4xForecaster

A Quick Technical Lesson | $BTC #forex #elliottwave #bitcoin

BITSTAMP:BTCUSD   Bitcoin / Dollar
7874 41 50
(this is a re-posting of a reply to traders in #bitcoin who asked that I explain the recent tweet - I decided to fully expand the explanation into a technical lesson)

Please, refer to the following link for the original analysis.forecasting - This page will remain a place for questions on technical analysis , if you do not mind.

- https://www.tradingview.com/v/qOHXHqQV/#tc133477

Lesson will follow in the text as a thread.

Thank you.

David Alcindor
Predictive Analysis & Forecasting
Denver, Colorado - USA

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Twitter: @4xForecaster
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David Alcindor, CMT Affiliate #227974
Alias: 4xForecaster (Twitter, LinkedIn, StockTwits)

Signal Service or Private Course - Contact: admin@KADAInstitute.com
All updates on https://twitter.com/4xForecaster
Hello @devlspawn - Thank you for asking for clarification.

Here is a synopsis of the technical/predictive analysis:

BTCUSD/Weekly - Bitstamp:
snapshot


Above WEEKLY chart represents $BTCUSD in Bitstamp, which I posted several months ago, expecting a significant decline, which was defined by the TWO rectangles, estimating a probable depth of decline, first as a low-probability of 335 to 150, and a second with very-low probability decline down to as low as 130.

In the interim, price for this exchange (Bitstamp) reached about the 160 level, coming quite close to the vicinity held in forecast.

As price meandered its way down, it did so by defining tops and bottoms, which I defined in the price field as points 1, 2, 3, 4 and 5. Close evaluation of these points will show several important things, such as:

1 - Points 1 and 2 are connected by an a-b-c pattern, where the height of Point-C comes to exactly 1.618 times the height of Point-A, as follows in the chart:

snapshot



2 - Points 1 and 2 are connected by a zig-zag pattern moving against the main downtrend that preceded it, thus completing a correction at Point-2, as follows:

snapshot



3 - Points 2 and 3 are connected by an Elliott Wave impulse formation, define internally by waves 1, 2, 3, 4, and 5, where wave-1, 3 and 5 (BLACK) move in the direction of the dominant bearish trend (PINK Arrows), whereas interim retracements in waves 2 and 4 (BLACK) move against the dominant downward trend (as per orange arrows) as follows:

snapshot



4 - The overall move from Point-1 to Point-5 falls under TWO known patterns:

a -- Elliott Wave's Leading Diagonal, where points 1-2 and points 3-4 are connected by a zig-zag (i.e.: a simple a-b-c pattern, as is the current case), and points 2-3 and 4-5 are connected by an impulse wave (ie.: with internal points enumerable as 1, 2, 3, 4 and 5, such as was just demonstrated above between points 2 and 3, although you should visually appreciate a similar construct between points 4 and 5). If you counted the connection between these points, you would see that points 1-2 and 3-4 are connected by 3 points, or an internal a-b-c pattern, whereas points 2-3 and 4-5 are connected by 5 points, as enumerated in the chart above, such that you would arrive at the following internal construct:

3-5-3-5.

This typifies the Elliott Wave's Leading Diagonal - Please, refer to this link (cut and paste) and review the bottom for a typical example of this Elliott Wave's pattern:
- http://www.elliottwave.net/educational/basictenets/basics2.htm

AND

b -- Bill Wolfe's Wolfe Waves pattern ("WW"), which is essentially the envelop of the overall detailed tracing just discussed above. What the WW pattern requires is a set of ipsi-directional (i.e.: "same direction") lines, which in the chart is define as Line 2-4 and Line 1-3 (I would typically leave 5 out of the count, since it completes automatically at the intersection of the 1-3 Line, although it can also complete under the name of "five-prime" or even "five-second", given a certain set of conditions.

