BTCUSD - BitStamp's Bearish Cycle Not Over Yet.

BITSTAMP:BTCUSD   Bitcoin / U.S. Dollar
Recently, the intermediate bearish trend line from the January 2014 high has been severely tested and appears to have been breached.

This has caused so much excitement and relief amongst long-term Bulls, and others who have been bag holders, as they are renewed in their prospects of reducing losses and salvaging self-confidence.

In my previous charts (since the December 2013 low, and subsequent January high), whilst accepting sharp rallies, I have maintained that we are in a bearish cycle. Initially, it appeared as a possible contracting triangle, though I made a point that it could fail and we may just make a new lower low. That did indeed materialise in April 2014.

At that point, the entire move into the $550 area did not display the signature characteristics of a 5-wave             impulsive move of the low. In fact, the entire drop with potential 3-drive down from January's high appeared to be forming a falling wedge with a potential target of the $320-$300 zone.

Now, that pattern could have failed. I say could have failed because, if it fails to continue higher and break back below the $425 zone, then that pattern is still ongoing, and $320-$300 would be the least bearish target.

I have shared an alternative to this in the chat a few times and this is what I am now publishing. So, either we will still have the falling wedge or we'll have a possible "Running Flat" as shown in the chart. Should we see confirmation of this "Running Flat", we progress to the $580-$600 range, which is all of the following:

1. An area with Fib confluence
2. A Structural resistance
3. A Bearish channel top

This pattern could have a final leg down, which would very likely induce overwhelming emotions of despair as it sinks to the ~$200 level.

Again, the $200 zone is AB=CD measured move target and another Fib confluence. As you all know, I am relatively cautious and, hence, $200 would be good enough for me. However, EW guidelines suggest that upon completion of a bullish cycle, the retracement takes us back to the vicinity of wave 4 (at one cycle degree lower). That, in fact, is in the area of $120!

Now, I know this might be very annoying and incomprehensible to Bulls, and others who follow "Fundamentals" very keenly. I cannot say right now which of these targets will be achieved, but it is sufficient to note that, irrespective of if we reverse at $600 (or even $800), we are in a bearish cycle, and a move of the low does not support a new Bullish cycle.

Indeed, you might completely disagree with my analysis, but please do not claim I didn't warn you.

Do select to follow myself and these charts for further updates. Feel Free to check out my YouTube channel, which has recordings of live sessions dealing with these larger-degree wave IV corrections. At the time of this post, my most recent video can be found here: https://www.youtube.com/watch?v=G8Zuj8xYUpY

In fact, stay tuned for possible weekend session(s) in which I will demonstrate safer methods for trading like a whale, without being tied to your charts, even with a relatively modest account. Interested? Contact me and let me know at: tradingcharts4wealth@gmail.com

(Copy-editing assistance freely provided by upon request.)
Thanks for the warning, its good to have another point of view
Sorry, but I don't quite follow. You are charting a divergence showing an UPTREND in RSI as proof that the price will go down?! Unfortunately it seems that your chart became outdated within 1 day following the recent rise(s).

There is a possibility of a minor retrace, but certainly no TA to prove a significant one. The weekly charts are very revealing at this point as per my previously published ideas.
DanV MarkZ
Hi, thanks for your comment. I was initially just suggesting possible resistance for retracement. But you know how these things develop, they morph in to another pattern and an could even signal a high for this rally. Only time will tell but good to be aware of it.
Interesting analysis, it may not come to pass in this exact way but I can certainly see it happening at some point down the road
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Please note that there was another big wave of growth in late 2009-2010, before MtGox opening. So, I would say we are aiming to the final target at $2-$32
ShortThePlanet ShortThePlanet
If you are interested, I can provide you prices data from that period.
From weekly time frame perspective
"Indeed you might completely disagree with my analysis but Don't say you have not been warned."

I do, and thanks for the warning.

I think you will end up being proven wrong and the bottom is in. Indeed you might completely disagree with me, but don't say you have not been warned ;)
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Purely out of interest study Gold chart, This one is on weekly but comparison with Bitcoin on Daily looks so similar to me
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