Bitcoin: Overlooking The Wave Count?
Updated
Bitcoin appears to be in a smaller magnitude Wave 4 (see chart) which implies one more push higher to complete the impulse structure. such a move can see price into the mid to high 46Ks over the next couple of weeks. While this is good news for those who have been or are looking to go long, there is one technical problem that is likely being overlooked by most.
I am using the general wave count idea to illustrate the smaller magnitude impulse structure at hand. I am not accounting for where Bitcoin is on the broader magnitude. If you go out to a monthly time frame (not illustrated here) the risk is much more obvious. The completion of the current impulse appears to be a Wave C of a large magnitude B (I will review this further in my stream tomorrow).
This is important because IF this structure turns out to be true, then the coming corrective wave is likely to be a broader C Wave. This can take price back to levels completely unexpected or foreseen at this time. An extreme instance can be a test of the structure low at 15K. Keep in mind, a wave of this magnitude can take MONTHS or even a year to play out.
While this is NOT meant to be a precise forecast, it does highlight important RISKS, particularly for investors. Current levels are NOT attractive because there is a greater chance these are cycle highs. It should be no surprise that the faketuber thumbnail titles are once again coming out with "it's just getting started" and "early investors will make millions".
Markets are mostly random and do not operate on logic. There is no way to know if this bearish scenario will play out or not it is a function of perception. The third leg of this rally was initiated by EFT news and halving anticipation. Realize that bearish perception of the same magnitude can also come of out no where.
For these reasons, I control risk by having LOW expectations of further potential at current levels. Risk is controlled by your category of strategy. Day trades and swing trades are the best way to navigate current levels for the coming month at least. The idea being not getting caught with longs at cycle highs and assuming the MOST risk while letting others out for a nice profit.
Thank you for considering my analysis and perspective.
I am using the general wave count idea to illustrate the smaller magnitude impulse structure at hand. I am not accounting for where Bitcoin is on the broader magnitude. If you go out to a monthly time frame (not illustrated here) the risk is much more obvious. The completion of the current impulse appears to be a Wave C of a large magnitude B (I will review this further in my stream tomorrow).
This is important because IF this structure turns out to be true, then the coming corrective wave is likely to be a broader C Wave. This can take price back to levels completely unexpected or foreseen at this time. An extreme instance can be a test of the structure low at 15K. Keep in mind, a wave of this magnitude can take MONTHS or even a year to play out.
While this is NOT meant to be a precise forecast, it does highlight important RISKS, particularly for investors. Current levels are NOT attractive because there is a greater chance these are cycle highs. It should be no surprise that the faketuber thumbnail titles are once again coming out with "it's just getting started" and "early investors will make millions".
Markets are mostly random and do not operate on logic. There is no way to know if this bearish scenario will play out or not it is a function of perception. The third leg of this rally was initiated by EFT news and halving anticipation. Realize that bearish perception of the same magnitude can also come of out no where.
For these reasons, I control risk by having LOW expectations of further potential at current levels. Risk is controlled by your category of strategy. Day trades and swing trades are the best way to navigate current levels for the coming month at least. The idea being not getting caught with longs at cycle highs and assuming the MOST risk while letting others out for a nice profit.
Thank you for considering my analysis and perspective.
Note
Brief Update: Since I wrote this and streamed my analysis (Monday), Bitcoin support at 40K has held. This formation has led to a number of buy signals across some of the major alts (refer to track record). One of the points I made on my stream was that IF Wave 4 does NOT overlap Wave 1 (within the magnitude numbered on this chart), then a test of high or Wave 5 is more likely. That appears to be the path Bitcoin is attempting to follow at this time. Again this does NOT guarantee a new high, but it illustrates the higher probability outcome. Keep expectations low by working on the day trade/swing trade time frame.
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