Bitcoin USD Total Technical Analysis / FIB channel/ EW/ Time
Updated
Dear HodlCrypots,
Let me start off by saying that this won’t be an easy read and I truly hope it won’t be. Trading is something serious and needs a lot of time and effort before you can find your own unique way of trading and earning money. This is my way of thanking this community by not only taking my time to make and publish this idea but also by putting my own unique idea out there that truly might matter and possibly save you a lot of money. Now with all things, nothing is certain and always expect the worst. I might therefore be wrong, because in the end we are all crypto students in this relatively new and fast pased world.
Enough of this idealistic nonsense. Let’s return to the materialistic world. The one-million-dollar question remains: did we have a true bottom @3130 USD or not? The only thing we know for certain is that we dropped 84 percent just months ago from the all-time high (ATH). Observing the ‘bullish’ move we made from December 2018 until now (8th of May 2019) got me thinking. Did we truly start a new bull market? Or is this a corrective move? If it is a corrective move, then precisely which move are we correcting while we are going up? In this thought process I tried to look at the underlying core structures that is identical to bitcoin (and bitcoin only) and I tried as much as I possibly can to get rid of any bias that I had. I tried to find clear cut structures, both time and price based. While looking at it with objective thoughts I found interesting movements and conditions of bitcoin that I then used to create a long-term scenario to verify that the bottom is in or not, because basically that’s what we are all interested about right?
When I inserted this new found data or structures into the present-day situation I found so much confluence as well as in price as in time that I was utterly surprised. Simply put I didn’t expect this to be the outcome. Before I start, I must mention that this way of doing technical analysis is not the conservative way that market analysts do technical analysis. Usually they stick to horizontal trend line trading based on previous supports and resistances on the chart or they use unique indicators. But combining fib channels to force correct fib retracement levels on a logarithmic scale and doing technical analysis based on that, is just something unique in that perspective and I came across only a handful of traders and investors that approach this crypto market with this in my opinion very effective instrument. Combining fib channels on log scale with Elliot Wave (EW) counting and time analysis is in my opinion a holy trinity in crypto.
Behavioral analysis 1: Underlying corrective structures and EW labeling for the structure
First let’s start with the basics and getting the most important data out of the previous 2 bear markets. Two yellow lines and 1 red line. Bitcoin prints a horizontal yellow line, a red diagonal line leading into an incorrect bear market bottom and 1 yellow diagonal line which eventually lead to the true bottoms in 2011 and 2015. I presented both counts in this chart, either the wxyxz or simple abc (let's keep it simple with abc as it does not matter long-term), the most important part is the middle B part in both charts are both a 95%-99% gain move and they both cross the diagonal yellow line.
The conditions in this structure to define the B is as follows:
1. Define the incorrect bear market bottom diagonal red from the ATH, the A ends here
2. Define the most important horizontal support yellow and diagonal yellow, this will be the most basic path of the B and C
3. The proposed B should be around 95-99%
4. The proposed B should cross the yellow diagonal line
Using these conditions, we get the following correction in our current bear market:
Behavioral analysis 2: Fib channel structures logarithmic scale horizontal and diagonal
Now on to find the price bottoms. As you can see, if we put a horizontal fib channel from the ATH to our proposed a, the c ended both times exactly on the 1.618. The diagonal fib channel is also useful to help with the combination of price/time analysis when trying to find the true bottom since it both times at least went in the area between the diagonal -0,618 and -0,786, but I will get into this later in much more detailed manner. Regarding the B, it reversed either around the 0,382 (reversed 0,618) or 0,5. Also notice that in 2011 if the A is a 1 inside the horizontal fib channel, the C travels within the channel from the 0,618 to the 1,618 making it also identical to the A. This way the length of the A = length of the C in a logarithmic way. For 2013-2015 it’s also almost the same. A = 1 B = 0,5 C = 1,618 making the C also almost the length of the A in a logarithmic way (1,618-0,5 = 1,118).
