OH NO, IS THE BITCOIN SKY FALLING AGAIN??????!!! IN A WORD – NO!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

Time will tell whether or not I’ve been the lone technical analyst to have called the BItcoin bottom immediately when it occurred, or am I just a foolish, overly bullish Elliott Wave technician who blindly missed other technical details that were screaming SHORT BITCOIN to 19K!!!!!

Let’s take a look at a weekly BTC chart to get a big picture view of what has happened. It begins with the ending diagonal that concluded intermediate wave (3) of primary wave [3]. I identified this diagonal early on and noted that we should expect a deep pullback whether this diagonal was a leading diagonal, ie. minute wave [i] of minor wave 5 of intermediate wave (3) (which technically it could still be since it found support above just above the minor wave 4 low). And, once that diagonal was broken to the downside, then the text book support became the wave four of lesser degree low and the lower channel trendline (also know as the wave 2/4 trendline). Once this pullback found support there and printed a huge reversal candle (see four hour chart down at the bottom) precisely at the lower trend line and quite near the wave four of lesser degree low, then technically, from an Elliott Wave perspective, the pullback low was in – provided of course my count is correct. Counting Elliott Waves is a combination of both art and science. Unlike many EW technicians, I combine other technical indicators that I don’t show on the charts to help me discern wave counts on both the short term and longer term charts. One last thing before I move to the shorter time frame 4 hour chart: Look at the move down from the intermediate wave (3) high to the intermediate wave (4) low – it is a very easily identifiable 3 waves. This is critical as corrective fourth waves are either 3 waves or triangles.

LET’s presume I’m wrong. Should BTC make a lower low than what I have labeled (4), then the move down becomes 5 waves, or an impulse. Should this happen, then I of course am wrong in my bottom count. But what should we expect if that happens? Well, the move down would only be the first leg down. After a slightly lower low, we should see a B wave bounce that would be the time for trapped longs to exit before the C leg down makes even a lower low to end the correction.

Now let’s move to the 4 hour BTC chart and take a look at recent price action. What should we expect from a bullish perspective after a deep pullback that cut the BTC price in half? A period of price basing. Time for the weak hands to get out, while the large players quietly, calmly, patiently accumulate. This takes time. In Elliott Wave terms, this is what is called a complex corrective. We see a correction labeled abw,x,aby from the minute wave [1] high to form minute wave [ii] (Note: per EW rules a third corrective abz is allowed to make a lower low still, but it must of course remain above the intermediate wave (4) low). Since the wave (4) low, BTC has traced out 2 bullish Gartley patterns. The smaller blue Gartley marked the bottom to minute wave [ii] of minor wave 1 of intermediate wave (5) of primary wave [3]. This higher low than the intermediate wave (4) low should hold (unless the complex corrective puts in another leg as described above). After the minute wave [ii] low, BTC impulsed up in 5 clear waves in minuette wave (i) of minute wave [i] of minor wave 1 of intermediate wave (5) of primary wave [3]. Then is has pulled back in minuette wave (ii). This pullback should find support at or above the lower channel line, which is above the minute wave [ii] low.

And finally, if I am correct, then we should see something like what I’m showing on the daily chart below. A slow steady grind to the minor wave 1 high around mid-October that seeks the previous all-time high. The accumulation phase is continuing. BUT, the slope will begin to turn positive in the near term. The markets are an ever changing, dynamic puzzle. Based upon the current evidence, this is my analysis, time will tell whether it’s a boom or a bust. But, I’m calling it in real time!

About alphahorn

I received an MBA from Columbia University’s Graduate School of Business in New York and am a Wall Street veteran. I’ve worked for a number of investment banks including Smith Barney and First Boston/C S First Boston in New York. Over the years, I have developed my own Proprietary Swing System and I combine that System with my own Elliott Wave Analysis to trade.
This entry was posted in Uncategorized and tagged , , , , , , , , , , , . Bookmark the permalink.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s