The BTCUSD chart is holding true to an ABC correction pattern.
Wave B of the corrective pattern retraced slightly more than I anticipated, and slightly quicker.
The BLUE ABC pattern is my original prediction. The BLACK ABC correction accounts for where Wave A and Wave B actually ended, and includes a modified prediction for Wave C.
We MAY see an ending diagonal pattern for Wave C. This is outlined by the thin pink/purple trendlines and points (i --> v). This typically occurs in the termination of an impulse wave (e.g. Wave 5, Wave C), and is characterised by Wave 1 and Wave 5 overlap (an EW golden rule that is broken in this unusual case), and a 3-3-3-3-3 pattern. As we can see in Wave i of Wave C, it has made a 3-wave pattern (8H chart or shorter) on this first leg already - so am considering this possibility.
OVERALL TA: I anticipate the correction to take us to the area marked by the red box, and if an ending diagonal pattern continues, to the area marked by the green box. In any case we should expect BTCUSD to move to point (v) or the black/blue (C) highlighted on the graph.
This correction could well end before the 19th January, for the reasons I explain below.
FURTHER EXPLANATION:
My 29th December prediction had Wave B at the 61.8% retracement of Wave A - $16,352 on the 10th January.
Instead we had a retracement slightly more than 61.8% of Wave A for Wave B - $17,260 - but not quite a 73.6% retracement of Wave A.
Wave B also terminated earlier than predicted, on 6th January.
For anticipated future price movements, it is not unusual to see a "self-fulfilling prophecy" - for example, if investors believe on date X the price will drop, it is likely that the bears will become exhausted before that date, and the actual drop will occur earlier than anticipated.
The vertical red dotted line on 19th January corresponds with the 60 day cycle between major corrections. It is likely we will see the bottom of the correction before.
As for price, I believe we saw a slightly greater retracement than the predicted Wave B termination point due to the extreme bullishness of the market recently and overall (we are in a mid-term bear market, but the long term market is undoubtedly bullish - fractals at play once again).
I am always modifying my predictions based on the most recently available data, and account for multiple possibilities.
SOME OTHER TA:
If we See corrective wave C occurring without an ending diagonal, I predict the black ABC pattern will hold true (with the black Wave C running parallel to my original 29th December blue Wave C being accurate)
IF we continue seeing an ending diagonal pattern for Wave C:
On an 8H chart Wave (i) is hitting the bottom of an ichimoku cloud, which is an area of support & possible bounce back to Wave (ii), which I have terminating slightly outside of the upper Ichimoku cloud
Wave (iii) I predict will terminate at the 50% retracement between the 12th November low (the largest correction recently) and the 17th December High
Wave (iv) I have terminating at the bottom of an ichimoku cloud, and Wave (v) terminating slightly above the key 0.618 retracement drawn between 12th November and 17th December (green box)
It is still possible we could see Wave C terminate at a much higher price - forming a "flat" ABC correction. This would not be surprising given the extreme bullishness of the market on larger time frames.
To account for other possible Wave C termination points, see the dotted red lines with arrows.
In any case only one of the possible (but unlikely) forecasts falls outside the red box I have drawn
STRATEGY:
This depends on how prepared one was for this correction.
If you exited trades earlier and hold cash, I would gradually buy cryptocurrencies on sale (maybe 30% of overall cash holding now), and then wait for a further correction before puchasing more.
prepare for all possibilities, especially a flat ABC wave formation, with Wave C following the red lines
Wave B of the corrective pattern retraced slightly more than I anticipated, and slightly quicker.
The BLUE ABC pattern is my original prediction. The BLACK ABC correction accounts for where Wave A and Wave B actually ended, and includes a modified prediction for Wave C.
We MAY see an ending diagonal pattern for Wave C. This is outlined by the thin pink/purple trendlines and points (i --> v). This typically occurs in the termination of an impulse wave (e.g. Wave 5, Wave C), and is characterised by Wave 1 and Wave 5 overlap (an EW golden rule that is broken in this unusual case), and a 3-3-3-3-3 pattern. As we can see in Wave i of Wave C, it has made a 3-wave pattern (8H chart or shorter) on this first leg already - so am considering this possibility.
