BTC: Where is the base: Update

Updated

This is an interesting confluence.

I've been trying to narrow down where exactly BTC will land as the next local bottom comes in.

In my view, BTC is currently printing a second seven-wave crash structure, completing an ABC correction in what, for me, is Wave 6 down in a seven-wave ascent to its blow-off top at 80k.

$41,496 has been emerging for me as a key line of confluence (see linked analysis).

But here I thought I would reverse engineer the Fibonacci sequence and see what $41,496 reveals if I place it both on the 0.786 in a downside direction, and the 0.618 in an upside direction.

We know where the last local top is, at $64,977, so where is 0 and 1 in these Fibonacci sequences?

Interestingly enough, 0 in the upside direction for the 0.618 is precisely on the low of 11 March 2020. So this moment marks a return to the golden pocket of the entire bull run to date.

1 for the downside direction is on $35,182, right in the middle of the bull flags of the January correction, and aligning with the 34 EMA on the weekly.

If BTC does in fact bottom on $41,500, the April-May correction would have come in at -36%. This would align, for me, with the seven-wave structure, as Wave 6 down should be deeper than Wave 1 or Wave 3. BTC should then embark on Wave 7, within which the seven-wave structure is repeated.

Wave 7 should be most parabolic of the seven-wave structure.

NOTE: None this assures that 41.5k will be met. I could be wrong, and BTC may go deeper, or not get there at all. It's just the level I'll be looking out for.

Feel free to comment.

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16 May 2021 21:57:48: For those who may be inclined to catch knives, which is something best done on the 5-minute chart, I think it is possible that the first stab down as the structure completes is the deepest. The fractal in the linked analysis ("BTC: Will 43.3k mark the base?") is pulled from the A wave. What we're seeing, in EW terms, is the C wave, the end of which is not a relief rally amid a downside movement, but a reversal. 25 March might serve as a visual reference for what the bottom and bounce may look like.

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16 May 2021 23:50:15: 5-minute chart. It's difficult to count, because the final seven (which itself is a sub-wave within a larger seven) is very condensed. But it appears to me that BTC is printing wave 6 up, which should be followed by the final reach down of wave 7.

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16 May 2021 23:58:15: Anecdotal, but the absence of CryptoQuant BTC exchange inflow alerts does suggest to me that the base is near.

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17 May 2021 00:20:05: Wave 6, which rolls up, is always a little unnerving when trying to do counts on such small timeframes, and when this a sub-wave within a larger wave. There's also another seven within the final wave 7 of the sub-wave. Sometimes you can see it on the 5s chart.
BTC has so far reached and just pushed through 0.702. And BTC does love that level. Below is the 0.786. Might the base already be in on the 0.702? It's possible. I'm holding out for the 0.786.

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17 May 2021 01:07:46: Looking at the volume spikes, it's possible the base is in. Hard to be sure either way this moment.

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17 May 2021 01:11:07: Right as I post that last update, I get a BTC exchange inflow alert. Current value, 1,939. Possibly enough to take it down to 41.5. Today has been light in terms of those alerts.

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17 May 2021 01:37:54: Significant ladders of buy walls on the Tensorcharts heatmap for Binance, from 43.8 down to 42.8. But nothing really below that. Virtually no sell walls above where price is currently (45.7). Buyers and sellers closely matched numerically. Moderate volume overall.

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17 May 2021 01:53:18: This candle makes me feel the base is in, at 43.8 and not 41.5. I can't be sure, but it starts to look that way.

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17 May 2021 02:17:59: Nope. Sticking to 41.5 and let's see. Zooming out gives more perspective. We're in wave C. It most often is bigger than wave A. And you can see the characteristics of what is currently being printed (wave 7) vis-a-vis the same structure that was present in wave A.

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17 May 2021 02:50:53: It's hard to estimate when it will get down there, even if it does, but it's fascinating that the next wave down, wave 7, if it is printed, is itself a seven-wave structure.

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17 May 2021 03:23:09: This is a 1m chart. Again, not easy to do the count, but it looks like waves 1-4 of wave 7 are in.

