Charting Herd Mentality and Investor Psychology.
Updated
I originally posted this EW count and subsequent psychological chart on 12/6 and I've been posting them with little to no updates other than the sub wave counts. Enough people have asked for it that I thought I'd publish again. First, it's important to note that I'm analyzing from a completely neutral standpoint. I don't care if BTC goes to 1mm or $1. I'm simply observing/ charting psychological behavior.
The main take away from this chart is the irrationally euphoric parabolic rise and subsequent "fall from grace". This momo pattern can be seen in so many 2000 tech stocks and more recently AAPL or TSLA. Once momentum is broken, the initial retreat is fast and hard followed by the "it's too cheap" bounce (momo is trying to regain) unfortunately the psychological trend has long since been broken and what is left are the corrective waves down. (the underlying security is left to it's own merits and not driven by easy money).
I'm amazed at how closely the market followed the freehand wave count (orange wave down) I drew on 12/6. It'll be interesting to watch over the coming months.
Again, I have no vested interested in the success or failure of BTC but I believe it will not have a future until it's regulated and the wild fluctuations are neutralized. Businesses will not adopt a currency that could potentially squeeze margins or cause losses from recently sold product. Once regulations and taxation come into play, BTC will either "die on the vine" or "shoot the moon". (see the end of wave 5 down :)
The main take away from this chart is the irrationally euphoric parabolic rise and subsequent "fall from grace". This momo pattern can be seen in so many 2000 tech stocks and more recently AAPL or TSLA. Once momentum is broken, the initial retreat is fast and hard followed by the "it's too cheap" bounce (momo is trying to regain) unfortunately the psychological trend has long since been broken and what is left are the corrective waves down. (the underlying security is left to it's own merits and not driven by easy money).
I'm amazed at how closely the market followed the freehand wave count (orange wave down) I drew on 12/6. It'll be interesting to watch over the coming months.
Again, I have no vested interested in the success or failure of BTC but I believe it will not have a future until it's regulated and the wild fluctuations are neutralized. Businesses will not adopt a currency that could potentially squeeze margins or cause losses from recently sold product. Once regulations and taxation come into play, BTC will either "die on the vine" or "shoot the moon". (see the end of wave 5 down :)
Note
UPDATE: 6/1/2017DESPITE countless comments and msgs saying I don't know what I'm talking about, it's different this time, but you don't understand China....blah blah blah.
the theory of investor psychology is confirmed yet again.
What to look for now? Fractals...
Markets are ALWAYS cyclical! Patterns ( investor psychology/ emotional response) always repeat. Notice how the run up to the recent high mimics the run up to the original $1500 high a few years ago. It's the SAME emotions...
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.