BTC - The Final Run before a Correction
Updated
Break out the party hats and champagne the Crypto market reached 200billion dollars!
"NOT SO FAST MY FRIENDS" (LEE CORSO)
Excluding Bitcoin the overall market capitalization is still in bear territory. It is still down 20% from it's all time high. In the past two weeks it has dropped another 5% and only the time the beast (btc) has rallied to new highs! But there is another coin that is contending for market share. BCH' during this same time rallied and gained 2-3% of the overall market cap. So if we take that out and we are actually down 22-23% overall in the alt-coin market. Hardly time to be bullish OVERALL.
Ok take it for what it is worth, I've been calling for a correction since $4500. Then long at $4750 for $6000 where I called for yet another correction. Then $6250 broke and yet another long for $7100. Ouch!! Yes I know it sounds like I'm a perma-bear but I'm really not. Long term I think BTC' moves higher but it takes fresh money to do this and I just do not see it yet! This is not contrary to my BCH' post this morning I just think the two coins will end up providing different means of money transfers, so I'm ignoring segwit at the moment and looking at the fact that BTC' has name recognition by even those not passionate about the space. I watched CNBC yesterday and they were basing BTC's price on new wallets. I think they forgot many are going to private wallets because of the fork, so I am ignoring this fundamental indicator and think it's garbage.
So today I introduce another indicator which is commonly misused. The Stoch RSI. It is a momentum indicator that many use for day trading. (keep this in mind when using it)
I think at this point we have a pretty clear wave count. At least I feel this is a valid one though I have seen one other by marcPmarkets that is valid as well. There are only slight differences to be honest, so you may want to take a look at his chart as well. We currently broke the trend line of the recent rally so it is safe to say we will get a pullback to wave "iv". Now I had this yellow channel up on a previous post as to me this is the trend channel and why I have 3&4 labeled where I do. So why not just say hey we topped that should be the completion of that wave, well looking at wave 5 it is possible, but I wanted to see if there was a clear 5 wave count in this fractal here as well. I'm not sold at least on the 4 hour chart. Normally 3rd waves are the strongest which is why I believe we just completed wave (iii). So I believe we will fall back and retest the channel. Why do I believe this. Let's look at the SRSI and RSI! The stoch is a momentum indicator and often is a PRE indicator to a correction (for day trading). So I adjusted it for the 4 hour chart and I noticed something. Note where the trend broke back into the channel and the labels on the RSI' and SRSI'. Note the SRSI forecast a correction back into the trend channel BEFORE IT HAPPENED. So it's likely probable we enter the channel again. But this is just temporary in my opinion. We still are likely to rally to another ATH' based on the wave count and I marked it around $7600. This is the 2.618 extension from 3 to 4 which has yet to be hit. Now does that mean it has to happen? NO there is one other count around (iii) that we could have double topped already, but I still think with the upcoming fork we should rally one more time.
There may be a day-trade setup around the $6500 range. If we hit $6500 we could maybe look at a trade to $7500 and with a $6250 stop area that provides a nice 1:5 risk reward play. Remember I do not like risk rewards under 4 for BTC as it's too volatile right now. However keep in mind the fundamental game changer. Anything goes wrong with Segwit2x and just crumple up the paper and throw it away. Also look for consolidation and a break of the box. Watch for a pullback which could be a trade killer. But let's get there first, we could go straight to $7500 from here.
"NOT SO FAST MY FRIENDS" (LEE CORSO)
Excluding Bitcoin the overall market capitalization is still in bear territory. It is still down 20% from it's all time high. In the past two weeks it has dropped another 5% and only the time the beast (btc) has rallied to new highs! But there is another coin that is contending for market share. BCH' during this same time rallied and gained 2-3% of the overall market cap. So if we take that out and we are actually down 22-23% overall in the alt-coin market. Hardly time to be bullish OVERALL.
Ok take it for what it is worth, I've been calling for a correction since $4500. Then long at $4750 for $6000 where I called for yet another correction. Then $6250 broke and yet another long for $7100. Ouch!! Yes I know it sounds like I'm a perma-bear but I'm really not. Long term I think BTC' moves higher but it takes fresh money to do this and I just do not see it yet! This is not contrary to my BCH' post this morning I just think the two coins will end up providing different means of money transfers, so I'm ignoring segwit at the moment and looking at the fact that BTC' has name recognition by even those not passionate about the space. I watched CNBC yesterday and they were basing BTC's price on new wallets. I think they forgot many are going to private wallets because of the fork, so I am ignoring this fundamental indicator and think it's garbage.
So today I introduce another indicator which is commonly misused. The Stoch RSI. It is a momentum indicator that many use for day trading. (keep this in mind when using it)
I think at this point we have a pretty clear wave count. At least I feel this is a valid one though I have seen one other by marcPmarkets that is valid as well. There are only slight differences to be honest, so you may want to take a look at his chart as well. We currently broke the trend line of the recent rally so it is safe to say we will get a pullback to wave "iv". Now I had this yellow channel up on a previous post as to me this is the trend channel and why I have 3&4 labeled where I do. So why not just say hey we topped that should be the completion of that wave, well looking at wave 5 it is possible, but I wanted to see if there was a clear 5 wave count in this fractal here as well. I'm not sold at least on the 4 hour chart. Normally 3rd waves are the strongest which is why I believe we just completed wave (iii). So I believe we will fall back and retest the channel. Why do I believe this. Let's look at the SRSI and RSI! The stoch is a momentum indicator and often is a PRE indicator to a correction (for day trading). So I adjusted it for the 4 hour chart and I noticed something. Note where the trend broke back into the channel and the labels on the RSI' and SRSI'. Note the SRSI forecast a correction back into the trend channel BEFORE IT HAPPENED. So it's likely probable we enter the channel again. But this is just temporary in my opinion. We still are likely to rally to another ATH' based on the wave count and I marked it around $7600. This is the 2.618 extension from 3 to 4 which has yet to be hit. Now does that mean it has to happen? NO there is one other count around (iii) that we could have double topped already, but I still think with the upcoming fork we should rally one more time.
There may be a day-trade setup around the $6500 range. If we hit $6500 we could maybe look at a trade to $7500 and with a $6250 stop area that provides a nice 1:5 risk reward play. Remember I do not like risk rewards under 4 for BTC as it's too volatile right now. However keep in mind the fundamental game changer. Anything goes wrong with Segwit2x and just crumple up the paper and throw it away. Also look for consolidation and a break of the box. Watch for a pullback which could be a trade killer. But let's get there first, we could go straight to $7500 from here.
Note
Wow BTC just never ceases to amaze me. Let's see if BCH follow suit!Note
Looks like we completed wave (v) in magenta at the $7500 target level. We were hoping to get a pullback to $6500 for a trade to this level but seldom does the market go the way we want. I have updated my count with a final target of 8100ish level which is the extension of wave ii in the larger move which should complete wave III in the long term since 2014. Of course if we can always go higher, or stop short, but the fibb levels have been pretty accurate as of https://late.https://www.tradingview.com/x/m4foNxD4/
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