The conditions in this structure to define the bottom is as follows:
1. Define the A and draw a horizontal fib channel from the ATH to the proposed A.
2. The B should end around 0,382 (reverse 0,618) or 0,5
3. The place where the B ends should be at a major horizontal resistance
4. The price level on which the C ends should be between the diagonal fib channel between -0,618 and -0,786.
5. Look for confluence with the proposed C target with major supports from the entire bull market move prior to the bear correction. For example, we ended 2013-2015 correction in price area between the previous orange (iii) ATH and (iv). The 2011 correction ended in a horizontal fib channel in an exact 0,382 retracement from low to 2011 ATH.
Using these conditions, we get the following correction in our current bear market:
Notice the 0,786 and 0,382 are both to be seen in the grander scheme of things. The 0,786 (reversed 0,236) is the fib horizontal channel from ATL to ATH of 20k. The 0,382 retracement (reversed 0,618) is the horizontal fib channel retracement of our last bull market cycle marking our 4 to the 5 of our grand (1). It is also the price level where the green 3 and 4 are to be found of the previous count of our (1) and it is almost identical to the style of correction of the first 12 in 2011.
Behavioral analysis 3: Time analysis
Now that we have found a price pattern, we can finally start searching for our important time levels. Once you have defined the A and the B the C is the easiest one to get in both bear markets. A trend-based fib time pull from the start of the A to the end of the A projected from our proposed B will need to lead to a MAX BEAR MARKET TIME correction of between 1.618 and 1.75. So, let’s see what happens if we put this assumption into test in 2011 and 2013-2015.
This is a near perfect fit (1,618 price wise and 1,618-1,75 time wise). The previous 2 bear markets did indeed end max of 1,75 (second white vertical line). Now notice that we are trying to find the end of the bear market based on what it did (also on what we know) during the bear market. If we try to implement this same process to define the end of our current bear market based on what it did during this bear market, we get the following projection.
Now we don’t just have a price level, we also got a date. Bitcoin has until the end of January 2021 (max bear market time) to correct itself and to find a true and lasting bottom.
But what about our current bullish situation? What about our B? When does this upward movement end? Well, if we assume the B corrects the A move, we should find a pattern of the B timewise from the A. If we implement this way of thinking we find the following results.
In 2011 the B corrected until the 1.272 (0,272 from the A). From there it went all the way to 2.99. 2.99-1.272=1.718 (notice that it is not 1.618, but a specific number between 1.618 and 1.75).
If we think the same way to find our B and C in 2013-2015. We find that the B corrected until the 1.414 (0,414 from the A). From there it went all the way to 3.132. 3.132-1.414=1.718 (notice again that it is 1.718!). One thing I can’t forget is that it went 0,272 in the first bear market, and it went 0,414 in the second. Now that we are in the third major bear market, I get to think that perhaps we will put the B somewhere between the 0,414 and the 0,5 from the A movement. If we think like this, we get the following reading in our present-day bear market.
The following dates for the end of our B can be 14th of May (1.414 from the A) or 15th of June (1.5 from the A). If it does end in 14th of May the end of our bear market is visible at 3.132 (1.718 from the presumed B that is put in 1.414=3.132). Of course, if the B moves and ends at the 1.5 and not at the 1.414 the maximum end date of the bear market shifts accordingly. Knowing that the 6k-6.3k (also coincides with 0,618 retracement or 0,382 reversed) level is very strong resistance there is a strong possibility that the B can end at the 1.414 level on 14th of May.
Behavioral analysis 4: Elliot wave on the proposed B
If we apply Elliot wave theory on the bitcoin chart, we see a clear view of a B wave that is about to end in a clear 3 wave pattern wherein the C of the proposed B is much longer and stronger than the A.
Being bitcoin though I see a test of the 0,5-fib level price wise at around 15th of May as no violation of this assumption since it’s a B and a B can technically end at around sub 20k.
The question is: is it likely that it will retrace to 20K? I think not, the area of price level action will probably be more like this area. We are most probably in the 5th wave of the C of the major B. There isn’t much more room left before we enter the third phase of the bear market.
Behavioral analysis 5: Elliot Wave major structure and cross-examining our findings
Now it’s time to try to answer the one-million-dollar question: did we have a true bottom @3130 USD? To examine it we need to know where the markets previously bottomed out in relation to the bull market that preceded it. If we look at the year 2011 and the years 2013-2015, we notice the following.
