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Bitcoin Preparing for Deep Retracement to Sub-600 (Elliott Wave)

BITSTAMP:BTCUSD   Bitcoin / Dollar
15 days ago
snapshot

The smallest degree shown here appears to be finishing a fairly clear double zigzag. On the 60m chart you can see a confirmed terminal wave 5 of c which likely puts us at the end of the larger pattern as well, though, the small possibility of this forming into a triple zigzag can't be fully ruled out, it is also very unlikely. With that in mind this double zigzag is very likely completed and will be confirmed shortly at which point it may be a good idea to get very aggressive with this trade until it reaches about a 70-80% retracement of wave (b), which is the common retracement for a double zigzag. Wave (c) will also likely relate to wave (a) by 1.0 in time so this could potentially end right after quarterly settlement at the end of the year, which would mean this is potentially the top for the next couple of months, until we get a new bull run which should be much stronger than wave (b) and retrace wave (c) faster than it was formed to be fully confirmed.

There are also really big daily bearish divergences that look ready to pop and a perfect double top on BTCUSD             . This leaves us with a very good r/r trade that is fairly likely to be confirmed and will be confirmed if it breaks the b-b trendline and retraces all of wave c faster than it was formed. As customary with unconfirmed counts it is better to wait for more confirmations on this larger count before getting too aggressive, but on the shorter 60m count there is definitely a confirmed terminal impulse wave 5 that you could certainly get pretty aggressive on if this initial down move isn't retraced too deeply, and from there it may continue on to confirm the larger count as well, which is very likely to happen because usually the whole impulse will be retraced when there is a terminal wave 5.

This sets us up with a really good risk/reward trade on the 60m chart which is confirmed and if this does end up violating the top and trigger the stops it will likely be profitable to stop and reverse so you can make back all your losses because it will likely continue on to form into a triple zigzag which could take us significantly higher.

Always remember to want what the market wants. Inner peace is the most valuable commodity you can attain. Be fearful and logical in your management, greedy in your analysis, and confident in your trading. Having fun is the key to successful trading and being able to reverse a bad trade. Fear will only cripple you during trading hours, fear can find risk/reward and manage but it is a terrible trader because it makes you do the wrong things at the wrong times, you can't be fearful and confident at the same time. Confidence knows what to do and when to do it, and its a great trader, but it's a reckless manager and analyst. Greed puts you in the best mindset for finding the underlying structure of the market as long as you are following your management strategy and don't get suckered into get rich quick schemes. A fully integrated approach of managerial fear, greedy analysis, and then confident trading is the ideal integration of all parts of the human psyche into your trading, and if you can work from a mindset of creativity instead of problem solving, and you can have fun while you trade, then you will be able to use the power of human intuition, inspiration and insight to improve your trading even further.
13 days ago
Trade closed manually: This retracement is too deep, I reversed my position after the 5m correction failed. It will probably keep going after this but hard to say how far or if it will get a wave-c soon so it is probably a good idea not to stay long until its more clear. Wave c might not be over yet (if my terminal count is wrong) or this is probably an x-wave.

This is one reason why you should wait for the higher degree confirmations before getting aggressive on a trade like this, It was a very low probability that this broke up but it did, likely it was my mistake for thinking that this was a terminal and a failure on the 60m and it was probably something else (or it was just wave 5 of 3).

How far up will this go I have no idea, it might even need to pull back and make a wave-c from here before continuing up. It's best to be cautious in both directions now until there is something that is confirmed.
13 days ago
Comment:
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This is my best guess for what I think is going to happen from here. What makes the most sense to me, ie. why I was wrong, is because I counted wave i of c as all of wave c, but now looking back on it that doesn't make much sense for a few reasons, mainly that its far too small in price compared to wave a, usually for a zigzag it will be at least 0.618 of wave a, which at this point its not, also its fairly small in time too compared to wave a.

This means we're much more likely to still be in wave c rather than this being an x-wave. But this is only speculation and from here only time can tell and its best to stay out of a long-term position until there is a clear confirmation. If the above chart plays out it will set us up with the essentially the same trade as the chart I published a couple days ago, as I said earlier I may have just been early with this trade.
13 days ago
Comment: I just want to point out the update I just posted an hour ago could go in a lot of different ways, depending on which wave is extended. Right now I'm GUESSING that it's going to form a first wave extension based on the size of wave 1 but there is really no way of knowing for sure which type of impulse could form because the correction preceding it was a common flat which doesn't really tell us much about the implications of future price action, and this could potentially go much higher if it were to form a 3rd or 5th wave extension, so for now we'll just have to see how it develops. If this ends up being a 3rd or 5th wave extension then we could go as high as 855.

It's interesting to note that if the first wave extension did play out then we'd probably form a nearly perfect double top on the daily chart and possibly even a nice little bull trap by moving just a few ticks above the June high. Also since this is likely to break the top of wave-a it means that it will probably form an irregular failure in the longer term which is more bullish than a c-failure.