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17 May 2021 04:19:49: CryptoQuant BTC exchange inflows alert. Current value: 3,732. That's enough to push BTC down significantly.

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17 May 2021 05:16:57: Adjusting the wave count positioning a bit, as things become clearer. There's a lot of noise, but I'd say we're going in now for wave 5 down. Probably at least three hours to go, perhaps more. Wave 6 rolls back up before the final thrust down on wave 7.

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17 May 2021 06:29:35: What I see currently. I don't think the base is in yet. But it's close.

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17 May 2021 06:42:59: A lot of liquidity on the order book still to soak up at 42 and below.

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17 May 2021 07:42:59: So into the final seven (though 6 to 7 also will be a seven-wave structure, if you viewed on the 1s timeframe). So far, I expect 41.5 to be tapped. We'll have to see if it holds.

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17 May 2021 07:53:38: Wave 5 is in, out for wave 6, mirroring what is above it, down for wave 7.

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17 May 2021 08:00:26: Wow. That changes everything:

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17 May 2021 08:02:11: There were huge buy orders (400 BTC size) sat at 42. Seems they got bumped up.

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17 May 2021 08:09:19: Breakout, and structure annulled. Each should decide for themselves, but while there is plenty liquidity still at 41 and thereabouts, I think it unlikely that level is visited now. Good luck everyone.

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17 May 2021 21:58:53: Okay, what do we have.
1) From the most simplistic starting point, we have a 0.5 Fibonacci retracement from the 14 December 2020 breakout above the previous ATH.

2) From a monthly perspective, we have a massive bull flag.

If we drop down to the weekly timeframe, that bull flag encompasses the range BTC has been in since mid-February.

I don't see that bull flag playing out to the dollar, but the potential is there nonetheless for a 100k+ BTC.

3) Baseline on the Ichimoku cloud currently at 40.5 on the weekly.

4) BTC currently tapping the 200 EMA on the daily.

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5) We need to look at the lower timeframes, but so far we've tapped 42.3 and 42.1. In both cases, we've seen rejection to the upside, so we can assume that this zone has significance. If we adjust the Fibonacci in the original chart accordingly, it puts the base of the macro Fibonacci of the entire bull run within the wick of 11 March 2020, rather than precisely on its bottom.

6) Until now, I'm assuming that we're close to the bottom, and that for the purposes of a local Fibonacci this aligns with the 0.786.
7) In terms of the candle body, this last candle on the 10-day chart is almost certainly going to close lower than the 20 February 2021 candle. As such, for me, the seven-wave structure to 80k remains in play.
8) Dropping to the lower timeframes, we've been looking to see Wave C of an ABC corrective structure play out. This is Wave A.

It was an open question for me whether we should be seeing a double-tap retest of the base or not. It is to be expected in Wave A, as the whole correction is still in play, with downside pressure. But as Wave C comes in, it sometimes will not happen, because the base marks a reversal point.
9) This is Wave B.

10) This is Wave C.

We could make a rough projection of the base by placing the 0.786 of a Fibonacci sequence on the bottom of wave 5 within Wave C. This established 43k as a zone of interest.
11) As it turned out, and unlike for Wave A, the Fibonacci for wave 5 of Wave C fell between the 0.702 and the 0.786, at least so far. While Wave C is always equal to but sometimes greater than Wave A, we could also measure Wave A in percentage terms to establish confluence in terms of a zone of interest.

12) Dropping down to even lower timeframes, we could track the unfolding of Wave C. It is a seven-wave crash structure within which, in the seventh sub-wave, the seven-wave crash repeats, and the same within the seventh wave of that sub-wave, and so on. This is what I was looking at this morning, practically down to the 1m chart.

13) What you look for is for a series of sevens to complete together. This should then mark the base of Wave C. In reality, as you get down to the lowest timeframes, the wave structure distorts and it does become difficult and somewhat subjective where you place the wave count. So while it's an interesting exercise, and while I think traders should not use the lowest timeframes only to time entries, it's certainly possible to get lost down there, as the sevens within sevens play out.
14) At first it appeared there was a break of structure this morning, coinciding with another tweet by Elon Musk. An expected roll up of the local wave 6 formed what appeared to be a breakout candle. But this is perhaps a good example of how, when looking at very small timeframes, it's good to keep an eye on the larger ones too. Because looking at this now, I think this wasn't a break of structure after all. It was simply the printing of the last bear flag.