In the tweet I posted, I referred to this "five prime", written as 5', which is defined as follows:

1 - Draw the 2-4 Line and the 1-3 Line.
2 - Copy the 2-4 Line, and place its beginning right at Point-3.
3 - This new 2-4 Line projection is now called the Target Line, or Profit Line, and will define Point 5' upon price validation of this line.
4 - A 5-second, or 5" will most rarely be defined the same way, except that in this instance, you would need to place the copy of the 2-4 Line and make it start off of Point-1.

snapshot



Now, here are important rules about this pattern:

1 - Points 1-2 should be FARTHER apart than points 3-4
2 - Point4 should exist WITHIN the range of Points 1 and 2
3 - The lines defined by these points should be referred to as Line 2-4 and Line 1-3
4 - Line 2-4 and Line 1-3 should CONVERGE always
5 - IF Lines 2-4 and 1-3 converge DOWNWARD (as in this case), expect a significant rally to occur ONCE price reaches point-5 (RARE), or Point-5' (MOST COMMON), or Point 5" (RAREST EVENT) - This would constitute a BULLISH WW
6 - IF Lines 2-4 and 1-3 converge UPWARD (opposite to this case), expect a significant rally to occur ONCE price reaches point-5 (RARE), or Point-5' (MOST COMMON), or Point 5" (RAREST EVENT) - This would constitute a BEARISH WW
7 - A NEW line should be defined, connecting Point-1 and Point-4, as follows:

snapshot


Just as a point of recollection, here is the tweet I posted, for which you owed you a bit more clarification:

$BTCUSD: As forecast completed, now look for 5' validation vs. 1-3 Line transgression:

snapshot


@tradingview $BTC #bitcoin


Now that you know what Point-5' means, and what the 1-3 Line refers to, it should come within reason that what we need to expect is:

1 - Either a continuation to the upside, across the 1-3 Line

2 - Or, a continuation of the decline towards completion of Point-5', which we now know to validate only ONCE price crosses the copy of the 2-4 Line projection originating from Point-3.

As a general rule, and as define above, the MOST COMMON manifestation of the WW pattern is via a 5-prime completion. So, my inclination here would be to wait for this completion to occur.

Also, and this is for the most CONSERVATIVE traders in our TradingView community: The 1-4 Line is supposed to be the Take-Profit, or "TP" line. However, I would recommend taking full or partial profit IF and ONCE price reverses to the former level of Point-4, as per this illustration:

snapshot



OVERALL:

We just reviewed a few fundamental concept which I apply in my structural and pattern analyses, namely:

1 - Basic geometries and Fibonacci correlations;
2 - Basic wave count and Elliott Wave pattern with internal construct
3 - Advanced pattern in WW and complex target projection in alternate points 5' and 5" and final TP line.

If you have any particular question on this or other advanced patterns, technical analysis or occult geometries, feel free to contact me. I appreciate the thumbs up as a measure of how well I reach out to the astute and learning crowd in this fine community.

I appreciate your readership and support.

David Acindor
Predictive Analysis & Forecasting
Denver, Colorado - USA

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Twitter: @4xForecaster
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+16 Reply
bitsunrise 4xForecaster
2 years ago
Hi David, thanks for breaking it down, it is really appreciated. Cheers!
+3 Reply
RamaDeda
2 years ago
A quick question. What's your forecast, after the last down-wave, on the long time? 1300$?
+2 Reply
4xForecaster PRO RamaDeda
2 years ago
Hello @ramadeda - I have not formulated a definitive forecast at this point. Predictive analyses and forecasts will be posted on the original chart:

- https://www.tradingview.com/v/qOHXHqQV/#tc133477

David
+1 Reply
khoilevt
2 years ago
going to 300 and then go down ?
Reply
This is Gold.
+2 Reply
4xForecaster PRO Chartistry
2 years ago
@CryptoChartist - No, I assure you, this is bitcoin ...

... Which could turn into gold if played well.


