Continuing Bull Trend; But First a BART Correction?
Updated
I’ve noticed a lot of BART moves in the charts lately. These are moves where whales pump the price, then consolidate/distribute, and after a short time dump. The result is a price chart that looks a little like the head silouhette of Bart Simpson, thus the name.
If we are due for such a dump, it should still follow the general rules of EW theory and correct to appropriate levels. But what’s disconcerting is the “suddenness” of these moves. Until market cap is considerably larger than currently, this is what we have to work with in these comparatively small, easily manipulated markets.
We are in the midst of a correction, but what’s not clear is whether or not we’ve finished the correction or we are still in the middle of it. In this post, I take the view that we are still in the middle of the correction, and that we have a little further to drop before resuming the upward trend.
The reasons I think this are several:
1. The wave counts show that we have completed the 3rd wave. A fib. retracement of 0.382 is very common for 4th waves, and this puts us at around a 7k region.
2. The correction thus far has exhibted some of the classic behaviour of an ABC correction, where we would appear to have finished the A leg, and are nearly finished the bull-trap B leg, now ready to commence the C leg. The target of this C leg would also put us somewhere around 7k.
3. This correction would appear to coincide with the right shoulder of an inverse H&S pattern which is not visible in this chart, but if you zoom out a bit, you will see that this right shoulder would be fully formed once it reaches the 7k region.
For these reasons, I believe we are headed to the 7k region before beginning the 5th wave of a broader trend reversal bull run.
Target 1: $7,000 (wave 4)
Target 2: $8,500 (wave 5)
If we are due for such a dump, it should still follow the general rules of EW theory and correct to appropriate levels. But what’s disconcerting is the “suddenness” of these moves. Until market cap is considerably larger than currently, this is what we have to work with in these comparatively small, easily manipulated markets.
We are in the midst of a correction, but what’s not clear is whether or not we’ve finished the correction or we are still in the middle of it. In this post, I take the view that we are still in the middle of the correction, and that we have a little further to drop before resuming the upward trend.
The reasons I think this are several:
1. The wave counts show that we have completed the 3rd wave. A fib. retracement of 0.382 is very common for 4th waves, and this puts us at around a 7k region.
2. The correction thus far has exhibted some of the classic behaviour of an ABC correction, where we would appear to have finished the A leg, and are nearly finished the bull-trap B leg, now ready to commence the C leg. The target of this C leg would also put us somewhere around 7k.
3. This correction would appear to coincide with the right shoulder of an inverse H&S pattern which is not visible in this chart, but if you zoom out a bit, you will see that this right shoulder would be fully formed once it reaches the 7k region.
For these reasons, I believe we are headed to the 7k region before beginning the 5th wave of a broader trend reversal bull run.
Target 1: $7,000 (wave 4)
Target 2: $8,500 (wave 5)
Comment
And here is the chart with an inverse H&S overlay zoomed out to the 8h time scale which suggests a 7k right shoulder target, followed by an 8.5k inverse H&S target.Comment
Just noticed this pinbar formation on the 8h chart which is a strong bearish signal. It's also showing up on the 4h, 2h, 1h, and 30m charts. A very strong bearish signal that further confirms the likelihood of downward movement.Comment
Wrong chart and silly TV for not letting me edit/delete. Here is the right chart of the pinbar formation on all major time scales, but shown on 8h.Comment
Looks like the pinbar reversal signal was invalidated as we've moved in the opposite direction. Now waiting for another reversal signal.Comment
Actually, there is a larger and even more important pin bar that's staring us right in the face. It can be seen above on the 8h chart at the beginning of the ABC correction. But it can also be seen here on the daily chart.Comment
The SEC is due to give a decision on the SolidX and Vaneck Bitcoin ETF Filing by August 16.“The commission in January asked would-be issuers to pull their applications until asset managers could answer a series of questions on custody, liquidity, market manipulation, valuation and arbitrage.”
Out of the list of concerns, market manipulation and arbitrage remain big ones and are still unresolved.
My question is, how can the SEC allow the launch of a Bitcoin ETF when whales can manipulate the market so easily (BART moves)? Central to this problem is that even if the SEC issues regulation preventing US-based exchanges from engaging in market manipulation, they cannot control/regulate exchanges outside the US, which is most of them. So any regulations that are issued will have essentially no effect. Crypto exchange regulation would need to be done globally in order for it to have an impact.
Here is a statement courtesy of former Gemini general counsel David Brill, in regards to the former Winklevoss brothers Bitcoin ETF application. These same reasons still hold true today:
“It seems unlikely, among all the other reasons, that the commission is going to want to move forward with a product where the major trading is done on exchanges that may not be following our AML giudelines.”
Given this, I cannot see how this or any other Bitcoin ETF is going to come to fruition at this time. At least not until Bitcoin increases substantially in market cap by many times thus taking away most of the market-manipulation power of whales, AND regulations on exchanges are instituted globally.
Buy the rumor, sell the news?
Comments welcome.
sec.gov/rules/sro/cboebzx/2018/34-83548.pdf
Comment
So it would seem the FOMO was just to strong, and the 7k wave 4 correction target fell short of being reached, with the lowest low attained of $7223.However, all the FOMO accelerated the completion of wave 5, and it seems we've topped. There is still the possibility of maybe another 100 points or so for a more complete wave 5 which would bring us exactly to a fib. 0.618 extension of waves 1-3, but all the profit taking means this probably won't happen.
The next step is most likely a correction of the now complete broader wave 1 to a fib. retrace of 0.5 to 0.618 corresponding to the $6750-$7050 range.
Comment
We are right on target with this correction, with a current low of $6890. A lot of people are surprised at the depth of this correction, but it is itypical of wave 1 impulse corrections. However, it looks like the correction is losing steam. Some bullish reversal patterns are appearing:1. Inverse H&S active with short-term upside target of 7.5k on 30m and 1h charts.
2. Clear RSI divergence for all of Bitcoin, Ethereum and Bitcoin Cash
3. BTCUSDSHORTS have sky-rocketed (17%+), and beginning to taper; short-squeeze likely coming soon
Comment
Inverse H&S retraced back below the neckline, so it has failed. It now appears we are in a range-bound accumulation zone, perhaps a BART pattern is in the works which we all know so well. But be careful, as there is still a bit of room to the downside, as 6.8k corresponds to the 0.618 fib. retrace of the broader bullish structure since the $5750 low.Comment
Looking increasingly likely that a retrace upward is just around the corner: 1. Increased volume
2. Engulfing candle on the daily forming (though not yet completed)
3. MACD cross-over on the 2h, 4h, 8h.
4. Clear RSI divergence on 2h, 4h, and 8h.
5. Double bottom
6. Massive shorts increase (30%+) points to a short squeeze
Short-term target: 7.5k+
Comment
Crazy. Completely unexpected dump from out of nowhere, especially in the major alts. Seems like the manipulators-in-chief are working overtime to make crypto markets as untradeable as possible. Traditional TA almost seems to be meaningless in this environment. We may be getting closer to a time when longterm HODL is the only option if you believe in crypto. At least until market cap is much larger than today, and markets are not so easily manipulated.Comment
I'm beginning to formulate a theory, and that theory involves 2 core ideas: 1) Bitmex, and 2) boycott.Disclaimer
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