Short

Elliott Wave Analysis of the Bitcoin Market Cycle (2017 - 2018)

Updated

I'm using Elliott Waves Principle with Fibonacci levels to analyse the whole "MARKET CYCLE" of Bitcoin which started in June - July 2017.

Before I tell you how I analysed the market you may be wondering why I have "MARKET CYCLE" in bold letters. This is because one of the common mistake of the traders is not analysing the Market from where it started!. I would like to
learn from other peoples mistakes so i decided to get trained and learn more about Elliott Waves Principle which started in 1930's and became popular in 1970's with the legendary book on the Elliott Wave entitled Elliott Wave Principle: Key to Stock Market Profits...

According to that these are the type of waves we have in a market:

Intermediate Wave (Weeks to Months) - (1) (2) (3) (4) (5) (A) (B) (C)
Minor Wave (Weeks) - 1 2 3 4 5 A B C
Minute (Days) - ((i)) ((ii)) ((iii)) ((iv)) ((v)) ((a)) ((b)) ((c))
Minuette (Hours) - (i) (ii) (iii) (iv) (v) (a) (b) (c)
Subminuette (Minutes) - i ii iii iv v a b c

And these are the Fibonacci levels that i'm using to do the wave counts:

wave 2 = 0.618 - 0.8 of wave 1
wave 3 = 1.618 of wave 1
wave 4 = 0.5 - 0.618 of wave 3
wave 5 = 0.618 - 1 of wave 1
wave B = 0.5 - 0.8 of wave A
wave C = 0.618 - 1.236 of wave A

Here is the big picture showing the Bitcoin Market Cycle in 1 Day Chart:

We have ABCDE Descending Traingle Correction wave and we are in the Intermediate Corrective Wave (D) going to (E). See here in 4hr timeframe:

In that Intermediate Corrective Wave going from (D) to (E) We are in the Minor Wave A. See here in 2hr timeframe:

In that Minor Wave A we are in the Minute Wave ((ii)) going to ((iii)). See here in 1hr timeframe:

In that Minute Wave ((ii)) we are in the Minuette Wave (ii) going to (iii). See here in 30min timeframe:

In that Minuette Wave (ii) going to (iii) we are in the Subminuette Wave iv going to v. See here in 15min timeframe:

Please note that if we got any unexpected volume because of the recent extreme manipulation we might have elliott wave overlapping.

I.E: if any of the Wave 2 overlap Wave 1.

If this happens then we have to recount the Waves.

RISK DISCLOSURE:

Please note that this is purely Educational purposes only and not as Individual Investment Advice. If you choose to follow the above techniques you do so at your own risk after giving thorough and reasonable thought and consideration to your actions and their potential consequences

Note

Looks like we just completed the Minuette Wave (iii). if it doesn't continue going down a little bit on Wave (iii) then its going up to Minuette Wave (iv) which is Fib 0.5 - 0.618 of Wave (iii)

Note

Minuette Wave (iii) still not completed. Going towards 0.5 - 0.618 area of Minuette Wave (ii). You can expect wave (iii) complete 9125 - 9200 if this respects the fib levels. If not then we have to recount the waves to find out if the Subminuette wave iii or v is extended. There are occasions where both wave iii and wave v extended.

See more information about Elliott Waves:

RULES

1. Impulse waves 1, 3, and 5 always subdivide into five waves.
2. Wave 1 must be an impulse or a leading diagonal pattern.
3. Wave 2 never goes beyond the start of wave 1.
4. Wave 3 is never the shortest impulse wave.
5. Wave 3 must be an impulse.
6. Wave 4 never moves beyond the end of wave 1.
7. Wave 5 must be an impulse or an ending diagonal pattern.
8. Waves 1,3 and 5 can never all be extended
9. An ending diagonal occurs in wave 5 of an impulse or wave C of an A-B-C correction.
10. Wave 2 never goes beyond the origin of wave 1.
11. Wave 3 always goes beyond the end of wave 1.
12. Waves 4 and 1 overlap.
13. Wave 5 always ends beyond the end of wave 3 in a leading diagonal.

GUIDELINES

1. Sometimes wave 5 does not move beyond the end of wave 3 – called truncation.
2. Wave 5 often ends or slightly exceeds a trend line drawn off wave 3 parallel to a trend line drawn connecting the ends of waves 2 and 4.
3. Wave 1,3 or 5 is usually extended where the corrective waves are small compared to the impulse waves.
4. Wave 3 is usually the steepest and longest wave.
5. Usually either wave 3 or 5 is extended.
6. Fibonacci percentages are used to calculate retracements for waves 2 and 4.
7. Fibonacci ratios are used to target the end of waves 3 and 5.

