BTUSD - Parabolic Move - Is it a Bubble?

Bitcoin / Dollar (MTGOX:BTCUSD)  
DanVmod 7 months ago
Disclaimer - I am not trading this instrument yet. So at present my interest in this instrument is purely from charting perspective. Having said that I originally published my first chart in September you can view it is at https://www.tradingview.com/v/oZ0f25vg/

I expected the retracement which never materialised in the manner expected. Yet the 600+ for possible completion of 5 waves have more than met and in fact we are probably not half way in to this cycle.

Note my comments in the chart. Clearly we are in wave (3) on my chart and this have habit of extending several times particularly in very strong trend. Therefore, no Fib extension or trend channel or such would really work. So using the percentage change in price of wave (1) and projection by common Fib relation of wave (3) and some other similar calculation, I speculate that we might now surpasss 10,000 mark for wave (3) to complete by March 2014. One to watch for sure as there will be sharp sell off along the way that might give heart attack of if entered the trade at the wrong time or stop too close to the price action given the 400+ decline not unusual as we continue to clime higher.
27 3752
BTCUSD - Short term Bullish to 1100-1150 zone
Whilst the last 2 charts on BTCUSD published are highlighting intermediate term bearish with potential move down to retest the low at 450 and longer term will revert to new bullish move over longer term, I am seeing small scale "Flat Wave" in the short term under progression and feel that I should publish that chart. So in this you will see 3-3-5 wave from current congestion which may have been calling it descending triangle, perhaps incorrectly. If this unfolds as flat, then you will have the opportunity to see live how the price forms such 3-3-5 correction with high being formed around 1100-1150 zone. Don't be too rigid about the actual price zone noted, except by that time you need to be able to see clear 5 waves to the upside completing around there or on either side. The it will give you confidence of the larger "Flat Wave" described in my previous 2 charts also could unfold similarly. For greater explanation and understanding of this type of patter and EW analysis you can view 2 recordings on Youtube which you can find at the following links: https://www.youtube.com/watch?v=7XB2CDRQJxo https://www.youtube.com/watch?v=6Q4SZsJAWIs Hope you enjoy this and help you plan your trades ahead of time with specific observation to look out for final entry and exits. As always, please don't follow blindly and use good money management to ensure that should we be wrong the loss could be well defined before entry. For those of you who have asked me for link for making donation, you can do that at the link: 1Q1jYasGiJxvvYNX2KwwmX8KGoXRMu9rAW
Sat Jan 18 10:34:05 2014 UTC
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Insta_k1ller Nov. 20, 2013, 11:52 a.m.
Interesting :) Thanks for sharing!
Tamis Nov. 21, 2013, 11:51 a.m.
Very interesting ! Thanks a lot, will follow this to see how it goes for sure
Lebowski Dec. 3, 2013, 3:02 p.m.
Nice chart.
ostaphedge Dec. 5, 2013, 11:25 p.m.
that stuff don't work in BTC/ try to make EW analysis for this graph http://www.thebubblebubble.com/wp-content/uploads/2012/05/Tulipomania.gif
DanVmod Dec. 6, 2013, 12:59 a.m.
It seems like you are making an obvious and very profound statement. May be it doesn't work. What is your point though? Why don't you you go ahead and show what works? I don't say it is easy and don't think it is wrong to make an attempt and in fact will continue to do so till some bright spark will show me alternative that do work. Anyway, thanks for stopping by and taking a look at my chart.
DanVmod Dec. 8, 2013, 10:28 a.m.
Lot of you have been asking me to post an update on this instrument. Whilst we broadly remain in longer term uptrend, Many of you are aware of my short term view and analysis as I have been posting snapshots of the charts and have been commenting live. However, here is an updated chart to focus on current price action.

After posting a high around 1240 area, based on my chart we have completed ((iii)) on my chart and we are now making abc retracement to wave ((iv)). As normal guide lines for EW holds, that once we complete cycle of 5 waves in this case ((iii)) then retracement could go to wave iv of one cycle degree lower ie to (iv) which on my chart is around 60 zone. I risk being shot at or called some names for even suggesting this. However, adopting a much more cautious approach I have been suggesting retracement to 450 area. When the price was above 1100 it was dismissed my many as unlikely. But now it looks almost done deal.

In doing so, the price declined to wave (a) in 3 swings and bounced back to form double top also in 3 swings to complete (b) in flat correction where EW guidelines suggests that the wave (c) decline would be in 5 waves. This appears to be in progress and currently in wave iii marked on my chart which is still in progress with possible target around 500. Then I expect it to retrace to around 750 area or so for wave iv and decline to 400-450 in completing wave v.

If this is the completion of the correction then we should move up inn very strong impulsive move to the upside and retest or take out the 1240 high. However, if we don't see strong impulsive move the upside, then the 5 wave decline could become larger wave 1 and will only make partial retracement of the decline form high to form wave 2. In this scenario we could then decline in wave 3 and so on which could bring 60 level in to potential target zone in due course.

