During this period with both up and down swings, many chartists using differing methods are suggesting that we have formed a major low and are now in new "Bullish Cycle". Several have asked if there is any case I could make to justify this.
"DOW Theory" looks for series of LH & LL, OR HH & HL to denote up &down trends. One important thing to remember is, what cycle degree are we referring to and within the same cycle degree powerful rallies or declines could take place without altering the overall trend.
Note in the chart below on Daily time frame: we have series of LL & LH since Nov 2013 high. This means that based on DOW theory, at this degree, we are still in cycle and change would not be confirmed till we get a new high above June 2014 high (700 zone) with subsequent HL being formed on any retrace.
However, since Jan 2015 low we are in intermediate cycle according to DOW theory in that we have a High (25th Jan 2015) & Higher Low (Aug 2015) and now forming a Higher High. Does that in it self suggest that we will continue to see series of new HH & HL? Also consider that since 31st Jan 2015 low, we don't actually have series of HH & HL. Rather we have HH & LL so far. Does this suggest cycle behaviour according to Dow theory? I am not sure if it could be argued to say yes.
Based on EW theory, it seems that we have larger WYX from Nov 2013 high to Jan 2015 low, which could be labelled as possible Wave A completion. If correct then retracement bounce since, is likely a wave B (which technically can retrace much higher) suggesting that once complete, we would expect to see a strong 5 wave move to the downside for Wave C, OR continue to chop about in some complex corrective pattern in this range. Since that major low every up & down swings appears to be of 3 minor swings. It lacks any signs of showing clear 5 wave move up as essential for any new cycle to develop.
In Summary, we have 2 possible scenarios both suggesting limited upside and at least a retest of the Jan 2015 lows or new lower low to follow as detailed below:
Scenario 1: ABC with Wave C in the form of Megaphone or expanding (see schematic diagram on the chart). If correct then we might be close to making reversal in the 340 -350 zone.
Scenario 2: Expanded Flat in the form of 3-3-5 construction (see schematic diagram on the chart) which could be still be ABC zizgag of the Jan 2015 low. If correct then we have wxy to Wave (a), Wave (b) also of 3 swings and now in progress to complete Wave C with 5 waves in the form of possible expanding diagonal of 3-3-3-3-3 construction. In this event we could be near completing wave 3, a retrace for wave 4 and wave 5 to follow to the upside to complete this cycle.
Upon completion, we could develop more complex sideways correction OR have strong 5 wave decline to retest Jan low or make new lower low around 100 zone as being in proximity of wave 4 of one cycle degree lower as suggested by EW guidelines.
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.
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I am not aware of Bitcoin new as I don't really follow it. Primarily when one has no idea if the new is already reflected in the price or at what point it become discounted. Often "Big Money" uses events to drive price in their desired direction to exit. So, it is very hard me to make sense of the news, though I never completely ignore it. Just don't follow it closely.
If we have the retracement the price action might give more clues.
Really appreciate your profound reply in your old chart. As your mention cycle, I'm wondering how to determine a cycle, would it be subjective? I review weekly chart and try to identify cycle for Dow Theory, I mark it in depth red arrow, a series of LH and LL. If that's the case, then with truncated HL (failing swing), a closing HH above previous closing LH which is already fulfilled, would reverse long term downtrend if Dow Theory is focusing on closing price only.
So is you follow HH & HL sequence then you would need at least 2 HH swings and 2 HL swing with breakout over the second High. But then you might have missed a big portion of the move. That is why I have difficulties and feel that whilst Dow theory is good it still has issues over when the actual change takes place or likely end.
I also make a longterm wave counts with your idea. Comparing historic RSI and weekly 30MA (marked in red cycle), it looks obvious a new cycle seems to have begun. And longterm correction looks like it's WXY with Y is 3-3-3-3-3, and there's hidden divergence between wave 2's top and wave 4, forming wave 5 and wave 3 as double bottom and large WAVE 4 finished. Do you think that would be a possible or probability?
Accepting that this count is correct, then we need to evidence that we have new bullish move for which 5 wave impulse which is mandatory. This needs to be done not only on larger time frame but from the initial lift off using smaller time frame. I am struggling to confirm that. If you could show me then I might be able to see where I have gone wrong. Till then I am holding my view that this is not a new cycle.
Yes I did say this several times that we could get very deep retracement, common Fib 38.2%, 50%, 61.8% or even more. This means that we could go to $800 level (not saying we will) but still it would be bear market rally.