They both bottomed out at the 1,5 and 1,55 respectively in relation to their previous bull market. If we do the same thing in the present-day bear market based on the previous bull market, we see the following.
Notice that in December 2018 we were nowhere near the yellow vertical 1,5 and 1,55 level. But keep this yellow vertical time line in your mind because I will get back to this later. We are probably based on that idea not even correcting the previous bull market of January 2015 until December 2017. Then what are we correcting exactly? Most probably the entire bull market from price level 0 prior to the year 2010 to just under price level 20.000 USD ATH in December 2017. It also makes a lot of sense that the 2 major bear markets that we have seen could possibly be a 2 and a 4 correction in an impulsive 1 move up consisting of a 12345-wave count pattern. Let’s have a closer look at that count.
Now let’s put that theory to the test. If it’s correct, then the top of the entire move from the start of bitcoin until the December 2017 ATH must be the 1. The 2 usually retraces 0,618 but to speak of a correction the 2 or the retracement of the 1 must be a minimum of 1,236 / 1,382 or looking at the way Bitcoin behaves on the logarithmic chart the 1,414. If we enter this data in the chart, we get the following view.
Now notice how the 1.414 completely overlaps the date of January 2021. To some extend the same can be said about the 1.382. What else is important? That we are nowhere near the minimum of 1.236 with date of September 2019. Besides, there is one more overlapping left to mention and that is the length of the previous bull market projected from the ATH date of December 2018. Remember the vertical yellow line that I told you to keep in mind?
Notice how the vertical yellow line 1 to 1 projection or simply put the 2 of that yellow line also overlaps the dates previously mentioned. What is also important, is that if it does overlap the length of the previous bull market then by definition it can’t be a correction of that length since it goes beyond it, so you have to conclude that it’s a correction for a much bigger count, beyond the previous bull market that it is currently correcting.
Behavioral analysis 6: NVT signal considering these findings
There is one more thing I would like to add to further support the idea that we are probably only halfway through the bear market. The NVT signal. I think this is a very reliable instrument for bitcoin, yet people stubbornly disregard it while it has proven to be correct during times other instruments proved very misleading. Or people don’t disregard it, but they simply fail at considering the consequences it has on a presumed bottom @ 3130 USD. Currently it’s giving a clear warning that there is much more significant downside to be expected.
Considering the previously mentioned findings, the warning signals of the NVT make sense, especially if we are truly resetting the entire move of bitcoin. The NVT signal is then warning us about the possible B top of the ABC path of a major 2 reset, something it hasn’t printed before.
Conclusion:
To finally answer the one-million-dollar question: no, the bottom is not in. The bear market can’t be over, let alone be over we are probably on the brink of entering the worst C wave of the bear market. This means price watching sub 6.5k probably for years to come, by first putting the bottom in and then taking its time surpassing the 6k in the next bull market.
Furthermore, we are probably resetting the entire bullish phase of bitcoin since its existence. Not because I want it to, but because the structures are hinting towards it. This sounds scary but this will undoubtedly be the chance of a life time for individuals (like me) who do not belong to the fortunate group of early adopters who got in cheap. Now why would I call it a once in a life time opportunity? Because based on the fact that we are completely resetting the whole bullish move to 20k, this means that if we find our bottom, and I’m thinking it will be near or a little bit under the 1000 USD value at around January 2021 then we are about to see a bull market that enters count 3 of the Elliot wave which is often the longest but never the shortest of the impulsive moves. That will be a fantastic buy or long opportunity for all of us.
I hope this idea has been of any value to you. If it did, I am glad it did. If it didn’t, I hope you can contribute more to the community by publishing better ideas so I can read them.
Disclaimer: I am not a financial advisor. I am an individual who likes to do technical analysis and share his personal ideas with the community.
Let me start off by saying that this won’t be an easy read and I truly hope it won’t be. Trading is something serious and needs a lot of time and effort before you can find your own unique way of trading and earning money. This is my way of thanking this community by not only taking my time to make and publish this idea but also by putting my own unique idea out there that truly might matter and possibly save you a lot of money. Now with all things, nothing is certain and always expect the worst. I might therefore be wrong, because in the end we are all crypto students in this relatively new and fast pased world.
