On Bitstamp we have some very interesting numbers ... ATH of exactly $19666 with a dip yesterday at exactly $9222. Doing the maths, we had two major dips of 43% and 45% respectively, with an overall fall of 53% from the 17th of December to the 17th of January. Too "perfect" for my taste so I am wondering is it over or not just yet?
Commentaire
⋅
On the more fundamental side, let`s see the events that lead to this "correction" as well as some predictions about the future: - all started on the 17th of December, with the launch of the second futures contracts product by CBOE. The settlement price of those contracts is based on the "auction" price at a certain date on the Gemini Exchange (not the live market price, not the average price, not the biggest exchange, etc.) - interesting - then came Ripple, with a frenzy that fueled further some cashing out from BTC and pumping XRP - then came the ongoing alternation of good news / bad news from South Korea, where the public ministries were racing into a FUD / hype news spree, just to turn out today that officials were involved in insider trading - what a "surprise" - finally, China decides to cut down even further the mining operations and exchanges activities.
All those make me think we might have just seen a "cash out" from the major miners in China who decided it is time to close down business and move on. If we will see a lot of ASIC miners on sale on Alibaba and Ebay ... we have our confirmation. The good news is, IMHO, that all those events will push for a much quicker adoption of official regulations across the globe in regards to crypto-market and then finally we will see the "big boys" moving in. Funds, investors, enterprise level players. Thank you for looking, following, liking and commenting !
Commentaire
⋅
The chart above comes from a previous idea of mine, published on the 6th of January about a possible bat pattern forming. Confirmed
Commentaire
⋅
Dead cat bounce or market bottom / reversal - that is the question. To me, this was just the cat, waiting for the EMAs to catch up and we can`t talk about reversal until the major Fib level 0.786 is tested at least once (all the other cryptos did so BTC should not be different).
Commentaire
⋅
Just beautiful ... perfect for education purposes (I also posted an educational idea about it)
Commentaire
⋅
I was playing a little with the Elliott Waves this morning and look what I came up with: the perfect, by the book, 8 waves cycle: 12345 followed by ABC (which is composed of smaller 5 waves impulses). I used the 4 h chart since it is more clear and the waves can be seen exactly. Also, they followed the Fib levels almost to the dollar, with very few "spikes" up or down. This makes me firmly believe we are now at the end of the correction, but we still need to complete the C wave (as well the smaller impulse down 5th wave). Since we are looking at the Fib levels, this will be around $8000 levels, since I believe it will overshoot a bit the "exact" $8750 0.786 Fib. level
Commentaire
⋅
So far it seems we do have the above waves setup ... now the price is forming the usual BTC-style H&S around the 0.618 Fib level of $11084. This means it will take a little longer until we reach down to the bottom - maybe around the 24th - 25th of January.
Commentaire
⋅
All right ... for the past day or so I was thinking what next, meaning what will happen after this 5th wave of the C corrective wave completes. Well, it seems it all comes down to the price level this wave ends. The price can resume an uptrend, the price can "stall" for a while or the price can continue to move down. I am talking about the daily and weekly charts. The critical levels to watch are, for Bistamp at least, $7888 and $5555 (yes, I know right? - what are the odds to have such exact levels - but those are the next previous high and low respectively). If the price bounces back up from $7888 and passes $17235 then we can safely say the uptrend has returned. However, if the price goes under it will threaten the $5555 level which if it fails, will mean a trend reversal. Another "clue" about what might happen is the length of this final wave C. If we are looking at a correction, ideally it will end around the Fib level 0.786 of $8575 which would be perfectly in line with one of my previous idea about a 222 Gartley. This would mean that wave C is almost equal to the wave A. Honestly, base on those new calculations and adjustment to the dollar of the Fib level combined with the indicators for the daily and weekly time-frame, I tend to say $8600 will be the end of the line of this correction. It would also meet the 30 EMA of the weekly chart at that level, so it should be a very strong support.
Commentaire
⋅
It seems things are getting more complex around the 0.618 Fib level of $11000. It looks like the price is forming a bearish bat on the hourly chart within a bigger bearish bat on the 4h chart.... very interesting to watch:
Commentaire
⋅
Watch out for this event, coming out at 11am EST: "Weiss Announces First Bitcoin and Cryptocurrency Grades by U.S. Rating Agency" weissratings.com/
Commentaire
⋅
For the past day or so BTC was consolidating, getting ready for the next move. If history repeats itself and we have the fractal theory true, we have two formations that are almost identical on the chart. This means a quick dip to the 0.786 Fib level of $8600 followed by a rally up to just above the 0.5 Fib level of $13000. Let`s see:
Commentaire
⋅
The above move as suggested would also complete all the other formations mentioned before: the 222 Gartley with an end at $8600, the C wave of the correction if we are in a ABC one and the two bearish bats posted just above. All aligns nicely. For accuracy purposes, I`ve plotted exactly the Fib levels based on the exact numbers for Bistamp and they are: 0.786 - $8575 0.618 - $10945 0.5 - $12610 0.382 - $14275
Commentaire
⋅
One other interesting observation on the 4h chart ... a few days ago I was playing with different indicators and moving averages to see which ones are working the best for now. I added the ADX since I was looking for any indication about trend / no tred presence and I also added the 50 SMA to the chart, since I feel is the most accurate in combination with the 30 EMA. So, here is what I noticed, at least in this down trend ... a lot of bull traps, either on the EMA or on the SMA. This one now, doesn`t seem to be any different, so beware ...
