BTC - Market Pullback & Where to Next
Updated
Well less than 48 hours after we mentioned that sentiment had turned to Greed and we should close trades and batten down the hatches the pullback came. But since we knew this MIGHT happen, we were prepared financially and mentally to not panic into Fear Selling. Bottoms are found by those in "Fear of Losing" and Liars.
So where to next? In order to calm myself I went over the chart looking for levels of interest, patterns, and more importantly where we are in the cycle just to confirm. Now keep in mind there are several counts and we could be in the midst of a broader pullback. $11,000 would be a low end target as we had mentioned in the previous post BUT a breakdown of $10,000 would put $6,000 in play. Now lets calm some fears and go over some facts.
1) There has been a huge inflow of money into the space and many of this money has not cleared yet as evident by Coinbase and other exchanges having 2-3 day delays.
2) The previous extension from wave "i" double topped at the 3.618 ($2900) level in wave 3. We fell short of that level.
3) The previous corrections have been bought up quickly forming "V" patterns. Why bet against the prevailing trend pattern?
4) There is just way too much pessimism abound, on twitter, news channels etc. Bubbles happen when everyone is optimistic not pessimistic
5) John Mcafee posted he would eat his ----- if this lasted longer than 4 days
Ok who is arguing with John?
So where to now?
It appears we hit the lower level of $11,000 that we posted 2 days ago. This is the exact reason we have to remove emotions from investing. What seemed in-probable 2 days ago happened this morning, but we understood this could happen so we did not panic sell. This is why we look for chart for guidance. If history repeats we should retest the previous high, however I think we hit closer to $22,500. Looking back at the previous (iii) wave we hit the 3.618 extension level. We fell short of that recently but only once have we not hit or exceeded the 1.618 extension. That extension is $35,281 so that would be a high end target. But this would complete wave 5 in our count and I believe the 0.786 level which is close to the 3.618 wave (iii) extension is the sweet spot. This is where I am taking some off the table looking for a longer term correction wave (IV) where I will look to buy for the preliminary target of 40k. Very Preliminary.
Keep in mind this is a long term chart to assist in guiding us in where we are based on Elliott Wave and sentiment indicators. EW is not a definite and 4 different analysts will provide 4 different counts, so this is my count and you should verify it with yours. Also keep in mind we can retest 11k and a breakdown would put $6000 in play as we could have completed wave (III).
I took the dip as an opportunity to buy BCH DASH and LTC. Yes LTC was just way too cheap to not scoop up and this is a longer term trade.
So where to next? In order to calm myself I went over the chart looking for levels of interest, patterns, and more importantly where we are in the cycle just to confirm. Now keep in mind there are several counts and we could be in the midst of a broader pullback. $11,000 would be a low end target as we had mentioned in the previous post BUT a breakdown of $10,000 would put $6,000 in play. Now lets calm some fears and go over some facts.
1) There has been a huge inflow of money into the space and many of this money has not cleared yet as evident by Coinbase and other exchanges having 2-3 day delays.
2) The previous extension from wave "i" double topped at the 3.618 ($2900) level in wave 3. We fell short of that level.
3) The previous corrections have been bought up quickly forming "V" patterns. Why bet against the prevailing trend pattern?
4) There is just way too much pessimism abound, on twitter, news channels etc. Bubbles happen when everyone is optimistic not pessimistic
5) John Mcafee posted he would eat his ----- if this lasted longer than 4 days
Ok who is arguing with John?
So where to now?
It appears we hit the lower level of $11,000 that we posted 2 days ago. This is the exact reason we have to remove emotions from investing. What seemed in-probable 2 days ago happened this morning, but we understood this could happen so we did not panic sell. This is why we look for chart for guidance. If history repeats we should retest the previous high, however I think we hit closer to $22,500. Looking back at the previous (iii) wave we hit the 3.618 extension level. We fell short of that recently but only once have we not hit or exceeded the 1.618 extension. That extension is $35,281 so that would be a high end target. But this would complete wave 5 in our count and I believe the 0.786 level which is close to the 3.618 wave (iii) extension is the sweet spot. This is where I am taking some off the table looking for a longer term correction wave (IV) where I will look to buy for the preliminary target of 40k. Very Preliminary.
Keep in mind this is a long term chart to assist in guiding us in where we are based on Elliott Wave and sentiment indicators. EW is not a definite and 4 different analysts will provide 4 different counts, so this is my count and you should verify it with yours. Also keep in mind we can retest 11k and a breakdown would put $6000 in play as we could have completed wave (III).
I took the dip as an opportunity to buy BCH DASH and LTC. Yes LTC was just way too cheap to not scoop up and this is a longer term trade.
Note
This is what I am monitoring to see if we correct further or consolidate and continue higher. Note
The left side is the current correction the right side is the correction at 4900Note
I'm definitely not shorting here, but keep in mind we can pullback. As we have stated numerous times corrections are difficult and unless something reveals itself to the contrary until the trend and pattern differs I do not guess. I would rather look for a setup to trade then try and time a top or bottom. Right now we just have to be patient and not get an itchy finger either way. What is different this time is the whole alt market is rallying back as well. This would lead me to believe the market over all is still bullish and BTC may be a laggard but will follow the market trend. I have added the HMA"s that I use for the one hour chart and everything is bullish. Now this can turn on a dime and during corrections it does. This is why we monitor trends and patterns and look for anything to provide us an edge over the market one way or the other. Slight differences between the two corrections but overall they are similar enough in nature with the big difference being we are in a final mid cycle wave 5 and a short term wave 5 so it would not be uncommon to see a rally to an ATH, or a failed rally. Note
levels of interest 
14K 11k 8k. 6k since we pulled back from the trend line. Not that we pullback to 6k but it is a level in the super cycle. Note
Update as we broke through the 14k level. Question is do we follow the same correction pattern that lead us to new highs in September or do we go lower from here and look to verify if we completed wave III above and are in wave IV. Keep in mine we thought we were in wave IV in September and we rallied higher. Regardless of how you feel you can not dismiss one for the other which is why we tighten it up and get to the sidelines taking profits off positions and batten down the hatches. Corrections are difficult and are seldom clear which is why we look at past corrections to help guide us, but these are guides only! Anything can happen!
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