RogueDave

BTCUSD - Elliott Wave Analysis - Wave IV Update

BITSTAMP:BTCUSD   Bitcoin / U.S. Dollar
With the recent decline in the BTC price, to the 1830 price level, and falling below the 38.2% Fibonacci retracement intraday, but closing very near it, it is possible that wave A of IV has found it's completion. If so, the price will rise in a counter correction mode to retest highs near the Wave III peak at 2980. My guess is somewhere short of 2900, it will find the wave B zenith, about July 30-31, just prior to BIP148 and/or SegWit2x becoming active on the blockchain on August 1. With Uncertainties about transaction processing staring BTC in the face, the advance will halt and a new lateral or downward wave C will begin. What form wave C will take is impossible to forecast, but my guess is it will be a long drawn out triangle with a flat top, and a rising bottom, a Barrier Triangle that may continue onward for another month or two, as concerns alleviate, and uncertainties about a hard fork & chain split are attenuated. Concerns about a hard fork could similarly drive the price of BTC down deeply, potentially surpassing the lows that have just been witnessed. In this case, I would anticipate a falling wedge , or another sharp zig-zag downward.
Comment: Daily Chart showing the close just above the 38.2% Fibonacci retracement level.

Comment: I've been have a conversation with another member about where we are in the "Big Picture" for BTC. What I'm doing here is building my Big Picture case for Wave IV.

Wave I (or wave 1)

(Note this excludes some Mt. Gox data, but it really is trivial in that it forms an alternative case for wave 1 of 5 of I. After 5 of I concludes at its zenith near 1160, it becomes a footnote in history.

Personality of First Waves (Wave 1):

About half of the first waves seen are part of the basing process and tend to be heavily corrected by Wave 2. Many people feel that this is one more opportunity to trade in the direction of the previous trend, and, if that was down, many will sell short. However, market breadth and volume will subtly increase.

The other 50% of first waves will rise from large basing price movement formed by the previous correction and these tend to be dynamic and only moderately retraced. This is a good probable spot to have a Wave 1 extension."


Wave II (or wave 2)

Personality of Second Waves (Wave 2):

Second waves tend to retrace so much of Wave 1 that most of the profits gained are eroded. They tend to end on low volume and low volatility. In a bear market this indicates a drying up of selling pressure. However, during Wave 2 most investors are convinced that the bear market is here to stay.


This sounds like the decline to 152 in early 2015. After the prior high, initial extreme volatility marked by a string of lower highs down to A, then a little bounce to B, followed by the grinding lower, and lower, and lower lasting a year and ending on low volume and low volatility at C.

Wave III (or wave 3)

Personality of Third Waves (Wave 3):

"Third waves tend to be strong and broad. They are typically unmistakable, as confidence in the direction of the new trend is clearly evident. Wave 3 usually generates the most volume and price movement, and they are the most likely wave to extend. The third wave of an extended third wave will likely be the most volatile point of strength in the new trend and things like price breakouts, continuation gaps, volume expansions, and increased breadth will accompany it. In a third wave in a stock index, nearly all stocks will participate. Because of the dynamics of this wave, it will provide the greatest clues to the correct wave count as it unfolds."


Footnote to the overlap that occurs in wave 4 of (3) of 1 of 5 of III.
Bitfinex Hack - http://blog.zorinaq.com/bitfinex-hack-20...

Here is a closer look at the latter portion of the Wave III rise:

Wave IV (wave 4)

Personality of Fourth Waves (Wave 4):

Fourth waves can be predictable in both depth and form because of the guideline of alternation. They tend to differ with the previous Wave 2 of the same degree. They often trend sideways building a base for the final Wave 5 to spring from. In a fourth wave in a stock index, lagging stocks will tend to build their tops and start declining.

And this brings us back to where we are today.


Wave II (or 2) was steep & deep. Wave IV (or 4) is shallow, and relative to the year for Wave II, is looking short(er). Wave A won't truly be confirmed until looking at it in hindsight.

Personality Reference Source:
https://stockcharts.com/school/doku.php?...
Comment: Update: Proceeding according to the trading plan. The ascent to A of A of B of IV couldn't have been more spot on. Luck was on my side, it was a fairly easy target. Tougher is to call the transition to B of A of B of IV. but that too is shaping up nicely. A lateral channel is developing that forms the path from A to B.

