To put it simply, I believe we have seen or nearly seen the end of the viscous bear market from early 2018 to 2020 and am looking for evidence/confirmation of that change of trend. I am speculatively positioned accordingly.
Long term trend changes can be very volatile and frustrating times in markets. Add that to an already volatile nascent asset class market like crypto, and you have a pure powder keg. This is where we are at.
Trading or investing at turns can be very profitable, but also very risky. Much more so that just investing in the dominant trend once it presents itself. I will not give you trading or investing advice, but I will post my own analysis that I use for my own trading and investing.
Two reasons I do this.
#1 - Opening my analysis up to critique helps me become a better trader (most of the time... some feedback, especially on Twitter is just pure toxicity).
#2 - I enjoy it. The idea of navigating seemingly random markets with the belief that repeating patterns of behavior can be seen in the charts is just cool (and also, admittedly pretty far out there for newbies).
Ok, so down to the analysis.
This is a continuation of an analysis that I started back in October of 2019 (see link below).
Unless you are really brand new in the crypto space, or have been hiding out under a rock, the market has been rallying for the past few months since the big pandemic scare asset selloff of March 2020 hit all risk based assets. Yes, Crypto still behaves largely as a risk asset, despite claims that it is a "safe haven" for the rampant fiat money printing taking over the world. It may sometime become that safe haven (and I believe it will), but it is still a largely nascent risk asset class.
Calls of alt season, the end of the bear market are loud and strong... and they very well may be true. If you have been following my posts on the long term Elliott wave counts, you will know that I am VERY bullish on the prospect of XRPUSD.
My last analysis (Mar 13th) coincided literally with the bear market low (.114 on Bitstamp). My final statement was this -
To summarize. The evidence points to the fact that the bear market for XRP has just ended or is very close to ending. A smaller degree 5 waves up and 3 wave retrace will allow for a near perfect risk/reward opportunity... should prices experience a sustained break through the lower channel, then exiting will have minimal losses (a few pennies). On the other hand, the reward is in terms of $'s as a wave 3 will push prices up well beyond the wave 1 high of $3.3.
This is still my dominant long term view, and as I said before, am positioned accordingly. The evidence/confirmation for that view will happen on the charts: a 5 wave impulsive price pattern on the 4 hour scale. So far, we have 3 clear waves up from the low of March 13th (for EW newbs, a 3 wave pattern is corrective, not dominant). The correction of the last month MAY be a 4th wave. If so, then we have at least one more wave higher to complete a 5th wave (of the first wave up in the next bull market) before a more substantial correction plays out.
This confirmation is CRITICAL to using Elliott Wave to find low risk/high probability trades. Without clear evidence of an impulsive, 5 wave pattern up, we are left wondering if the bear market is still with us. With a clear 5 wave up pattern, we can have more confidence that the trend has changed. A classic low risk trade setup in EW occurs after an initial 5 wave pattern completes (lets call it wave 1 or A) and a subsequent 3 wave correction (wave 2 or B) is well underway (which typically retrace at least 50+% of price). At this point, we know where we are wrong since the EW rule is - wave 2's cant retrace more than 100% of wave 1. Having defined risk is so important to traders... more important than anything else IMHO (if you like keeping your hard earned $).
Here is what to watch for on the 4 hour charts. Look for an impulsive 5th wave up to new highs (probably into the .40's, but perhaps higher), followed by a substantial correction. If we head below the lesser degree wave 1 (most likely wave 1 ending point is .2503) before a fifth wave happens, it is likely that the bear is still with us, for at least another nominal low, or test of the bear market lows. Either way, once we have EW confirmation, I will be sure to update you on this analysis. The next few months could be an exciting time...
Be safe out there. Fires, hurricanes, pandemics oh my!
Long term trend changes can be very volatile and frustrating times in markets. Add that to an already volatile nascent asset class market like crypto, and you have a pure powder keg. This is where we are at.
Trading or investing at turns can be very profitable, but also very risky. Much more so that just investing in the dominant trend once it presents itself. I will not give you trading or investing advice, but I will post my own analysis that I use for my own trading and investing.
Two reasons I do this.
#1 - Opening my analysis up to critique helps me become a better trader (most of the time... some feedback, especially on Twitter is just pure toxicity).
#2 - I enjoy it. The idea of navigating seemingly random markets with the belief that repeating patterns of behavior can be seen in the charts is just cool (and also, admittedly pretty far out there for newbies).
Ok, so down to the analysis.
This is a continuation of an analysis that I started back in October of 2019 (see link below).
Unless you are really brand new in the crypto space, or have been hiding out under a rock, the market has been rallying for the past few months since the big pandemic scare asset selloff of March 2020 hit all risk based assets. Yes, Crypto still behaves largely as a risk asset, despite claims that it is a "safe haven" for the rampant fiat money printing taking over the world. It may sometime become that safe haven (and I believe it will), but it is still a largely nascent risk asset class.
Calls of alt season, the end of the bear market are loud and strong... and they very well may be true. If you have been following my posts on the long term Elliott wave counts, you will know that I am VERY bullish on the prospect of XRPUSD.