:-)


David
+4 Reply
Chartistry PRO 4xForecaster
2 years ago
LOL Indeed it could...
+3 Reply
09 FEB 2015 - Update:

From Twitter/Linked-In:
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$BTCUSD prints 3rd candle on the bearish side of geometry as a new trading week opens:

snapshot


@tradingview #bitcoin $BTC
----------


snapshot



David Alcindor
+2 Reply
dieguito 4xForecaster
2 years ago
David ¿do you think BTC is visiting 5'?
+1 Reply
4xForecaster PRO dieguito
2 years ago
Hello @dieguito - Yes, there is a very god chance that it might.

However, the forces acting against this possibilities are:

1 - Resistance from the historical baseline growth trendline
2 - Resistance from the structural low of last bearish-most candle

Both have created a field of bullish resistance that would be very difficult to overcome, much like trying to push together magnets of same polarity. A significant event should cause this to occur - David
+2 Reply
NightWish 4xForecaster
2 years ago
A significant even like Greece failing for example? :P
+1 Reply
4xForecaster PRO NightWish
2 years ago
Hello, @deeltje - Not sure whether it would mean anything to this sub-market. However, a burst in USD strengthening, followed bya significant sell-off could do the trick, since this BTC is expressed in relative terms opposite the USD - David
Reply
manipuflated 4xForecaster
2 years ago
5' is incredibly bearish with the chart drawn out farther now. What first looked like $130 could now be $50-$80?
+1 Reply
4xForecaster PRO manipuflated
2 years ago
Hello @manipuflated - I agree with you. It does look incredible, but there is me and the there is the model. I have to step out of my own rationale and let the model point fingers to the moon at times, and to the abyss in other times - It will be interesting to see what happens ... Watch for stretch marks if this ever occurred.

David
+2 Reply
manipuflated 4xForecaster
2 years ago
I really hate the unknown. I sold and look, now we're higher...lol Never fails.

Do you offer services to help people write a trading plan, David? I over trade way too much.
+1 Reply
4xForecaster PRO manipuflated
2 years ago
@manipuflated - Used to. Took a break from coaching and teaching - David
+1 Reply
14 FEB 2015 - Update:

From Twitter/Linked-In:
-----------
$BTCUSD is rallying fast but how real is it? You be the judge... Watch for that L/T TL:

snapshot


@tradingview #bitcoin $BTC
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snapshot



David Alcindor
+3 Reply
14 APR 2015 - Update:

From Twitter/LinkedIn:
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$BTCUSD reached geo. tip; Re-validates trendline; Bulls regain strength:

snapshot


@tradingview $BTC $USD #bitstamp #bitcoin
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snapshot



David Alcindor
+2 Reply
venomspike PRO 4xForecaster
2 years ago
Hi David, doesn't this conflict with your post on BTCChina and opening up to 1085 CNY? Or are you suggesting that bulls are just now starting to get some footing at these price levels and will lend itself to a reversal at a lower price point?

I only ask because 1085 CNY is the equivalent of about $183 USD, which s far below the trendline illustrated here.
+2 Reply
4xForecaster PRO venomspike
2 years ago
Hello @venomspike - Yes, I am simply pointing to the fact that bulls are getting warmed up.

In terms of that it means in the Predictive/Forecasting Model, I am starting to see some divergent strengths. Considering that $BTCCNY is the largest of this market, it is given a credit when it still points to potentials of further downside, whereas Bitstamp is starting to "pull the other way".

All of this is based on high-probability conditions, so nothing is 100%. However, when things start to not line up very well, it can brew like a nice warm beer on a slow firecamp, after that, it's all about physics.


David
+2 Reply
ronfkingswanson PRO 4xForecaster
2 years ago
While I can clearly see the geometry of this linear-scale growth channel, we're really sitting heavy on that baseline trend. There's just not any wiggle room left - it's gotta go up from here.

What would you say about this negative divergence on the daily? To maintain that baseline, we'd have to rise and bust out of the long-term bear channel right away, which would seem to contradict the preceding divergence
snapshot
+1 Reply
ronfkingswanson PRO ronfkingswanson
2 years ago
**your** linear-scale growth channel
Reply
ronfkingswanson PRO ronfkingswanson
2 years ago
(not mine) damn could use the ability to edit comments :P
Reply
4xForecaster PRO ronfkingswanson
2 years ago
Hey @ronfkingswanson ... I was wondering where you were ... Don't see your smart interjections in the MOD room anymore.