Note

Looks like Subminuette Wave v is extended

Note

Target Reached (1.618 of wave 1 to iii) and it looks like its time for correction...

Note

Looks like we had over 360M of volume for last 6hrs which took Bitcoin from 9200 to 9700 (500$). We had the similar volume on April 12 where 500M volume took Bitcoin by 1000$+

This is good example of unexpected high volume / manipulation / pump and dump etc. If this happens you need to check Elliot Waves again in 1 Day Chart and so on and recount the waves.

Now i have done that and here are the new possibilities:

Double top like we did in February 2018 (see the similarities in red highlighted boxes and the similar Elliot waves structure) and then down to the Yearly uptrendline and then go upto 11700

Keep Continue to go up to 11700

Note

We are in a NO TRADE ZONE here as we still below 200ma and we got a DOJI candle in daily chart (less bullish)

Here's the updated daily chart:

Please note that ABCDE correction pattern only can invalidated when you can't redraw Elliott Waves in daily chart for this pattern. Then it's most likely doing a different pattern all together. (i.e: ABC Zigzag or Started a new market cycle)

Note

See the Updated chart with 3 Confirmations:

Elliot Waves:

At the moment we are going from (C) to (D)
Within that we got ABC wave
Wave A and C are impulsive waves
Wave C usually 1.272 of A
So Wave C / Wave (D) ~ 10325$

Support & Resistance:

Resistance Range between ~10.5 - 11k

Moving Averages:

200ma is around ~10k at the moment

So according to all this Wave C or Wave (D) could be somewhere between ~10k - 11k

Above 11k ABCDE could be invalidated.

Hope this make sense

Note

i have redrawn the waves as we had extended subwave (iii) and subwave (v) of wave ((i)) and it seems like i drawn the waves wrong before thinking that they were not extended waves.

Orange Waves (A), (B), (C), (D), (E): Intermediate Waves (Weeks to Months)
Blue Waves A, B, C: Minor Waves (Weeks)
Red Waves ((i)), ((ii)), ((iii)), ((iv)), ((v)): Minute Waves (Days)
Black Waves (i), (ii), (iii), (iv), (v), (a), (b), (c): Minuette Waves (Hours)

Where i,ii,iii,iv,v are Impulsive or Long Waves and A,B,C,D,E,a,b,c are Corrective or Shorter Waves

Here's the bigger picute of the waves

Wave counting gets hard when it's extended specially when both 3 & 5 is extended. You will only see it if you check in long term (Daily / Weekly Chart). Usually all 3 Waves (1,3 & 5) can't be extended at the same time.

So at the moment it looks like we are in wave ((ii)) correction wave.
Impulsive waves (1,3,5) got 5 subwaves inside and correction waves (2,4) got 3 waves (a,b,c).

We have done 1st wave (a) of that correction wave going up and now we doing upto 0.386 - 0.5 correction down which is wave (b) which is around 9171$ - 9217$. Also please note that this is the maximum it can go but give 50$ +/- range for that.

After that correction then comes the impulsive wave (c) which is the last wave of the correction which is around 1.272 of the wave (a). Means we will go upto around 9550 - 9650 max which is just above 0.618 of wave ((i)).

So You may be able to earn some profit if you take a chance to ride the impulsive wave going from

wave (b): 9171 - 9217 to
wave (c): 9550 - 9650

So after that we start the wave ((iii)) going down again. Hope this helps

Note

Most likely we are in Wave (ii) of ((iii)). Wave (ii) is usually 50 - 80% of Wave (i) so you can expect the price to retrace 9100 - 9300 (max). Doesn't mean that it always have to retrace to that level. Sometimes when there is low volume it might just do 38.6% (9070) or even 23.6% (9000).

See the big picture here:

And the zoomed chart here:

Comments and Ideas most welcome

Note

Bitcoin New Market Cycle 2018 (Going to Moon or Underground?)

Note

Still the price didnt manage to break wave (b) means that wave (c) still in play.
I have done the / wave (c) / wave v projection all seems to be completing ~8.8+

Note

Updated Wave (ii), (iii), (v) Projections according to EW Fibo levels.

According to this Wave (v) / Wave ((v)) / Wave A will be completed in 2-3 days as we are still in Wave (i). Also please note that Wave iv is usually 0.5 - 0.618 but we had only 0.236 in Wave ((iii))

surangadesilva

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