I am ignoring all new related impact or "fundamental" arguments for this analysis. It it purely based on EW technical analysis. You can by all means follow your own method of analysis and it might well serve you better than my thoughts. But it is here for alternative view however it turns out. Here is the chart.
Tagada Dec. 8, 2013, 10:55 a.m.
Good analysis in my humble opinion. Could you link to the actual chart instead of just its picture? I'd like to play around with your hypothesis, thanks!
Technicianmod Dec. 8, 2013, 10:58 a.m.
I appreciate the effort and time you dedicate to providing such analysis and follow-up
DanVmod Dec. 8, 2013, 10:52 a.m.
Just to clarify the current retracement in progress to the upside has 850 as possible resistance, then once it declines to 500 zone and bounce it might only make it to 750 for wave iv . Hope this helps.
flibbrpro Dec. 12, 2013, 12:55 p.m.
500 to 750 on wave iv up ? . . I was thinking 500 -> 1800.. we need up.. when is the next insane drive would you guess?
DanVmod Dec. 12, 2013, 1:33 p.m.
Price seems to have got stuck on BTUSD, but BTCNY seems to be suggesting more downside. Using that as proxy we could see low around 400 on BTUSD https://www.tradingview.com/x/5hCBqWvx/ & https://www.tradingview.com/x/I4NnCyAz/
DanVmod Dec. 12, 2013, 1:35 p.m.
Price seems to have got stuck on BTUSD, but BTCNY seems to be suggesting more downside. Using that as proxy we could see low around 400 on BTUSD
Domchi Dec. 16, 2013, 3 a.m.
Hi DanV... looking at your original chart, and the subsequent chars, why do you expect that the price will fall to 400-500 again and that your original prediction was incorrect?

What if we've finished (iv) with 50% correction on 2013-12-04 and are having end-of-year stabilization period before (v) as on your original chart? That is, what if your original prediction is correct, but wave (iv) happened a bit sooner and a bit faster than expected because of China announcements...
erelerel Dec. 16, 2013, 3:23 a.m.
great question...
DanVmod Dec. 16, 2013, 3:37 p.m.
If the wave (iv) is complete, then we should start up in strong new up trend again. No new stabilisation would be necessary as wave (v) would be expected to unfold. The fact that has not happened and which I referred to in my last updated chart, we are still in wave (iv) and normal target for wave 4 is wave 4 of 1 lower degree cycle. To be very optimistic that would be at least wave v around 400-500 zone. but 1 cycle degree lower wave 4 is all the way back around 120 zone and at this moment could not be ruled out no mater how impossible that seem right now. Only on confirmation of the low in place and could the wave (v) commence to the upside. But hey. if you have different expectation and you analysis suggest stabilisation is required then look out for it and adjust your conclusion accordingly.
Domchi Dec. 18, 2013, 10:45 a.m.
Thanks for clarification - nice to hear the reasoning behind it and the update. In the meantime events proved you right, we indeed hit 455 exactly as per your original chart (which is a great piece of TA).
Azzzz Dec. 19, 2013, 3:46 a.m.
With the random consolidation before it got to 455, it's struggling to make it's bullish push. Is it possible we haven't completed the wave and are on target below 455?
Domchi Dec. 19, 2013, 3:29 p.m.
What do you mean struggling to made its bullish push? The price has been up for more than 50% from the bottom in about a day, how is that struggling? :)
Azzzz Dec. 21, 2013, 4:38 a.m.
I've been pondering your question, what's your outlook on it now based on the recent weak push?
Domchi Dec. 22, 2013, 5:56 p.m.
Honestly, I don't know. I don't think there's enough bear for a bigger crash anymore, weak hands have been shaken, and fundamentals are really strong with a lot happening everywhere, even in China. Everybody seems to agree that the price is going up mid to long term, and in Bitcoin world even bears want it to crash just so they could buy more coins. I don't expect much happening over holidays, and the price might slowly decline over the next week or even two, but personally I'm not brave enough to go short. There has been and still is a lot of media coverage and I suspect a lot of potential buyers looking to enter, including Wall Street.

So, basically, based on fundamentals, I think we'll see a week or two of sideways or slow downwards trend before we go up, instead of another big drop according to DanV, but he is a charting god after all and I'm monitoring this chart very closely. And weekend is over just about now, so who knows, maybe Monday will bring some limited upward push.
DanVmod Dec. 12, 2013, 1:36 p.m.
somapro Dec. 18, 2013, 10:48 a.m.
Hello Dan, would you post the chart update from yesterday?
lexentius Dec. 19, 2013, 2:43 p.m.
I find that the more people are angry about wavecounts, the more likely they are to play out as predicted. Keep up the great analysis, let the haters be testament to your success!

Much respect to you.
lexentius Dec. 19, 2013, 3:11 p.m.
It looks like the bottom at $455 is in. Looks like wave (iv) is complete and this marks the start of wave (v). Other indicators, such as Fisher Transform, StochRSI, Ao, all support this scenario. If this is true we are to make an extremely bullish push to new ATH and perhaps 1700, correct?
DanVmod Dec. 19, 2013, 6:46 p.m.
Thanks for that, appreciate it. Yes, some do not agree with my chart but then it is puzzling as they don't offer an alternative. But in absence of other analysis, we only have our own, and I for one am happy with that and will be willing to accept when proven wrong regardless of others making different noises. Thanks again.
money_hof Dec. 19, 2013, 11:28 p.m.
Please update the current situation and your prediction to come, thanks.
DanVmod Dec. 22, 2013, 11:12 a.m.
Original labels on the shorter term chart has changed somewhat. So here is my current interpretation of continued decline and still in progress to complete wave (iv) of (c). That could complete larger Wave (iv) retracement from top around 1250 zone. If so then we might be able to see new bullish wave commence. No doubt this will change from the idealistic path outlined on chart, So one to watch.
Hypron Dec. 22, 2013, 6:14 p.m.
Thank you for the update!