Enough of this idealistic nonsense. Let’s return to the materialistic world. The one-million-dollar question remains: did we have a true bottom @3130 USD or not? The only thing we know for certain is that we dropped 84 percent just months ago from the all-time high (ATH). Observing the ‘bullish’ move we made from December 2018 until now (8th of May 2019) got me thinking. Did we truly start a new bull market? Or is this a corrective move? If it is a corrective move, then precisely which move are we correcting while we are going up? In this thought process I tried to look at the underlying core structures that is identical to bitcoin (and bitcoin only) and I tried as much as I possibly can to get rid of any bias that I had. I tried to find clear cut structures, both time and price based. While looking at it with objective thoughts I found interesting movements and conditions of bitcoin that I then used to create a long-term scenario to verify that the bottom is in or not, because basically that’s what we are all interested about right?
When I inserted this new found data or structures into the present-day situation I found so much confluence as well as in price as in time that I was utterly surprised. Simply put I didn’t expect this to be the outcome. Before I start, I must mention that this way of doing technical analysis is not the conservative way that market analysts do technical analysis. Usually they stick to horizontal trend line trading based on previous supports and resistances on the chart or they use unique indicators. But combining fib channels to force correct fib retracement levels on a logarithmic scale and doing technical analysis based on that, is just something unique in that perspective and I came across only a handful of traders and investors that approach this crypto market with this in my opinion very effective instrument. Combining fib channels on log scale with Elliot Wave (EW) counting and time analysis is in my opinion a holy trinity in crypto.
Behavioral analysis 1: Underlying corrective structures and EW labeling for the structure
First let’s start with the basics and getting the most important data out of the previous 2 bear markets. Two yellow lines and 1 red line. Bitcoin prints a horizontal yellow line, a red diagonal line leading into an incorrect bear market bottom and 1 yellow diagonal line which eventually lead to the true bottoms in 2011 and 2015. I presented both counts in this chart, either the wxyxz or simple abc (let's keep it simple with abc as it does not matter long-term), the most important part is the middle B part in both charts are both a 95%-99% gain move and they both cross the diagonal yellow line.
The conditions in this structure to define the B is as follows:
1. Define the incorrect bear market bottom diagonal red from the ATH, the A ends here
2. Define the most important horizontal support yellow and diagonal yellow, this will be the most basic path of the B and C
3. The proposed B should be around 95-99%
4. The proposed B should cross the yellow diagonal line
Using these conditions, we get the following correction in our current bear market:
Behavioral analysis 2: Fib channel structures logarithmic scale horizontal and diagonal
Now on to find the price bottoms. As you can see, if we put a horizontal fib channel from the ATH to our proposed a, the c ended both times exactly on the 1.618. The diagonal fib channel is also useful to help with the combination of price/time analysis when trying to find the true bottom since it both times at least went in the area between the diagonal -0,618 and -0,786, but I will get into this later in much more detailed manner. Regarding the B, it reversed either around the 0,382 (reversed 0,618) or 0,5. Also notice that in 2011 if the A is a 1 inside the horizontal fib channel, the C travels within the channel from the 0,618 to the 1,618 making it also identical to the A. This way the length of the A = length of the C in a logarithmic way. For 2013-2015 it’s also almost the same. A = 1 B = 0,5 C = 1,618 making the C also almost the length of the A in a logarithmic way (1,618-0,5 = 1,118).
The conditions in this structure to define the bottom is as follows:
1. Define the A and draw a horizontal fib channel from the ATH to the proposed A.
2. The B should end around 0,382 (reverse 0,618) or 0,5
3. The place where the B ends should be at a major horizontal resistance
4. The price level on which the C ends should be between the diagonal fib channel between -0,618 and -0,786.
5. Look for confluence with the proposed C target with major supports from the entire bull market move prior to the bear correction. For example, we ended 2013-2015 correction in price area between the previous orange (iii) ATH and (iv). The 2011 correction ended in a horizontal fib channel in an exact 0,382 retracement from low to 2011 ATH.