OVERALL TA: I anticipate the correction to take us to the area marked by the red box, and if an ending diagonal pattern continues, to the area marked by the green box. In any case we should expect BTCUSD to move to point (v) or the black/blue (C) highlighted on the graph.
This correction could well end before the 19th January, for the reasons I explain below.
FURTHER EXPLANATION:
My 29th December prediction had Wave B at the 61.8% retracement of Wave A - $16,352 on the 10th January.
Instead we had a retracement slightly more than 61.8% of Wave A for Wave B - $17,260 - but not quite a 73.6% retracement of Wave A.
Wave B also terminated earlier than predicted, on 6th January.
For anticipated future price movements, it is not unusual to see a "self-fulfilling prophecy" - for example, if investors believe on date X the price will drop, it is likely that the bears will become exhausted before that date, and the actual drop will occur earlier than anticipated.
The vertical red dotted line on 19th January corresponds with the 60 day cycle between major corrections. It is likely we will see the bottom of the correction before.
As for price, I believe we saw a slightly greater retracement than the predicted Wave B termination point due to the extreme bullishness of the market recently and overall (we are in a mid-term bear market, but the long term market is undoubtedly bullish - fractals at play once again).
I am always modifying my predictions based on the most recently available data, and account for multiple possibilities.
SOME OTHER TA:
If we See corrective wave C occurring without an ending diagonal, I predict the black ABC pattern will hold true (with the black Wave C running parallel to my original 29th December blue Wave C being accurate)
IF we continue seeing an ending diagonal pattern for Wave C:
On an 8H chart Wave (i) is hitting the bottom of an ichimoku cloud, which is an area of support & possible bounce back to Wave (ii), which I have terminating slightly outside of the upper Ichimoku cloud
Wave (iii) I predict will terminate at the 50% retracement between the 12th November low (the largest correction recently) and the 17th December High
Wave (iv) I have terminating at the bottom of an ichimoku cloud, and Wave (v) terminating slightly above the key 0.618 retracement drawn between 12th November and 17th December (green box)
It is still possible we could see Wave C terminate at a much higher price - forming a "flat" ABC correction. This would not be surprising given the extreme bullishness of the market on larger time frames.
To account for other possible Wave C termination points, see the dotted red lines with arrows.
In any case only one of the possible (but unlikely) forecasts falls outside the red box I have drawn
STRATEGY:
This depends on how prepared one was for this correction.
If you exited trades earlier and hold cash, I would gradually buy cryptocurrencies on sale (maybe 30% of overall cash holding now), and then wait for a further correction before puchasing more.
prepare for all possibilities, especially a flat ABC wave formation, with Wave C following the red lines
Comment:
Cash holders, as described above, if I was in your position I would gradually enter new trades, accounting for the fact we may yet see a deep or shallow correction.
It is too early to definitively tell.
Trading is game of probabilities. No-one knows the future - we can predict areas of probability in time and price, but ultimately we must account for all possible outcomes.
It is too early to definitively tell.
Trading is game of probabilities. No-one knows the future - we can predict areas of probability in time and price, but ultimately we must account for all possible outcomes.
Comment:
I should clarify that I would MAINLY HODL if not already in fiat at this stage - Wave ii could be a good place to liquidate some cryptos, but it would likely be unwise to sell everything, as this is all a game of PROBABILITY and while the charts will likely follow this forecast, they may well go against it, sooner or later.
That's why risk/reward analyze and/or appropriate position sizing strategies are integral to consistent profit and minimal losses.
Do not treat trading like gambling! A home run is not going to happen, and if you fail to accommodate these strategies into your personal methods, it will likely end in tears.
That's why risk/reward analyze and/or appropriate position sizing strategies are integral to consistent profit and minimal losses.
Do not treat trading like gambling! A home run is not going to happen, and if you fail to accommodate these strategies into your personal methods, it will likely end in tears.
Comment:
Apologies I had the green box too far to the right and not high enough.
The red box area and all arrows are the same
The red box area and all arrows are the same
Comment:
I would not cash out large portions of investments at this stage if you have not already done so, as it is possible we may not go much lower. In this case, I would HODL.