Yes, price is wedged, literally, into a corner, but this may not necessarily bring it to a "pop" ...

The Negative Divergence in your chart relative to the RSI supports further downside at this time.

Here is what I just posted, looking at a finer granular level:

From Twitter/LinkedIn:
----------
$BTCUSD likely stop at Pt4; Cypher is lesser prob. or delayed attainment:

snapshot


@tradingview #bitcoin #bitstamp $BTC
----------


snapshot



David Alcindor
+1 Reply
4xForecaster PRO 4xForecaster
2 years ago
TECH-NOTE:

FYI - A trader asked the following question in a PM:
----------------
David, I am confused. Your last two BTC charts are in direct contradiction with each other
these two:

snapshot



snapshot



furthermore if price went to 280 it would break that weekly wedge and if valid price should eventually see much higher highs than 280
280 would also breach your down trend line in your bigger picture daily chart here:

(I am referring to the top trend line of the shaded region)


snapshot



210-215 is an obvious area to watch for me, dont really know if it will hold or not so I am on edge :s
if price breaks above $234ish breakdown level I will have to rethink things


My reply follows:
-----------------
@xxx- Hello xxx - I don't see the contradiction. There is limited upside potential for these two BTC.

In the Bitstamp, it illustrates that a geometry could pull price up to the level of Point-4, but that would be unlikely that it would go higher than than, unless a true market reversal is afoot.

Geometrically speaking, the 1588.46 represents the same potential reversal for $BTCCNY.

In essence, both charts are representative of one another, and the background geometry suggests that any upside will be limited to their respective marks, as illustrated in the chart.

If price breaks and closes above these levels in the charts, then I would start to question bears' strength - David
------------------


OVERALL - Looking at the larger picture, it should be obvious to the advanced trader that price has likely reached an area of consolidation. Therefore, expect wide swings in price, with ups and downs, even if the moves are net-negative, as further down-side will probably be hammered out ever more laboriously.

The geometry that applies to the 2-hour chart in the $BTCUSD/Bitstamp can just as well be replicated. In doing so, the initial analysis that applied to $BTCCNY remains unchanged, succumbing to the same limited upside, geometrically speaking.

If you have any question on this, please share them on this thread, and not in private, so that it may benefit the largest number of traders reading through this page.

Appreciate your challenging questions!


David
+1 Reply
15 APR 2015 - Update:

From Twitter/LinkedIn:
----------
$BTCUSD rises from 1.414 #fibonacci; 260 forecast target in force:

snapshot


@tradingview $BTC $USD #bitcoin Bitstamp #forex
----------


snapshot



David Alcindor
Reply
16 APR 2015 -Update:

From Twitter/LinkedIn:
----------
$BTCUSD meets resistance at the 1-3 Line; Still expected to rise to 260:

snapshot


@tradingview $BTC #bitcoin #bitstamp
----------


snapshot



David Alcindor
+1 Reply
17 APR 2015 - Update:

From Twitter/LinkedIn:
----------
$BTCUSD #bitstamp sought support at 220.00 as forecast; 260.00 target remains in sight and in force:

snapshot


$BTC #bitcoin
----------


snapshot



David Alcindor
+2 Reply
G_Man 4xForecaster
2 years ago
hey David, how do you see the 240 zone responding if this plays out? I'm looking at the head and shoulder type pattern and wondering if we break 240 that that would invalidate the pattern, and prove to be quite bullish perhaps
+1 Reply
4xForecaster PRO G_Man
2 years ago
Hello @Mr_Gareth,

Looking from the point of view of an inverted Head & Shoulder, price would need to rise to 260, recoil and rest at 235, and retest the 260 once again, with a deliberate break and continued advance above 260.