Commentaire
⋅
As expected, it was a bull trap indeed:
Commentaire
⋅
The final "obstacle" to the price going down is under siege now: the 0.618 Fib level of $10.945. Based on how the charts look like, especially the 4h one, I expect a breakout within the next 4 to 8 hours max - the price failed to go above the EMA and SMA and now is being push down by both of them. Not only for BTC, but for every other major coin. So, if you want and can ... get ready for some action really soon !
Commentaire
⋅
Just for clarification, my reading is that the price will go down to $8600, to complete all the formations mentioned before.
Commentaire
⋅
For the beauty of it and to explain why I think the down movement coming soon will stop at $8600-ish, here is the weekly chart. You can see the 30 EMA and the 0.786 Fib level are meeting at that point, also is just a little lower than the lower limit of the first "buy" zone / demand. So, I don`t think there is enough selling power now to punch too hard through all those major supports. Maybe next time ... in a month or so :)
Commentaire
⋅
Right on time ... as called earlier, 8 hours after the update we had action: it started with yet another bull trap just above $11500 and then the price went down to form a nice bottom edge of a triangle. In order to get down to the expected target of $8600-ish, it will have to pass two major obstacles, $9927 and $9222.
Trade fermée manuellement
⋅
I am closing this trade now since we reached a perfect stale mate after some nice action down and then up again all day today. I will open another idea and we`ll take it from there. Thank you for looking. This is the stale mate I am talking about but will elaborate on a separate idea
I agree with the below comment thank you for these updates. Your Ebay/Alibaba comment is very interesting - you can't believe the hate mail we're getting on here which is great to be honest because it tells me we're correct and this isn't over yet. EVERYONE is long crypto other than the real professionals such as Andrew Left Google "Valleant Short Stock Andrew Left" that recently said " I can't find enough ways to short this stuff" and when Mr Left is short something trust me you dont want to long that name under any circumstances. When we post these short ideas re LTC to $97 XRP to .30c etc etc what these "traders" don't realize is that these are long term calls and being early is part of the call sometimes. These "traders" will go broke one by one because they only look at the upside when they should be looking at the downside. Now early investors from 5 years ago is a different story these are really the professionals and not "traders". So IMHO this is not over and will see a complete wash out and some great entry points. We'll see and thanks again for this GREAT work.
Haceru
⋅
@london55555, thanks again for your insightful comments and for bringing the "pros" into the discussion. The weekly chart does show a bull flag and we are only in the middle of it, so yes, we might have a long way to go down. But ... it takes time to develop (weekly is a long time) and patience is not something everybody has, especially when second mortgages or life savings are involved :)
NewYork888
⋅
@Haceru, "Second Mortgages or life saving involved" You hit it right on the head. This is exactly why this coming washout will be so spectacular and it will be the day traders that get wiped out as sure as im typing this. That said it will also provide some GREAT entry points in the solid crypto names re: LTC BCH etc
Haceru
⋅
@london55555, I am afraid so ... unfortunately it won`t be the professional traders that get wiped out but the "average Joe" that is not "playing" Forex cause is "dangerous" but jumped right on the 10x faster roller coaster this new market is. Oh well ... nothing new here, just different form
SuperMario4
⋅
Yes thank you for your analysis, splendid and thoughtful as always :)
Haceru
⋅
@SuperMario4, my pleasure ... and thank you for your comment :)
SuperMario4
⋅
@Haceru, My pleasure! just so I understand, you expect the 'breakout' to be of a downward movement correct? or it could go either way?
Haceru
⋅
@SuperMario4, like any "breakout" it could go any of the three ways actually: up, down or sideways. However, me personally, in this particular case I expect them all to go down, to complete the medium term formations mentioned before. The ADX is showing signs of exhaustion of the trends on all time frames, meaning we are close ... just not there yet, thus we might have one more leg down until we revers to the upside. Also, the EMA and SMA are both pointing or going altogether down and the market depth also doesn`t look like much to support a bull run now.