case scenario).

Cheers,

David Alcindor
Predictive Analysis & Forecasting
+3 Reply
any update analysis?
+1 Reply
Hi, @chimbot - Price moves towards the forecast levels, but ignores continues to ignore the more "conservative" paths of recoiling first. Instead, it is making a straight dash towards these forecast levels, so expect little to no change in analysis.

The forecast levels are as follows:

1 - 494.07 = Here, I have expected some unwinding to the downside, as the arrows indicated. Instead, price consolidated for 8 x 4-hour-candles (32 hours) tightly around that forecast target, then moved to the next level: 541.00.

2 - 541.00 = Price barely touched that forecast level at this point, and it has since retrenched a little. I expect price to validate that forecast level, but as in the case of the prior lower level, where some unwinding to the downside did not occur, a walk-through is probable. A higher probability remains a significant resistance/support validation of either the prior 494.07, or less probably the elusive 429.60 level.

3 - The range over head remains intact and in force as well. It is bound by the 630.78 below and 667.80 above. It is expected to impose a more significant Fib-measured reversal. However, here too, it all depends on the behavior of this crypto-currency.

I recommend the trader to draw a vertical line that separates the pre-bull and the post-bear era, passing through the lowest recently attained. I say this without some hesitancy, but we are likely to see a different behavior on the upside than on the downside, reflecting a reversal fundamental perception of the market towards bitcoin. Whether this is true or not does not really matter in my predictive/forecasting model, but it should matter for the resilient bears seeking to enter at discount levels.

It appears that the discount levels are becoming thinning opportunities, as demonstrated by the most recent price action, where higher-levels are carved out, and a counter-trend move appears to be underway.

Once the chart indicates a price action too indifferent to above levels, this should warrant a "wash, rinse, repeat" analysis. Moreover, it would certainly indicate that this pre-bull, post bear behavioral change did indeed occur.

Cheers,

David Alcindor

* * * PS: As of this writing, time did take the time to validate the 541.00 level. So, let's sit, watch and pass the pop corn, please * * *

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- David Alcindor
+3 Reply
Anima87 4xForecaster
Hi David

This Keltner chart seems to suggest uptrend is running out of steam and that bitcoin is overbought (from what i understand). Any thoughts?

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+1 Reply
Hi, to me it looks like that Keltner channel is just opening up, no?
To me this has looked massively overbought since the very first bar of the run...and every overbought sign has been followed by further buy ins.
I'm cautiously trying to determine a point to sell for a retracement but have a strong sense that it will not happen at an obvious time...I think today's 451 is as yesterday's 426...I think its going to go through it :-/
+1 Reply
herrschmidt johnrfraser
Just relax! Don't panic, because its going up ;).. I'm not selling before the ATH is reached. Why take the risk now where the situation is promising, but still so uncertain?
+1 Reply
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