Using these conditions, we get the following correction in our current bear market:
Notice the 0,786 and 0,382 are both to be seen in the grander scheme of things. The 0,786 (reversed 0,236) is the fib horizontal channel from ATL to ATH of 20k. The 0,382 retracement (reversed 0,618) is the horizontal fib channel retracement of our last bull market cycle marking our 4 to the 5 of our grand (1). It is also the price level where the green 3 and 4 are to be found of the previous count of our (1) and it is almost identical to the style of correction of the first 12 in 2011.
Behavioral analysis 3: Time analysis
Now that we have found a price pattern, we can finally start searching for our important time levels. Once you have defined the A and the B the C is the easiest one to get in both bear markets. A trend-based fib time pull from the start of the A to the end of the A projected from our proposed B will need to lead to a MAX BEAR MARKET TIME correction of between 1.618 and 1.75. So, let’s see what happens if we put this assumption into test in 2011 and 2013-2015.
This is a near perfect fit (1,618 price wise and 1,618-1,75 time wise). The previous 2 bear markets did indeed end max of 1,75 (second white vertical line). Now notice that we are trying to find the end of the bear market based on what it did (also on what we know) during the bear market. If we try to implement this same process to define the end of our current bear market based on what it did during this bear market, we get the following projection.
Now we don’t just have a price level, we also got a date. Bitcoin has until the end of January 2021 (max bear market time) to correct itself and to find a true and lasting bottom.
But what about our current bullish situation? What about our B? When does this upward movement end? Well, if we assume the B corrects the A move, we should find a pattern of the B timewise from the A. If we implement this way of thinking we find the following results.
In 2011 the B corrected until the 1.272 (0,272 from the A). From there it went all the way to 2.99. 2.99-1.272=1.718 (notice that it is not 1.618, but a specific number between 1.618 and 1.75).
If we think the same way to find our B and C in 2013-2015. We find that the B corrected until the 1.414 (0,414 from the A). From there it went all the way to 3.132. 3.132-1.414=1.718 (notice again that it is 1.718!). One thing I can’t forget is that it went 0,272 in the first bear market, and it went 0,414 in the second. Now that we are in the third major bear market, I get to think that perhaps we will put the B somewhere between the 0,414 and the 0,5 from the A movement. If we think like this, we get the following reading in our present-day bear market.
The following dates for the end of our B can be 14th of May (1.414 from the A) or 15th of June (1.5 from the A). If it does end in 14th of May the end of our bear market is visible at 3.132 (1.718 from the presumed B that is put in 1.414=3.132). Of course, if the B moves and ends at the 1.5 and not at the 1.414 the maximum end date of the bear market shifts accordingly. Knowing that the 6k-6.3k (also coincides with 0,618 retracement or 0,382 reversed) level is very strong resistance there is a strong possibility that the B can end at the 1.414 level on 14th of May.
Behavioral analysis 4: Elliot wave on the proposed B
If we apply Elliot wave theory on the bitcoin chart, we see a clear view of a B wave that is about to end in a clear 3 wave pattern wherein the C of the proposed B is much longer and stronger than the A.
Being bitcoin though I see a test of the 0,5-fib level price wise at around 15th of May as no violation of this assumption since it’s a B and a B can technically end at around sub 20k.
The question is: is it likely that it will retrace to 20K? I think not, the area of price level action will probably be more like this area. We are most probably in the 5th wave of the C of the major B. There isn’t much more room left before we enter the third phase of the bear market.
Behavioral analysis 5: Elliot Wave major structure and cross-examining our findings
Now it’s time to try to answer the one-million-dollar question: did we have a true bottom @3130 USD? To examine it we need to know where the markets previously bottomed out in relation to the bull market that preceded it. If we look at the year 2011 and the years 2013-2015, we notice the following.
They both bottomed out at the 1,5 and 1,55 respectively in relation to their previous bull market. If we do the same thing in the present-day bear market based on the previous bull market, we see the following.