The DASHED arrows that I ascribe to the chart are probable price pathways. The speculative scenario just defined under a H&S pretext is already defined by these same dashed arrows, whereby price is expected to rise to 260, then rest at the upper belly of the geo along ts 2-4 Line, and then possibly rest, even attempt a loftier course above 260, which represents a lesser probability of attainment.

The height defined by Point-4 and Point-5' can easily be duplicated and stacked upon the level of Point-4 to approximate a geometric forecast IF indeed price where to turn bullish.

However, taking things one step at a time, price will need to ascend to 260 first, at which point a Kiss of Death (small parabola with nadir at Point-3, followed by a deeper parabola with nadir at Point-5') will likely rub Bulls the wrong way, which is the basis for a HIGH PROBABILITY push back IF and ONCE price rises to 260, which it is expected to do (HIGH PROB.).

The depth of pushback upon completion of the KoD is expected to be measured at a significant Fib retracement, although it is geometrically supported by the 2-4 Line, expectedly (MOD. Probability).

I would look at TWO components:
1 - Stopping Volume as price rests at the speculative 235 level, i.e.: as it eeks support along the 2-4 Line of the geo
2 - A Fib depth of 50%.


David Alcindor
+1 Reply
G_Man 4xForecaster
2 years ago
thanks for your reply, sorry I wan't more specific, I was talking about this formation:

https://www.tradingview.com/chart/FBfSyj6S/
+1 Reply
4xForecaster PRO G_Man
2 years ago
Hello, @Mr_Gareth - Please, be sure to input the chart's URL into the icon within the writing window. This will bring the chart up and allow everyone else to quickly glance at it.

David
+1 Reply
G_Man 4xForecaster
2 years ago
snapshot


here you go :)
+1 Reply
4xForecaster PRO G_Man
2 years ago
Hello @Mr_Gareth - Yes, it has the morphology (shape) of a H&S, but lacks the topology (place) of a H&S. As drawn, it definitely has the right/left shoulders and the head, but this configuration is typically expected at the top of a price swing, since this pattern is a geometry associated with reversals.

Still, I see what you are seeing, but I would not consider this a H&S for trading purpose, based on the reason (unmet conditions) above - Here are images (Google query : "head and shoulder chart trade") that illustrate where an upswing preceded an upright H&S, or a downswing preceded an inverted H&S, prior to reversal.


David


David
+1 Reply
4xForecaster PRO 4xForecaster
2 years ago
(Google results: https://www.google.com/search?q=head+and+shoulder+chart+trade&tbm=isch&tbo=u&source=univ&sa=X&ei=PEAyVd2cBNDvoASL-ICwAQ&ved=0CD8QsAQ&biw=1920&bih=977 )
+1 Reply
G_Man 4xForecaster
2 years ago
ok thanks :)
Reply
rubenthin PRO 4xForecaster
2 years ago
Hello David, I just saw your discussion about the invalid H&S.
Ive been suspecting a truncated 5 wave down as the decline appears to be contracting...i looked it up and found that the truncated 5th wave scenario looks v v much like this misplaced H&S...and looks like what's happening just now on btcusd:
snapshot

You can see my abc prediction appears to want to fall short.
What do you think?
Link to truncated 5th image:
http://image.slidesharecdn.com/elliottwavesprinciples-100422065735-phpapp01/95/elliott-waves-principles-11-728.jpg?cb=1271937469

+1 Reply
4xForecaster PRO rubenthin
2 years ago
Yes, a EW 5th truncation would be more like it.

David
+1 Reply
19 APR 2015 - Update:

From Twitter/LinkedIn:
-----------
$BTCUSD stalls at 1-3 Line; Significant pushback could occur; Bulls remains intent on 260:

snapshot


$BTC #bitcoin #bitstamp
---------


snapshot



David Alcindor
+3 Reply
eYou 4xForecaster
2 years ago
David,

Is this pushback to 214.05 still expected by your model or are we "ready" to cross the 1-3 Line?

Kind regards
Reply
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