I am not sure about abc flat you are referring to. However, I think the the current cycle began from Jan 2015 low and so far it seems like either abc zigzag, or double zigzag. P&F chart shows clear abc zigzag with wave c currently in progress and is well mature. Either this could be the end only retracing 23.6% or we might get a pull back and then another swing higher. But for now 430 - 450 zone if we make it there might be all for this cycle. we will then see what price action suggest and review accordingly.
You might have seen this chart in previous posting and I have updated it where you can see may be we have the low for Major Cycle Wave A, so what we are progressing in is Wave B. Wave B is is a zigzag made up of minor wave abc doe single zizgzag or wxy for double zigzag. From this point & fig chart filtering out all noise and spikes, we are in wave c which always have impulsive 5 waves which often give the appearance that we are in new bullish cycle. Ultimately this will end and retrace to form wave x for another zigzag or reverse entirely. For now 430 -460 zone could be potential reversal or intermediate top.
Will review as new price data will help to clarify.
If so, going long on this could be better (at your own risk of course). From Nov 2013, we can see that BTC busted up RSIs and Bollinger bands once the frenzy got going. The daily chart means little - it will tease those who try to short - pulling back a bit here and there then rocketing upward again. I'm considering going long at the next important pullback.
If this is a wave c of Retracement rally then the reversal will be total. For now remaining long is the right thing whilst staying on guard.
I've been maintaining my counts throughout. While my count slightly differs from yours, the prognosis is the same: One more price drop to $120-$60 range before new wave up.
TLDR; I have Wave 4 of an expanding triangle completing now.
Thx and hope all is well with you...
As regards Youtube video, yes some of them were rather long. Do you mean do another video explaining current analysis? There isn't much to add really as a concept overall picture remains the same.
Since Nov 2013 high we have had many wild gyrating moves resembling to near parabolic both up and down resulting in big spikes on turning points.
May EW analysts have attempted to label these and some are concluding that we have triple zizgzags with ZZ being the Aug 2015 low in order to suggest that we have now commenced a new bullish cycle. They might be right but I have been concerned with that counts as move of the lows even Aug 2015 low is hard to count as 5 waves up.
I have shared this P&F chart which removes all wild spikes and shows just major price action. On this chart I have now modified the wave counts and have been sharing it for some time now, which suggests that we have Jan 2015 low as possible Wave (Major Wave A) low of zigzag decline from Nov 2013. So now we are progressing in wave . If correct then we have 1st zigzag retrace to upside of that wave B.
More sides ways congestion (Or Range ) will likely follow before second zizzag could develop to complete Wave on my chart.
Conclusion is that the Bearish cycle commencing since 2013 high is still in progress.
Using Elliot Wave Theory, @DanV is suggesting we are in wave B that is part of a larger A-B-C wave (which is a corrective wave - or in this case part of the 2 year bear market).
Here is a sample definition of wave B.
Wave B: Prices reverse higher, which many see as a resumption of the now long-gone bull market. Those familiar with classical technical analysis may see the peak as the right shoulder of a head and shoulders reversal pattern. The volume during wave B should be lower than in wave A. By this point, fundamentals are probably no longer improving, but they most likely have not yet turned negative.
So while wave B may appear to be the start of a new bull market, it is actually only bullish in the short term, and will reverse to form lower lows in the form of wave c. Hope that helps!
You must have seen often a market retraces 78.6% of the swing without altering overall direction of the major trend. Not 12 month high demonstrate new trend as it could be just a retracement.
However, if it wish to get to 650 or even high and convinces you that we are in Bull market then let it be. I would not wish to argue against that. Specially when I can be wrong too.
Hope this helps.
I've been quietly watching the charts the last few weeks, my positions not moving, just sitting here waiting. But I believe we're ready to drop tonight through Thanksgiving, then we'll see things bounce back as the holiday season really kicks in.
Even if we did fall to $150-170, I wouldn't feel bad losing money in my positions, cuz by then hopefully I'll be ready to buy a lot more Bitcoin and be ready for the true breakout.
I do agree we have no clear line of breakout from the 2 year downtrend. We have broken above, but only slightly and the sideways action shows uncertainty. 2 Years is a long time down, and it will take some time for people to start to feel confident enough to buy back in and FOMO.
Anyway, keep up the good work. We'll see you in TV chat again soon as there is movement. ;-)
When any analyst publishes a chart it is entirely based on his or her interpretation of price action to date. IN very volatile instruments and one with relatively limited market size, when a particular a move could overshoot anticipated price targets from snapshot view. So I fully accept that I do not get the actual targets spot on. You are probably very correct in your analytical view of future price action you describe.
Right now, I think both scenarios are open, namely one that holds around 300 and head higher to 600 - 800 area before dropping towards last major and the other being that it actually drops to 150 or even lower before commencing new bullish new bullish cycle.