15) You can see more clearly the correspondence between Wave A and Wave C if you zoom out. What happened this morning appears to be simply a backtest that perhaps has just completed.

16) So is it over? Tentatively, it does appear so to me. But we'll only really know if and when BTC clears at least 51.6.

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17 May 2021 22:08:39: From looking at the Binance order book on the tensorcharts, there remain large buy orders at 42, 41.5, 41, 40.5 and 40.2. Generally the market doesn't end up leaving large demand behind. Nothing remarkable at present in terms of exchange inflows, or volume.

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One of the screenshots above got duplicated by mistake. This is Wave A, for those interested

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17 May 2021 22:45:45: Fractal overlay of Wave A and Wave C. Wave C significantly faster, if the double-tap backtest is in, and it's all over.

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45.8 is the immediate level to clear.

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18 May 2021 21:07:47: Very difficult to discern what is happening within the zone BTC is currently in. It's a reversal zone, in my view, so the waves get distorted. It seemed until now that Wave 7 was complete. But it's possible that it isn't. I had estimated its end point by placing the 0.786 on Wave 5 down. But the 0.702 instead gives a deeper downside target of around 39.7. I had in the chart above estimated that BTC would touch the 0.681 of the uptrend of the entire bull market (the golden pocket of demand), but it's very possible that it wicks into this zone. Especially if this entails liquidations, which it well might if many judged that the base is fully in. The box here shows the space of Wave 7. What is difficult is that within Wave 7 you also have seven-wave fractals repeating. The small box at the end should / could also contain seven waves. Until now I don't think the bull run has ended, and I expect 5-wave Elliot ascent out of here. The bearish scenario is an ABC up that segues into another zig zag crash structure. This would be a double zig zag down. For many reasons, I don't think this will happen. But in either case, the situation will soon be clear for alts. Either immediate rampage or a few more months added to the bull run if BTC pushes up to 80k.

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19 May 2021 06:38:40: Looking for a sustainable bounce now.

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19 May 2021 12:46:24: Roughly speaking, 59.5 is now the clear level to reach and clear

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19 May 2021 14:10:53: Hate to say it, but if you're long this market you should monitor your positions very carefully. There's now a risk that the near bottom for BTC is 30. There was a fake out in the circle marked on this chart, and I discounted in my wave count. If we include it, it's possible we just saw Wave 5 come in. Despite the fact that at these lower levels there are all kinds of event happening that can push a projection to breaking point, my initial count is looking invalid, with apologies, and a new count would put 30 as a possible base. This really would be incredible. BTC has not given back 50% in a bull run before. We should see a relief rally now (if indeed what came in is 5) into the zone marked off on this chart (41.5-44.9). This might be a zone in which people should take decisions. It's a horrible situation, because you might be selling the best entries you can get, if the bull market continues, and you caught the bottom. But there is real risk of a deeper push down. The 200 EMA is currently at around 35k. If this isn't Wave 5, and is just an extension within 7, we might not see a relief rally to the zone mentioned, but rather an immediate push down to 35.

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19 May 2021 14:35:49: Update to that. If this is Wave 5 and not 7, and if Wave 5 comes in on 35, we're looking to Wave 7 coming in at 28, which would be a 56% correction from the previous ATH.
If that is the case, we'd be looking for a relief rally for Wave 6 between 40.4 and 44, before the drop to 28.