Notice that in December 2018 we were nowhere near the yellow vertical 1,5 and 1,55 level. But keep this yellow vertical time line in your mind because I will get back to this later. We are probably based on that idea not even correcting the previous bull market of January 2015 until December 2017. Then what are we correcting exactly? Most probably the entire bull market from price level 0 prior to the year 2010 to just under price level 20.000 USD ATH in December 2017. It also makes a lot of sense that the 2 major bear markets that we have seen could possibly be a 2 and a 4 correction in an impulsive 1 move up consisting of a 12345-wave count pattern. Let’s have a closer look at that count.
Now let’s put that theory to the test. If it’s correct, then the top of the entire move from the start of bitcoin until the December 2017 ATH must be the 1. The 2 usually retraces 0,618 but to speak of a correction the 2 or the retracement of the 1 must be a minimum of 1,236 / 1,382 or looking at the way Bitcoin behaves on the logarithmic chart the 1,414. If we enter this data in the chart, we get the following view.
Now notice how the 1.414 completely overlaps the date of January 2021. To some extend the same can be said about the 1.382. What else is important? That we are nowhere near the minimum of 1.236 with date of September 2019. Besides, there is one more overlapping left to mention and that is the length of the previous bull market projected from the ATH date of December 2018. Remember the vertical yellow line that I told you to keep in mind?
Notice how the vertical yellow line 1 to 1 projection or simply put the 2 of that yellow line also overlaps the dates previously mentioned. What is also important, is that if it does overlap the length of the previous bull market then by definition it can’t be a correction of that length since it goes beyond it, so you have to conclude that it’s a correction for a much bigger count, beyond the previous bull market that it is currently correcting.
Behavioral analysis 6: NVT signal considering these findings
There is one more thing I would like to add to further support the idea that we are probably only halfway through the bear market. The NVT signal. I think this is a very reliable instrument for bitcoin, yet people stubbornly disregard it while it has proven to be correct during times other instruments proved very misleading. Or people don’t disregard it, but they simply fail at considering the consequences it has on a presumed bottom @ 3130 USD. Currently it’s giving a clear warning that there is much more significant downside to be expected.
Considering the previously mentioned findings, the warning signals of the NVT make sense, especially if we are truly resetting the entire move of bitcoin. The NVT signal is then warning us about the possible B top of the ABC path of a major 2 reset, something it hasn’t printed before.
Conclusion:
To finally answer the one-million-dollar question: no, the bottom is not in. The bear market can’t be over, let alone be over we are probably on the brink of entering the worst C wave of the bear market. This means price watching sub 6.5k probably for years to come, by first putting the bottom in and then taking its time surpassing the 6k in the next bull market.
Furthermore, we are probably resetting the entire bullish phase of bitcoin since its existence. Not because I want it to, but because the structures are hinting towards it. This sounds scary but this will undoubtedly be the chance of a life time for individuals (like me) who do not belong to the fortunate group of early adopters who got in cheap. Now why would I call it a once in a life time opportunity? Because based on the fact that we are completely resetting the whole bullish move to 20k, this means that if we find our bottom, and I’m thinking it will be near or a little bit under the 1000 USD value at around January 2021 then we are about to see a bull market that enters count 3 of the Elliot wave which is often the longest but never the shortest of the impulsive moves. That will be a fantastic buy or long opportunity for all of us.
I hope this idea has been of any value to you. If it did, I am glad it did. If it didn’t, I hope you can contribute more to the community by publishing better ideas so I can read them.
Disclaimer: I am not a financial advisor. I am an individual who likes to do technical analysis and share his personal ideas with the community.
Trade active
The anticipation of a price date high for the possible B of 14th of May is currently holding true. The 0,618 fib price level (or reversed 0,382) has been breached before 14th of May and now as an almost perfect B is set on 14th of May on the 0,5 fib price level. As mentioned in the analysis this was a possibility. At the moment of writing the price is holding 8060 USD per bitcoin. The NVT is currently on steroids and even higher than end of 2017 when we set our last ATH. Either this is a gigantic bulltrap or the NVT signal is no longer valid. The RSI is showing exhaustion. If this theory holds true we will not breach the price level of 14th of May and we have already started with our journey to find the true bottom. If we break here things could get ugly very fast. You are warned. As allways trade based on your own strategy and ideas. Allways assume that you are wrong all the time, that is true for all of us, including me.
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