For now, we'll just have to see how this develops before taking any long-term positions, but the overall count I have published here seems to still work I just tried to call the top a bit early.
5 days ago
Comment:
Bitcoin Preparing for Deep Retracement to Sub-600 (Elliott Wave)


Because this broke the 0-B channel and because this currently appears to be a non-limiting triangle, It is possible that we are in a double three correction and that the larger wave-c has not even begun yet. This would mean that we are likely to go to about 920 on this run if we are in a double three. Now there are also multiple other possibilities which i've laid out previously, like this non-limiting triangle could be an x-wave, and there is a small potential it's not a non-limiting triangle and its actually a flat with a very odd looking terminal (unlikely). I think that either the x-wave or the double three are the most likely possibilities, both of which are very bullish.

There is also the first stage of confirmation on bitstamp. If this continues to trend up and break the high from a couple weeks ago fairly quickly then we are very likely to continue to trend up to 840+
5 days ago
Comment:
snapshot


(this chart goes with the comment above)
5 days ago
Comment: It's also possible that this is still only wave-d of a larger triangle and that we could potentially have a much larger wave-e left in this triangle. At this point that is a good possibility so it's something to keep an eye on until we complete stage 2 confirmation of the triangle (which is break the high of the triangle). After that it will be safe to get much more aggressive with this long position.

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4 days ago
Comment:
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Triangle is stage 2 confirmation on Bitstamp. Since it is a non-limiting it's still hard to determine if its a double three or an x-wave, but the former is much more likely. If so this chart should continue to play out as expected:

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If it is an x-wave instead of a double-three then it is a lot less clear how high this wave could go because it could be followed by any three pattern.

Also watch out for a correction when the post-triangular thrust reaches about the length of the longest leg (wave-a) of the triangle, which is around 760 on stamp.
18 hours ago
Comment:
snapshot


The Italian referendum failing to pass today could lead to massive capital flights out of the euro and the eu which may, over the next few weeks, help increase bitcoin price. Also this month, India decided to make most of their currency invalid over night (surprise!) to help combat illicit money and overtax the citizens even more. These are both going to lead to capital flights and some of that capital is inevitably going to go into bitcoin simply for the ease of movement and the increasing acceptance, especially in safe haven countries like the US that have strong currency you can convert your btc into usd fairly easily and quickly and even pseudonymously at many different brokers and exchanges around the world.

http://www.investopedia.com/news/bitcoin-may-go-if-italy-referendum-votes-no/

I expect this chart to continue to play out as expected. We are most likely in wave 2 of (c) right now, and since wave-(b) appears to be a double three we most likely still have an extended wave left in this run up, either wave-3 or wave-5 of (c), because all of wave-(c) should be equal to about 1.618 of wave (a) if this is a double three. We'll have to see how wave-2 finishes developing to predict which wave will be extended and wait until wave-3 is over before we can know for certain if wave-3 is extended or not, or if its possibly going to be a wave-c if the triangle was actually an x-wave.
3 hours ago
Comment:
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Since this correction has retraced more than 61.8% of the last leg up, I think that we are likely not in an impulse and that the non-limiting triangle we just completed is actually an x-wave. If that is correct then we will likely continue to develop into a triangle or a flat from here like the above chart shows.