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19 May 2021 14:55:15: This is way outside anything that can be charted with TA

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19 May 2021 15:50:27: I truly feel for anyone who sustained losses today. We all know that nothing posted on Tradingview constitutes financial advice. But we listen to each together, and we try to weigh probabilities. A lot of people paid attention to the original chart on this post — more to this chart than any other I published. This made me nervous, but I felt confident in the general outlook. The chart was simple, even simplistic, but based on an assessment of the state of the cryptocurrency market, BTC's current bull run within it, as well as the history of previous BTC bull runs, and alt seasons. In the large aspect, I leaned towards the camp that the BTC bull run was not over; hence the correction that started 14 April was just that — a mid-cycle correction. It remains to be seen if that will remain the case, or whether 65 was the top — final or intermediate — for BTC in this cycle. But so far we have a -54% correction, and it's not clear to me that the bottom is fully in. 27 to as much as 21.3 seems still possible. And we have the narrative in China banning financial services companies from transacting in cryptocurrencies to support — or veil — what was going to happen anyway. Technical analysis is not prophecy. Nonetheless, I was trying to accurate. Not for anyone else: for me alone. I also lost on positions today. I misjudged the wave count in one critical juncture. Perhaps because I didn't give enough attention to worst case scenarios. If anyone suffered the same harm I did because of anything I posted here, I'm very sorry, and am in solidarity with your pain. This market can be brutal, and today was a brutal day. Raise your heads. We can endure. Never give up. Not even if your last dime was lost. Determination costs nothing. Even empires lost can be rebuilt. Onward!

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21 May 2021 11:00:59: I presume that everyone attentive is aware of Wyckoff distribution at this stage.
This is what my current information tells me:
1) What I had originally counted as Wave 5 down should never have led to the depth of what would have been Wave 7 down on that original wave count. I do not believe that liquidation events dramatically distort charts. Rather, crash structures foretell the extent of the price drop, and people are liquidated to the extent to which that price would drop anyway. So I'm currently assuming that what I originally counted as Wave 5 down is in fact Wave 3, and that what would have been Wave 7 on that count, is in fact Wave 5. In other words, we're in Wave 6 now, and Wave 7 down, to complete the crash structure, will follow.
2) I cannot be sure of this. It's not a nice projection to consider. But I feel I should aware of the possibility, and that others should also be aware of the possibility. It's difficult to assess what this really means, and what course of action should be taken, particularly relative to altcoins. Is this a massive but albeit limited mid-cycle correction? Or it is a full-blown crash after a significant peak? If a crash, we really should have seen a massive rotation into alts. We did see some, but not enough to be comparable to previous alt seasons relative to BTC tops. If BTC heads down further now, will alts take off into this movement? This is a key question, and I don't have any answers. For those already in alts, is this a time to rotate into BTC, at least temporarily? As we know, -30% for BTC translates to -50% or more for most alts. At least in the short term. Yes, we saw some strong bounces in the past few days (ADA, for example). Will we see the same if BTC crashes further? I have no answers, and it's a difficult situation to face, in terms of temporary capital preservation. Happy to hear the views of others on this quesiton.
3) Based on the rough method of measuring Wave 7 using the 0.786 of the Fibonacci placed on Wave 5, and 1 of the Fibonacci being Wave 7, this suggests that 21.4k could be next, if indeed we are currently in Wave 6, and there is a further downside move to come.
4) In terms of key SMAs and EMAs, a downside move to 21.4 would put BTC in risk of a death cross on the 50 and 200-week EMAs, if there wasn't a very strong bounce at this level. Essentially a V-bottom right out of there. If this cross happened, it would most likely signal conclusively the arrival of a bear market. We can only estimate whether that would happen. It would all depend on subsequent volume. But it does seem at least possible that 21.4 could be hit without a subsequent W EMA 50 and W EMA 200 death cross.
5) Volume is falling. For BTC to fully escape a downward move, it needs to clear 44.1 and then 48.6. But the bottom at 30 would only really be confirmed past 50.6. Volume, so far, doesn't appear to be comforting in terms of projecting any of these near targets.

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21 May 2021 14:10:01: I'm trying to investigate further. I don't think any of this will be conclusive. I'm looking at March 2020. It's problematic in terms of the wave count, as I will show below, but Wave 5 is certainly pronounced, and falls on the 0.702 Fibonacci relative to the bottom of Wave 7. Note the two spikes in sell volume.

Compare to one spike in sell volume now.

Note also that in March 2020 BTC essentially went into a sideways range, and revisited the downside, though not below Wave 7's bottom.
Wave 5 to Wave 7 happened within a 16-hr period.
Is this an indication that Wave 7 is already in now?
Or does it indicate that Wave 7 is imminent, and just slightly more drawn out than in March 2020?

