Full cycle wave analysis of bitcoin from the beginning UPDATED
I last updated this in 2017. When counting waves I follow the rules of "The Elliot Wave Principle" by Frost and Precher. It's a very, very good book.
I start from the biggest time frame. If a wave isn't obvious, I reduce the time frame and count smaller waves to see it.
It's worth noting that wave analysis is most useful for longest time frames and whole markets, not single coins. charting the market cap for example. Decent market cap charts didn't really exist when I started this.. but BTC is so big that it represents crypto, so I think this is OK.
Now let's discuss.
(1) Where we are
The important part, right?
This correction is quite hard to predict with confidence because it lies on a 3rd wave of higher order.
Corrections of 3rd waves are often small and the C can finish above the A.
This is especially common when the B rises above the 5.
Just like this:
fig 1. randomly picked decent looking impulse wave from hourly BTC chart with bullish correction
Inedeed if we apply this to our current 3, the correction could already be over.
However, if we look at the full cycle (fig 3) in a monthly time frame, there is no doubt that the largest order wave is a 1, and we are in the 5 of that 1.
It is common for wave 1 to be "squished" at the height. That is, a large wave 1 and small wave 5 (talking height or price size not time).
We also expect large corrections in wave 1 as the trend establishes itself. Providing it doesn't drop below the starting point, it's a valid impulse wave.
Just like this:
fig 2. Look familiar? a common first wave shape when a trend has yet to be established
Compare this to the full cycle in the monthly time frame:
fig 3. Cycle order wave counting
From this we start to get ideas about what (2) might indeed look like. By looking a the heights H1, H2 we can probably infer H3 reasonably well. We can guess a time for events by looking at the steepness of previous rises.
I have not worked out these values yet, but I could and probably will. Lower order (shorter TF) wave counting of our current position at (1) should also give us a decent idea of the next low applying the same kind of basic techniques.
What if we do have a quick, small, 3-like correction at (1) like in fig. 1, and apply a basic rise to (2)?.. we could be looking 450k+ at (2). The size of this current dip has a lot riding on it.
(3) The BTC wave.
Typically elliot waves in traditional markets have 3 as the steepest wave. It is common in BTC for elliot waves to have steep 1's and 5's, but quite long, extended 3's. This pattern began here. Fascinating, yes? fnar, fnar.
(4) The correction of W2 gives another interesting shape. A recurring theme, as at the end of W1.
The interesting bit is how the last drop in W1 provides the C but in W2 it finishes higher and therefore we are actually ending the 1-2 of W5. Great example of how waves and markets can really trip you up if you were waiting for this to drop low like W1.
Maybe we are doing something similar right now? It's rocket time?
Donations:
If this makes you money why not help me stay out of employment?
Want some important numbers? give me a DM.
paypal.me/timoverboard
I start from the biggest time frame. If a wave isn't obvious, I reduce the time frame and count smaller waves to see it.
It's worth noting that wave analysis is most useful for longest time frames and whole markets, not single coins. charting the market cap for example. Decent market cap charts didn't really exist when I started this.. but BTC is so big that it represents crypto, so I think this is OK.
Now let's discuss.
(1) Where we are
The important part, right?
This correction is quite hard to predict with confidence because it lies on a 3rd wave of higher order.
Corrections of 3rd waves are often small and the C can finish above the A.
This is especially common when the B rises above the 5.
Just like this:
fig 1. randomly picked decent looking impulse wave from hourly BTC chart with bullish correction
Inedeed if we apply this to our current 3, the correction could already be over.
However, if we look at the full cycle (fig 3) in a monthly time frame, there is no doubt that the largest order wave is a 1, and we are in the 5 of that 1.
It is common for wave 1 to be "squished" at the height. That is, a large wave 1 and small wave 5 (talking height or price size not time).
We also expect large corrections in wave 1 as the trend establishes itself. Providing it doesn't drop below the starting point, it's a valid impulse wave.
Just like this:
fig 2. Look familiar? a common first wave shape when a trend has yet to be established
Compare this to the full cycle in the monthly time frame:
fig 3. Cycle order wave counting
From this we start to get ideas about what (2) might indeed look like. By looking a the heights H1, H2 we can probably infer H3 reasonably well. We can guess a time for events by looking at the steepness of previous rises.
I have not worked out these values yet, but I could and probably will. Lower order (shorter TF) wave counting of our current position at (1) should also give us a decent idea of the next low applying the same kind of basic techniques.
What if we do have a quick, small, 3-like correction at (1) like in fig. 1, and apply a basic rise to (2)?.. we could be looking 450k+ at (2). The size of this current dip has a lot riding on it.
(3) The BTC wave.
Typically elliot waves in traditional markets have 3 as the steepest wave. It is common in BTC for elliot waves to have steep 1's and 5's, but quite long, extended 3's. This pattern began here. Fascinating, yes? fnar, fnar.
(4) The correction of W2 gives another interesting shape. A recurring theme, as at the end of W1.
The interesting bit is how the last drop in W1 provides the C but in W2 it finishes higher and therefore we are actually ending the 1-2 of W5. Great example of how waves and markets can really trip you up if you were waiting for this to drop low like W1.
Maybe we are doing something similar right now? It's rocket time?
Donations:
If this makes you money why not help me stay out of employment?
Want some important numbers? give me a DM.
paypal.me/timoverboard
Related publications
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.