A top here may make sense considering how bearish the momentum is. We'll have to see how this continues to develop before making any definitive calls, but the bull case seems to be quickly faltering.
Cocheese
15 days ago
Thanks Bill!
+1 Reply
rexlomax
15 days ago
Dude such a great insight, very much appreciated.. also agree on this trade!
+1 Reply
btc_joe
14 days ago
Hey buddy, I have a very elementary understanding of EW, if you wouldn't mind entertaining my question...lets assume this is correct, I only see letters and no numbers--so are you implying this whole bull market since early 2015 is corrective in nature? And would that mean we are in of new lows after completion? I would find that hard to believe, but of course I could be misunderstanding.
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btc_joe btc_joe
14 days ago
@btc_joe, *in for new lows
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Intuit PRO btc_joe
14 days ago
@btc_joe, Yes all of Wave {b} is a correction, as literally all wave b's are. That doesn't necessarily mean that we are going to make a new low under 200, in-fact, i'd say that is extremely unlikely because wave {b} itself is also a double combination which usually will only be retraced about 70-80%. That does mean that we could see very low lows after wave {b} is completed but probably not lower lows. I'd say around 340 is probably where this will ultimately bottom out after wave {b} is completed, and then from there we will likely begin our journey to ATH.
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btc_joe Intuit
14 days ago
@Intuit, ah I see, thanks so much for taking the time explain. Personally I can't really see us going that low but that seems much more plausible than new lows, time will tell : )
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Gainbtc
14 days ago
You made a mistake. Simple chinese knock Bitcoins their weak hands
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jostitrade
13 days ago
I dont see it jump up right now without big news and there isnt anything coming in the next 2 weeks. So my guess is that trading is slow and pullback strong before most get excited enough for a jump to 800USD and beyond.
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Intuit PRO jostitrade
13 days ago
@jostitrade, We could just slowly climb up and not even break 800 before we start falling OR we shoot up really hard after this correction is done and eventually stop around 855. Can't really predict the news but it doesn't really matter, a climb to 850 could happen just because its following the trend, news doesn't really matter that much. What I'm looking for right now is how big the next leg up is (ie. wave iii of c). If its less than wave i in price then we are definitely in a 1st wave extension, if its between 1.0-1.618 then we are probably in a 5th wave extension, and if its 1.618 or more of wave i then its probably a 3rd wave extension. Either way the targets are either about 780 or about 855, depending on how this next impulsive wave plays out.
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LJZ Intuit
9 days ago
@Intuit, So for now what are the next lowes expected ?
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Intuit PRO LJZ
9 days ago
@LJZ, Probably already hit the low which would be the wave-c of ii you can see here and in my previous update
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LJZ Intuit
9 days ago
@Intuit, Tahnks, How long it will take in you opinion to reach c of v ?
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Intuit PRO LJZ
9 days ago
@LJZ, You mean v of c? Idrk we'll have to see. Probably wave c will be over early next month.
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LJZ Intuit
8 days ago
@Intuit, yes v of c ;)
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AlanTheNoob
5 days ago
the last update seems ok, for me in the 6 hour + scale we are in a large sym triangle. weve had 1, 2, 3, touches on the top, and 1, 2, on the bottom. If we dont break up, we may break down on the 3rd touch of the bottom line. Long term looks like up, but for the next couple weeks we may be going down, Ill wait and see when the triangle truly breaks one way. Often we have fakeouts in btc for a day or so when it breaks.
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Intuit PRO AlanTheNoob
5 days ago
@AlanTheNoob, there could be a big correction shortly after stage 2 confirmation but it should continue trending after that. If this triangle was to break down it would most likely need to form 2 more legs not one, because the next leg down would only be wave-d and the current wave we just had would be wave-c, but either way is possible until it breaks out in one direction or the other.
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traderjoess
3 days ago
current stamp price: 766.34usd
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Intuit PRO traderjoess
3 days ago
@traderjoess, Looks like we got that correction like expected, probably won't be too big, usually its just a minor reaction after a non-limiting triangle.
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jostitrade
3 hours ago
This post is more like a daily news update instead of a forcast :)
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Ant0ni0
3 hours ago
OMG! We going up! 16 hours later - we going down! be defined already
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Intuit PRO Ant0ni0
2 hours ago
@Ant0ni0, I let the new information define itself, and 16 hours ago I said "We'll have to see how wave-2 finishes developing to predict which wave will be extended... or if its possibly going to be a wave-c if the triangle was actually an x-wave." which means more downside until this correction is over, the only thing that changed now was that it went so far down that its actually probably not wave 2 so the large upside is less likely to happen and we'll probably get a c-wave soon because the triangle was probably an x-wave. I've been pretty clear that these counts aren't confirmed and there are multiple possibilities on the table that can only be defined by new information, the triangle IS confirmed but I always said that it could have been an x-wave and not part of a double three. If you're not able to keep up then you do not have to choose follow my analysis, there is a reason why these charts are posted as comments and not as their own published charts, mainly because I'm just speculating on whatever seems like the highest probability at that time until a single clear pattern is actually confirmed by new information. Right now the triple combination seems like the highest probability but until this wave is actually complete it is very difficult to know for certain what will happen now, but eventually a clear pattern will emerge.
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Kappy PRO
2 hours ago
I see a possible truncated fifth wave. Alternately, a large abc correction and wave b just completed. If these counts fail, I expect a new high for the year to be made.
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Intuit PRO Kappy
2 hours ago
@Kappy, Your wave ii and (ii) are both part of a limiting triangle which is pretty much fully confirmed which means your count is extremely improbable because wave 2 cannot be triangles, and also your first wave ii is extremely short in time compared to similar waves of the same degree. Also many waves you have labeled as impulsive actually look like bullish corrections. Also your final wave v is retrace much too slowly.

Your alternative abc count is more likely but the correction dividing the impulses is significantly smaller in time than the impulses which means that it is most likely not the correct count, however, I do agree with you saying that it's a larger b-wave and that it may be near completion. We'll have to see how it plays out from here to know for certain though.
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Kappy PRO Intuit
2 hours ago
@Intuit, I see what you're saying. Thanks for the comments. The wave twos triangle fits the abc count. Watching and waiting...
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Intuit PRO Kappy
2 hours ago
@Kappy, Well the whole pattern would fit as a flat abc except for the fact that wave b didn't retrace at least 61.8% of wave a so instead of wave b its probably an x-wave.
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Kappy PRO Intuit
2 hours ago
@Intuit, Right! So what I have labeled as (iv) may be another b. a-b-c-x-a-b- and we're watching for the completion of wave c. Possibly could have happened or there's room for a larger five wave rise.
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Intuit PRO Kappy
2 hours ago
@Kappy, Possibly, I think right now though, its more likely that what you have labeled as wave (v) is actually wave-c and what you have labeled as the bigger iv is a third x-wave, and now we're waiting for the final abc which might be a triangle, so basically we're at abc-x-abc-x-a and the wave were on right now is b, and once this final three pattern completes it should finish the pattern because it can't have any more than 2 x-waves. So we are waiting for a c-wave and it could potentially be part of a triple combination.
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