Note that if Wave 5 on the 0.702 was repeated now, this would give a downside target of Wave 7 at 17k, which is staggering and somewhat hard to imagine.

The roll up from 5 to 6 was very short, and didn't reach the 0.382. Unlike now, if we're still in Wave 6 now. BTC is currently hugging the 0.5. Is this an indication that Wave 7 is in?

The biggest anomaly is if Wave 7 is in, why did it drop 10k below where it should have come in relative to Wave 5. And why was Wave 5 not obvious and very pronounced on the chart, as it always is?
You would have to see this as Wave 5:

The problem is that it's not pronounced at all, and in fact is shorter than Wave 3.
The roll up to Wave 6, in that instance, would align with expectations in not going above the 0.382.

But nothing makes sense relative to Wave 7.
What could make sense is placing Wave 5 here. But then there's barely any Wave 6 at all - not even reaching the 0.236

I said the March count is problematic. You can see it here.
The crash was not part of an ABC movement, so it's difficult to pinpoint where to start the seven-wave count. Normally, you'd want to start from the last highest high. But in March, BTC was already trending down before the crash structure plays out. However, Wave 3 is pronounced, and Wave 5 is the biggest, so no other count makes sense in this example, if we're looking for those two events. And in March 2020, we know where Wave 7 came in.

Conclusions? I don't really have any. But the absence of two clear spikes of sell volume is concerning.
The fact that Wave 5 in March 2020 also came in on the 0.702 is alarming, in terms of the potential downside base of Wave 7 if that same structure repeats now, and the bottom still isn't in.
Between the 0.702 and 0.786 is where Wave 5 comes in relative to Wave 7. But I don't find until now any real consistency in why it could be either one.
I would like to see BTC V-bottom out of there, and quietly go on to inch up to a new ATH, allowing alts to recover and run, and perhaps see a revival of alt season in a couple of months. But I remain gravely concerned that Wave 7 may not be in. And in a quandary about what this means, in terms of preserving capital at this very moment.

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21 May 2021 16:23:29: This is interesting, but perhaps meaningless. This is the 2017 bull run peak and blow-off top, with the relief rally that reached the 0.702 Fibonacci. Above that rally are two lines. Yellow and red.

If what we saw was Wave 5 before Wave 7, and Wave 7 can be projected at 1 relative to the 0.702 or 0.786 Fibonacci levels, if Wave 5 hit only the 0.702 Fibonacci, Wave 7 would come in on the yellow line, at 17.4k.

This level is derived from the top of the seven-wave movement down.

Wave 5 of Wave A in the ABC movement came in between the these two Fibonacci levels.

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21 May 2021 17:03:55: IF (and it's a big if) we've only seen Wave 5, you can see from the A Wave of the ABC structure where we might be currently. I'd expect some kind of relief rally, back up to around 41, before moving into the final phase of Wave 7 down.

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21 May 2021 17:58:15: I'm not sure we'll see a relief rally. It starts to look like we just had (in Wave 6) an ABC corrective pattern and are now going into Wave 7 directly. Below is the B wave of the whole macro ABC movement. Wave B is an ABC corrective wave.

Compare to what we just had, obviously on a much smaller scale:

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21 May 2021 17:59:32: Volume is dropping, nonetheless. To drive Wave 7, if that is what coming (again, it's a big IF), we might expect to see sustained volume. At best, however, this latest price action has to be taken as a warning of potential further downside.

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21 May 2021 18:02:13: Large buy wall (500 BTC+) on Binance at 33k. 630 BTC currently at 35k. See: tensorcharts.com/

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21 May 2021 18:22:32: IF this is wave 7 coming in, within it the seven-wave structure is repeated. I would say the first drop looks like a Wave 3 within that structure.

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21 May 2021 18:35:47: This might never happen, but these are roughly the levels I would be looking for if this indeed Wave 7 being printed.

ianrdouglas

AgitationZone | TA-focused cryptocurrency Discord channel discord.gg/atGcaRzz

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