Closer view of the graph and process with 30 minute candles chart:

Comment: What an awesome run. Blew my forecast to smithereens. LMFAO.

If this hold, Big IF... What an amazing Bull Trap, and Short crushing. The amount of short this high a day or two ago coming across my feed was huge. Anyway...

If this holds, the 2938 high to mark B of IV will be a perfect level for C of IV to begin the final and downward leg of the Flat. Since the high does not extend above the old 2980 price level (yet), the journey down to the A price level at 1835 would mark the conclusion of Wave IV.

I'll open a new Idea to capture what I think Wave C of IV holds in store.

Comments

Theoretically we could have finished lower degree 4 and final III top is ahead (now finishing wave ii of 5).
As shown in this chart for example


I wonder is there any way to distinguish these counts??

Personally I'm starting to get out from btc as it jumped above 2300. And only breaking above 3100...3200 will convince me in bulllish trend continuation as user10000 suggests
Your count suggests we should sell all the btc before 28..29th june for fiat.
Also its interesting question whether ETH/alts will accumulate funds leaving BTC when hardfork happen. ETH is still overbought imo.
Reply
RogueDave mmitkevich
@mmitkevich, Hi, thanks for your thoughts and for sharing ideas. The thing about Elliott Wave Analysis is that the true count won't be know until the count is well into the past.

What looks to user100000 like a wave 1 & 2 of 5 of (3) on their charts, is what looks to be the B & C of IV of a flat in my charts, or vice versa.

Looking back over the labeling, where user100000 and I divert paths, is after our 1 & 2 that straddle the 1000 point level back in early January of this year. After that, they keep everything at a lower degree with the 3000 level topping their wave 3, while I had my 3 top out at the furious rally in May, with June being Wave 5, while the user's wave 5 is yet to come.



They may think today's strong advance is appropriate as a component of lower order wave 3, and while it's blowing apart my detailed forecast, it does fit the personality and character of a corrective B, a bull trap in this case.

"B Waves (Wave B):
Wave B catches people in the wrong direction. It performs the task of enticing the suckers to jump into the market. This is where bear or bull traps happen. As a general rule, B Waves tend to show lower volume. "
https://stockcharts.com/school/doku.php?id=chart_school%3Amarket_analysis%3Aguidelines_for_applying_elliott_wave_theory

Each person's money management decisions are their own, though I'm not a believer in all-in/all-out. IMO take your position down to an 1/8th or a 1/16th or whatever works as a tracking position. How wave C of my flat, or combination shapes up is unknowable. It could take BTC back down to A, or it could form a barrier triangle, flat top with the worst damage done at it's beginning.
Reply
mmitkevich RogueDave
@RogueDave, I really appreciate your detailed answer.
Well, bull trap definitely makes sense. Do you think we could have B wave overhigh above III? And if yes, will you still treat it as B not 5 if it goes to, say, 3400 without any retrace (wave C)?
Reply
thank you, Dave. You're awsome.
Reply
RogueDave unknownplayer
@unknownplayer, Happy to post my thoughts and ideas. Thank you for your kind words.
Reply
Wow, now that's very helpful information. You're a true teacher of this stuff. Thank you.
Reply
RogueDave silmaril0875
@silmaril0875, For a broad website with international reach, I've been surprised how few quality Elliott Wave posts show up.

I've seen people post stuff that clearly isn't well though out, they hold preconceived ideas and refuse to let go. It is easier to fool oneself into believing what isn't, rather than to be meticulous about the results of their work. Some will be so focused on minutia of the numbers, counting tick by tick moves on 5 or 15 or 30 minute charts, they lose sight of the big picture. Worse, they want to project onto chart their nonsensical view, and they won't go back and change or correct a count. Worst, they slap some numbers and letters on charts, call it Elliott Wave analysis, and turn people off to its utility, beauty, and functionality. I've made plenty of mistakes, and I go back and fix them. I may be a teacher, but I'm not a master. I try to always be my own student, and learn from my mistakes.
Reply
nice chart with elliot
Reply
RogueDave AzrulAzir
@AzrulAzir, Thank you. I appreciate your comment.
Reply
I thought B should not go up all the way to where III ended.
Reply
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