I will review this and update my view with more price data as we progress.
Thanks again and see you later.
I am trying to do some wave count in weekly chart and found there're two possible situations. One is WXY with minor wave 5 forming double bottoms indicates bearish trend ended and new bullish trend started. Another is from Jan 2015's low forming an ABC flat retracement (3-3-5) where C wave is an expanding diagonal which also is megaphone pattern. These wave counts seem to make sense but hinting different directions. If you don't mind, may I ask how you determine which wave count situation would be the case in your knowledge base and experience.
Also, I compare T-bond (US1!) with BTCUSD a they are inverse related. If that is the case, considering 30 years T-bond price is probably topping, then BTCUSD may have a ride. Here's the chart
Regarding truncated wave 5 with low firmed in Aug 2015, I have seen that being suggested many time by various analyst but subsequent prices action to recent pike high do not confirm new bullish 5 wave count. It looks like some sort of abc zigzag. Just my view.
So until I see what is needed as minimum to confirm new bullish cycle I think we are in retracement biunce. Possibly the recent Spike High being formed as wave A of ABC bounce. If correct then we are progressing in wave B.
That is all I can say at the moment. Hope it helps.
Indeed that remains one of the strong possibility in terms of your labels A,B and C though not sure if the i-v applies in wave A in addition to 1-5 as your wave 3 looks more like 3 swings and not 5 as you suggest in your chart above, nevertheless same out come.
The only other possibility which could avert the price drop below 250 approx is if we have much larger triangle being formed including all price action since Nov 2013 high as wave 4 of larger degree. For this to remain possibility the uptrend line from Jan 2015 low needs to be held. Too early to tell at present.
I agree about 1-5 waves looking as 3 swings. The reason it was marked as such is downward move from Nov 2013 does seem to correct whole bull market 2012 - 2013. If we look at time element it is more likely such a long bear market is response to whole bull market, not just part of it.
EW may not be the best tool, but then I am not aware of any disciple or approach of TA can give you consistently exact lows and highs well in advance.
My view is that any TA is an attempt to frame the price action to enable trader to predict or anticipate likely future move. In that context EW which do incorporate other forms of tools such as trendlines/ trend channel/ Fibonacci, momentum etc. So I feel it does have some advantages that other forms of TA do not.
With all things, more data always clarify details but often the trade off for that is that some of the move could be over, unless in major directional trend that will last a long time.
Appreciate your thoughts anyway. Thanks.
First of all let be absolutely clear. I have not inherent to agenda nor wish necessarily wish to see the price of Bitcoin's decline or will it just because I might say so. Since I get the feeling from several questions and my interaction with others that leaqds me to suspect that many feel that no matter what, I will always suggest that the price will decline.
So in my answer to the above, forgetting that this is a Bitcoin (and all the competing sentiments I observe amongst the Bitcoin community) and taking this as purely a financial instrument (which in the minds of many clearly it is not and I have no issue with that), and looking at the price action since Nov 2013 high, it seems that we have a zigzag decline resulting in Jan 2015 low. Ordinarily by this corection, I could conclude that overall correction is complete. If this was the case however, you would at least look for 5 wave impulsive move of the Jan 2015 low based on EW principle. Many analysts and traders feel that the strong rally we have experienced is the evident 5 wave move I should be looking for.
However I cannot see that being the case, nor has anyone yet satisfactorily shown me the valid wave counts. So if we do not have the 5 wave impulsive move of the Jan 2015 low, then in my view it seems that whatever it is, it's a part of corrective move of the decline from Nov 2013 - Jan 2015. Now this could either be a zigzag or some sort of triangle or other combination of moves to the upside, even if this results in a price moving much higher ie, 700+ but on completion would likely result in eventually dropping back towards Jan 2015 low.
Now if you are realistic, I don't think anyone in their right minds could say with 100% certainty which of the eventualities will be true. I am not aware of any method which can say that the final low is in. Only time will tell.
So in that context, I am open to both possibilities that final low is in place or that we are retracing the decline from Nov 2013 high to Jan 2015 with final low is yet to form.
This might not be the answer you are looking for nor will it assist you or anyone who might feel that they wish to know where is the absolute low. However, no matter how may times I am asked, I cannot add any more than above and which in various forms, I have already expressed before.
The chart below, is only intended to give you some ideas of possible outcome based on EW principles as likely patterns in this overall juncture. In deed there may be some other permutation or combination of them, I cannot reasonably envisage nor be able to show as the chart will become just jungle of lines. But hope it will illustrate both the likely complexity and the possibilities that the final low is yet in the future.