BTCUSD - Elliott Wave Analysis - Wave C of IV - Possibilities
Updated
Woohoo, what a ride! Hope everyone is having fun, getting some trades going your way, or staying on the side lines (That's where I am mostly).
If the Wave B of IV high at 2938 holds, here are 3 possible scenarios for how Wave C plays out. Surprise, surprise, or not, these scenarios were expressed in a prior Elliott Wave forecast I wrote, back near the beginning of Wave IV.
Because the Wave II decline from the late 2013 high of 1160 to the early 2015 low of 152 between was deep and steep, retracing about 87% of the initial climb, and because of Elliott Wave principle's Alternation guideline, I have been calling for a Flat for Wave IV. If you are unsure of what a Flat is, it is an initial decline, shallow (23.6%) to modest (38.2%), of the height of the wave of the same degree, in this case Wave III by my count. The initial decline to A of IV, met that perfectly. Wave A of IV is followed by a rebound to near the old high of Wave III which completes Wave B of IV. And that's where we are.
Wave C should remain shallow to modest, preferably not exceeding Wave A. Wave C sometimes extends, but normal flats are more common. For more on Corrective Waves, read this: elliottwave.net/educational/basictenets/basics3.htm For more on the "personalities" of waves, including A, B, and C segments, read this: stockcharts.com/school/doku.php?id=chart_school:market_analysis:guidelines_for_applying_elliott_wave_theory
If the Wave B of IV high at 2938 holds, here are 3 possible scenarios for how Wave C plays out. Surprise, surprise, or not, these scenarios were expressed in a prior Elliott Wave forecast I wrote, back near the beginning of Wave IV.
Because the Wave II decline from the late 2013 high of 1160 to the early 2015 low of 152 between was deep and steep, retracing about 87% of the initial climb, and because of Elliott Wave principle's Alternation guideline, I have been calling for a Flat for Wave IV. If you are unsure of what a Flat is, it is an initial decline, shallow (23.6%) to modest (38.2%), of the height of the wave of the same degree, in this case Wave III by my count. The initial decline to A of IV, met that perfectly. Wave A of IV is followed by a rebound to near the old high of Wave III which completes Wave B of IV. And that's where we are.
Wave C should remain shallow to modest, preferably not exceeding Wave A. Wave C sometimes extends, but normal flats are more common. For more on Corrective Waves, read this: elliottwave.net/educational/basictenets/basics3.htm For more on the "personalities" of waves, including A, B, and C segments, read this: stockcharts.com/school/doku.php?id=chart_school:market_analysis:guidelines_for_applying_elliott_wave_theory
Note
Complete the Flat in a straight forward 5 wave impulse to the same level as the initial decline to Wave A. (Time is not to scale.)Note
Complete Wave C of IV as a Barrier Triangle. The height of the triangle could be deeper, down to Wave A at 1880 price level, before rebounding to the flat top, back down to the rising bottom of the triangle, and back up, until the pattern completes. This could take a while, and most traders and investors get very frustrated with this pattern. Shake you out and wear you out. The height of the top barrier may be lower than that depicted.Note
Enter into a falling wedge. The wedge may be shallow and lateral, it should not be deeper than a 50% Fibonacci retracement level to remain within the normal alternation guidelines for a shallow correction.Note
The Breakdown begins. Above you note the flat top Barrier triangle scenario. BTC has recently broken below a flat bottom barrier triangle.Note
Wave C or IV correction really starting now.Sell Mortimer Sell!!!
youtube.com/watch?v=obAoPP1bdIM
Note
It is way too early to know how Wave C of IV will play out. Trend lines and support level must be obliterated. Hope will slowly be quelled and replaced with uncertainty.Flats tend to complete in the vicinity of where Wave A completed. Look for a return to the 1800 to 1900 level.
If Wave A is any guideline for timing, look to the end of August or early September before Wave C completes.
Note
With a few moves complete after the reversal at B, we can now begin to conceptualize how the next steps might play-out for BTC. This does not forecast which larger pattern might emerge, though I am leaning toward a standard 5 wave impulse down to the eventual completion of wave C of IV.For long only traders, you''re waiting for higher probability trades, to the upside. That means waiting for the zig-zag corrections during a wave (2) [more likely] or a wave (4) [less likely]. These will follow the smaller degree completions of 5 wave moves downward of the smaller degree.
The timing of the trade-able future moves at this point are a swag, though the current upside correction to complete (4) in the chart below cannot progress much higher than the 2608.96 of a of (4), since wave (1) completed its downward move at 2611.39. Further, since wave (3) cannot be the shortest motive wave, wave (5) must be shorter than wave (3), since wave (1) was longer.
Note
Updated Count: Curse you BTC! What cannot be expected, the unexpected. A failed, or truncated 5th wave. Sheesh... I'm not making this stuff up.What's a Truncated or Failed 5th Wave? It's when the expected move falls short, sometimes not even exceeding Wave 3. Well it did that, but not much more. Here are a couple links for reference:
1. thepatternsite.com/EWTruncation.html
2. prognosis.nl/support/faq/principle/principle2.html
In any case, the A-B-C retracement has has reached the 61.8% level, while it may continue, there's not a lot of room.
If BTC does continue upward, in my opinion, it will not zoom into the next bull market, instead the correction will morph from a traditional downward impulse or motive wave, to the Flat Top Barrier Triangle. See the chart above. This "bottom" at 2400 fits that scenario perfectly.
On to today's wave count and moves...
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