My last analysis (Mar 13th) coincided literally with the bear market low (.114 on Bitstamp). My final statement was this -
To summarize. The evidence points to the fact that the bear market for XRP has just ended or is very close to ending. A smaller degree 5 waves up and 3 wave retrace will allow for a near perfect risk/reward opportunity... should prices experience a sustained break through the lower channel, then exiting will have minimal losses (a few pennies). On the other hand, the reward is in terms of $'s as a wave 3 will push prices up well beyond the wave 1 high of $3.3.
This is still my dominant long term view, and as I said before, am positioned accordingly. The evidence/confirmation for that view will happen on the charts: a 5 wave impulsive price pattern on the 4 hour scale. So far, we have 3 clear waves up from the low of March 13th (for EW newbs, a 3 wave pattern is corrective, not dominant). The correction of the last month MAY be a 4th wave. If so, then we have at least one more wave higher to complete a 5th wave (of the first wave up in the next bull market) before a more substantial correction plays out.
This confirmation is CRITICAL to using Elliott Wave to find low risk/high probability trades. Without clear evidence of an impulsive, 5 wave pattern up, we are left wondering if the bear market is still with us. With a clear 5 wave up pattern, we can have more confidence that the trend has changed. A classic low risk trade setup in EW occurs after an initial 5 wave pattern completes (lets call it wave 1 or A) and a subsequent 3 wave correction (wave 2 or B) is well underway (which typically retrace at least 50+% of price). At this point, we know where we are wrong since the EW rule is - wave 2's cant retrace more than 100% of wave 1. Having defined risk is so important to traders... more important than anything else IMHO (if you like keeping your hard earned $).
Here is what to watch for on the 4 hour charts. Look for an impulsive 5th wave up to new highs (probably into the .40's, but perhaps higher), followed by a substantial correction. If we head below the lesser degree wave 1 (most likely wave 1 ending point is .2503) before a fifth wave happens, it is likely that the bear is still with us, for at least another nominal low, or test of the bear market lows. Either way, once we have EW confirmation, I will be sure to update you on this analysis. The next few months could be an exciting time...
Be safe out there. Fires, hurricanes, pandemics oh my!
Comment:
We have clearly broken through the .2386 level and are currently hovering right at the 200 EMA and lower trend channel.
As I have stated before, having a 5 wave move up from the bottom gives us high confidence that the direction of the primary trend has moved from down to up. We are now left with a 3 wav move. The most obvious conclusion is that the primary trend is still down.
In Elliott wave, there are always alternate ways to view the patterns, both bearish and bullish. A trader on Twitter (Credible Crypto), posted a great analysis last week (pre-selloff) about a bullish option that has the bull market starting in late June ~.17xx (vs March at .11x which is the conventional view).
As I have stated before, having a 5 wave move up from the bottom gives us high confidence that the direction of the primary trend has moved from down to up. We are now left with a 3 wav move. The most obvious conclusion is that the primary trend is still down.
In Elliott wave, there are always alternate ways to view the patterns, both bearish and bullish. A trader on Twitter (Credible Crypto), posted a great analysis last week (pre-selloff) about a bullish option that has the bull market starting in late June ~.17xx (vs March at .11x which is the conventional view).
Comment:
His analysis required a truncated final bear wave to end in June. Truncated waves occur most often when price has moved really far, and the final wave doesn't have enough momentum to reach a new bottom (or high). They are rare, but they do occur. I don't typically use them as my primary option... most often they are realized when looking backwards and adjusting counts.
I bring this up to show that there are other bullish counts that are still valid and still options. While it is not the primary option for me right now, it is in my "bag of alternates" that I am keeping in mind as new evidence reveals itself.
In the next few days, I will see what new evidence reveals itself in the price action, and check to see if my analysis needs updating. For now, bottom line is that the potential 5 wave pattern up from new lows that would give us a clear indicator that a bullish trend change had occurred is broken. There is another pattern at play here... price will reveal what it is over time.
I bring this up to show that there are other bullish counts that are still valid and still options. While it is not the primary option for me right now, it is in my "bag of alternates" that I am keeping in mind as new evidence reveals itself.
In the next few days, I will see what new evidence reveals itself in the price action, and check to see if my analysis needs updating. For now, bottom line is that the potential 5 wave pattern up from new lows that would give us a clear indicator that a bullish trend change had occurred is broken. There is another pattern at play here... price will reveal what it is over time.
Most likely wave 1 end point is .2386, not .2503.
The short term bullish case is on the ropes. Earlier, price dropped below touched the .2386 level before the current relief rally that brought price up to near .25. So far, the relief rally has been fairly weak, and the selloff over the last few days very strong and broad based across almost all risk based assets (stocks - especially high beta tech, bonds, crypto, oil, commodities).
This brings the possibility of the bearish scenario I mentioned above in focus. If we don't see bulls start buying up price significantly (wave 5), the likelihood of a test or even break to new lows in the near future.
My long term view/count is still intact, so my bias will be long term bullish until it is invalidated. As I said in my last post, the next few months will be an exciting time... it sure has been so far!
Stay safe out there.