Ethereum Catching a Wave: Bitcoin Corrective Tsunami?
Updated
It appears we may be in the middle of a larger corrective ABC Elliott Wave, rather than at the end of one.
On a related note, I was looking at the BTCUSD chart, and saw what seemed to be a large corrective ABC Elliot Wave which we are right in the middle of, having only recently begun the C leg. A correction that can bring us down to $3000-$3600, and possibly lower given the right conditions.
But switching between the various USD currency pairs, I noticed that the same descending pennant pattern is showing up in ALL crypto-USD pair charts!
What this tells me is that the correction that is happening is bigger than originally thought. I surmised it would be more-or-less limited to Bitcoin. But now I see that it will affect all crypto markets. Kind of like a corrective tsunami that we are presently right in the middle of, but has gradually snuck up on us and cloaked itself as a lower-level correction. And all the hype, and painted rockets, and visions of the moon blinded us to the fact that it was there.
Insight: Bitcoin dictates the broad bearish or bullish trend of the entire crypto market. Within that broad structure, all other cryptos can have their own individual bearish or bullish trends or counter-trends. But they are comparatively much smaller movements within the broader picture. When there are large movements in Bitcoin, it brings everything with it.
Given this, the recent ETHUSD correction can be seen in a new light. I originally believed that ETHUSD was essentially finished with this correction, and it was preparing for upward movement, eventually to new highs. However, recent price action confused me, and coupled with some good posts from other members, caused me to look a little deeper. And if Bitcoin is the crypto that “rules them all, and in the darkness binds them” then a deep correction of Bitcoin is going to have powerful effects across all crypto markets, bringing all markets down with it. Just look at the big correction in July. Bitcoin, and all cryptos recovered, and will certainly do so again, but it’s a heck of a ride that we may be able to derive some profit from.
In light of this, the recent ETHUSD price action can also be seen as:
1. Correction from ~$390 to $267 as the A leg of a giant ABC correction.
2. The bullish rebound back to $340 as the B leg of the ABC correction.
3. And finally, the movement down from $340 to where we are now ($300) as a portion of the way down the C leg of the ABC correction.
We will need to watch supports closely. If $265 is taken out in the coming days, then this larger correction will likely be in play. And in this case we can be looking at prices for ETHUSD in the $213 range, as this will correspond to a fib. 1.0 extension of leg A of the large ABC correction. If this support is taken out, we are next looking at prices in the $183 range as the fib. 1.236 extension of leg A. And if this support is also taken out, then, heaven help us, we are looking once again at the lows we established during the previous mega-correction in July, namely, prices in the $135 range as the fib. 1.618 extension of leg A.
We can also look at this from the perspective of a parent wave correction for comparison. Specifically, as the wave 2 correction of a large wave 1 that began in July after that correction. Price movements also support this Elliott Wave numbering, so we should consider it. In this case, Elliot Wave guidelines suggest a price correponding to the fib. 0.5 retracement of wave 1 giving $267 which we’ve already reached. If this price is taken out, then the fib. 0.618 retracement of wave 1 gives $236. And if this is taken out, then the fib. 0.764 retracement of wave 1 gives $199. And if this is taken out, the fib. 0.854 tracement of wave 1 gives $176.
(continued in update below...)
On a related note, I was looking at the BTCUSD chart, and saw what seemed to be a large corrective ABC Elliot Wave which we are right in the middle of, having only recently begun the C leg. A correction that can bring us down to $3000-$3600, and possibly lower given the right conditions.
But switching between the various USD currency pairs, I noticed that the same descending pennant pattern is showing up in ALL crypto-USD pair charts!
What this tells me is that the correction that is happening is bigger than originally thought. I surmised it would be more-or-less limited to Bitcoin. But now I see that it will affect all crypto markets. Kind of like a corrective tsunami that we are presently right in the middle of, but has gradually snuck up on us and cloaked itself as a lower-level correction. And all the hype, and painted rockets, and visions of the moon blinded us to the fact that it was there.
Insight: Bitcoin dictates the broad bearish or bullish trend of the entire crypto market. Within that broad structure, all other cryptos can have their own individual bearish or bullish trends or counter-trends. But they are comparatively much smaller movements within the broader picture. When there are large movements in Bitcoin, it brings everything with it.
Given this, the recent ETHUSD correction can be seen in a new light. I originally believed that ETHUSD was essentially finished with this correction, and it was preparing for upward movement, eventually to new highs. However, recent price action confused me, and coupled with some good posts from other members, caused me to look a little deeper. And if Bitcoin is the crypto that “rules them all, and in the darkness binds them” then a deep correction of Bitcoin is going to have powerful effects across all crypto markets, bringing all markets down with it. Just look at the big correction in July. Bitcoin, and all cryptos recovered, and will certainly do so again, but it’s a heck of a ride that we may be able to derive some profit from.
In light of this, the recent ETHUSD price action can also be seen as:
1. Correction from ~$390 to $267 as the A leg of a giant ABC correction.
2. The bullish rebound back to $340 as the B leg of the ABC correction.
3. And finally, the movement down from $340 to where we are now ($300) as a portion of the way down the C leg of the ABC correction.
We will need to watch supports closely. If $265 is taken out in the coming days, then this larger correction will likely be in play. And in this case we can be looking at prices for ETHUSD in the $213 range, as this will correspond to a fib. 1.0 extension of leg A of the large ABC correction. If this support is taken out, we are next looking at prices in the $183 range as the fib. 1.236 extension of leg A. And if this support is also taken out, then, heaven help us, we are looking once again at the lows we established during the previous mega-correction in July, namely, prices in the $135 range as the fib. 1.618 extension of leg A.
We can also look at this from the perspective of a parent wave correction for comparison. Specifically, as the wave 2 correction of a large wave 1 that began in July after that correction. Price movements also support this Elliott Wave numbering, so we should consider it. In this case, Elliot Wave guidelines suggest a price correponding to the fib. 0.5 retracement of wave 1 giving $267 which we’ve already reached. If this price is taken out, then the fib. 0.618 retracement of wave 1 gives $236. And if this is taken out, then the fib. 0.764 retracement of wave 1 gives $199. And if this is taken out, the fib. 0.854 tracement of wave 1 gives $176.
(continued in update below...)
Note
Because Bitcoin looks poised to correct 30% or more, I’m inclined to think the same will happen to much of the market, with variances of course. Some altcoins tend to magnify large changes in Bitcoin, while others seem to dampen them.Another signal is the reduced volume and loss of momentum. <Putter, putter>.
In summary, these are the fibonacci targets that may come into play when each preceding target-as-support has been taken out. The targets with asterisks I believe have a stronger chance of materializing when Bitcoin reaches it’s correction low in the $3500-$3000 range:
1. BTC corrects 10% (
4K) => ETH target I: $2672. BTC corrects 20% (3.5k) => ETH target II: $236**
3. BTC corrects 30% (3k) => ETH Target III: $213**
4. BTC corrects 40% (2.5k) => ETH Target IV: $183
5. If Bitcoin corrects ~50% (2k): ETH Target V: $135-$176
Note
Just a clarification if it wasn't clear: this is a correction, after which, I believe we will eventually return to new all-time-highs. But first the pain.Note
Target reached. However, comparing Elliott Waves across major crypto markets (some markets have clearer wave structure that can be used to help fill in the picture in sibling markets), suggests we may have one more leg to go in this wave C subleg. It's quite possible to break through 200, and perhaps down to the mid 180's or lower before stability returns. For example, $183 correponds to the fib. 0.618 extension of subwaves 1-3 of wave C, and also corresponds to the Fib. 1.236 extension of wave A.
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