The previous hyperwave analysis of BTC is now invalid as one of the two assumptions proved to be false. Upper targets remain the same, however the entry point has been lowered to $5,000, with the potential to reach $4,000. This target is found at the apex of the prospective descending wedge formation, which intersects with the phase 2 trend line. This trend line cannot be broken by a weekly close, else the hyperwave is invalidated and will not complete the waveform without resetting to phase 1.
Analysis:
- Breakout is considered to be the break above and hold on $1000 (indicated by the power icon). - Peak is considered to be $20,000 even. - Fibonacci retracement taken from breakout to peak. - Gann fan with 0 at breakout and upper trend on peak - Volume profile showing POC around $8,300 - Phase 2 trend was drawn from breakout to weekly close on phase 1 at $1,000 (see Figure 1 of attached Amazon chart) - Descending wedge resistance and support drawn along weekly candle closes. - Fibonacci time zone with 0 at breakout and 1 at beginning of phase 4 of the nested hyperwave.
Assessment:
We are currently in a potential phase 2 trend, with a clear phase 1 breakout pattern similar to that seen in the Amazon chart. I have linked an analysis of Amazon, which corroborates the potential of the impending burst of the tech bubble and beginning of a global hyperinflation event, resulting in a hyperwave in bitcoin.
Of all waveforms that demonstrate the characteristics of phase 1, 25% continue to complete all 7 phases. This is currently the statistical probability that BTC is expressing a hyperwave formation. Once price breaks to new highs while maintaining a newly established and steeper phase 3 trend line, the probability grows to 85%.
I have estimated the phase 3 trend line by transposing the angle of the upper Gann line to create a channel and provide support at the intersection of a Gann fan and Fibonacci level at $30,000. This trend line would support a break above $20,000 by the end of the year.
Trade Strategy:
The best way to trade a hyperwave is to be long all the up and short all the way down. However, the key levels indicated by red and green boxes are potential buy and sell zones for repositioning during the third wave. Another factor to consider is the change in probability from 25% to 85% at the break of $20,000. One could essentially "double down" on the breakout of $20,000 with the increased probability that the full 7 phases are far more likely to occur, and that $20,000 is unlikely to be retested.
The exponential growth of Phase 4 is likely to occur in the second half of 2020, resulting in prices upwards of $1,000,000. Once the wave is complete, there will be a strong short opportunity, as almost all hyperwaves end back where they started, at phase 1.
Comment
⋅
The Phase 2 line is also supported by the lower Gann level, strengthening the support of this trend and the validity of the hyperwave.
just one question.
On other analysis wave 2 is not an extension of wave 1. It is not on the same linear as wave 1?
OrigamiOracle
⋅
Hey @icypaul, Phase 1 is the price ceiling established over a very long time. In the case of BTCUSD that is $1000. This is a flat line that extends far into the past, represented by a horizontal dashed white line in this chart.
The breakout above phase 1 establishes a linear uptrend angle, taken from the breakout point to the first touch and support on the phase 1 price ceiling. This trend line is phase 2. Then, once price accelerates into a steeper trend line without breaking down with a weekly candle, and price breaks out to new highs, this is establishes as phase 3. Phase 4 is the final phase, where price is essentially vertical.
The attached Amazon chart shows a clear example of this pattern.
Tyler Jenks is an expert on hyperwaves and explains it well on his youtube channel: youtube.com/watch?v=QceWX0I953s&t=991s
Also, just to clarify, hyperwaves are not Elliot waves, and do not follow the same rules. The impulse sets will likely come in Elliot waves, but the overall pattern is unique and very rare. Only a handful have occurred in the past century. Eg. 1912, 1913, the beginning of the Federal Reserve, both world wars and Bretton woods in 1944.
On other analysis wave 2 is not an extension of wave 1. It is not on the same linear as wave 1?