BITCOIN - Triangle Pattern In Elliott Wave Theory ABCDE - Signal
Updated
How do you Trade it?
Elliott Wave triangles are corrective patterns that consolidate the previous trend. Elliott Wave triangles consist of five waves labeled A-B-C-D-E. There are rules and three guidelines in the construction and identification of Elliott Wave triangles.
RULES
#1: THE SUB WAVES OF THE TRIANGLE DIVIDE AS 3-3-3-3-3
If you zoom in on the construction of the triangle, you should be able to identify three wave corrective moves for each of the five waves. (See image below)
#2: THE SUB WAVES MUST BE ZIGZAGS, MULTIPLE ZIGZAGS, OR TRIANGLES.
I have mentioned many times before how the zigzag is one of the building blocks for the Elliott Wave patterns. At least four of the waves must be zigzags. One wave can be more complex like a multiple zigzag or even another triangle.
#3: WAVE ‘C’ CANNOT MOVE BEYOND THE ENDING PRICE OF WAVE ‘A’
#4: WAVE ‘D’ CANNOT MOVE BEYOND THE ENDING PRICE OF WAVE ‘B’
#5: WAVE ‘E’ CANNOT MOVE BEYOND THE ENDING PRICE OF WAVE ‘C’
On each of the rules above, the final three waves of the triangle become progressively shorter than the previous wave. As a result, when you draw trend lines connecting the wave extremes, the pattern takes shape of a triangle.
There are three guidelines to identifying a triangle. First, triangles are found in only certain points in the wave structure. Most triangles appear as the second to last wave of the larger sequence. For example, in an impulse, a triangle may appear in the fourth wave position, which is the second to last wave of the five-wave impulse. Triangles may appear in the ‘B’ wave of a zigzag, which is the second to last wave of the A-B-C zigzag sequence.
Typical spots in the wave structure where you might find a triangle:
Therefore, when you correctly identify a triangle, it can tip you off as to the larger wave sequence because it provides a warning that the next move is likely an ending wave!
Another guideline in triangle construction is that the ‘B’ wave tends to retrace approximately 61-161% of wave ‘A’. If the ‘B’ wave overshoots and retraces 100% or more of wave ‘A’, then it is considered a running triangle. Running triangles are seen as strong indicators of a powerful trend. The trend was so powerful that the ‘B’ wave shot to a new price extreme.
Lastly, sometimes you can estimate termination points of the some of the waves in the triangle by comparing the current wave to its alternate wave. For example, you might find wave ‘C’ to be 61.8% or 78.6% the length of wave ‘A’. A similar ratio might be realized for wave ‘D’ compared to wave ‘B’ or wave ‘E’ compared to wave ‘C’.
TRADING TRIANGLES
The best way to trade an Elliott Wave triangle is to anticipate the end of wave ‘E’. Sometimes this is easier said than done. To estimate the end of wave ‘E’, use the estimation guideline noted above by measuring the length of wave ‘C’ and finding that level where wave ‘E’ is 61% or 78% of its length.
Also, draw a trend line connecting the wave ‘A’ and wave ‘C’ extremes. Many times, wave ‘E’ draws close and sometimes even overshoots that trend line. Stop loss and risk on the trade is placed at the wave ‘C’ price extreme.
Price targets can be found by projecting a fifth wave price measurement (in an impulse) or equal wave price measurement (in a zigzag). This typically yields a one to two risk to reward ratio or better.
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Technical analysis
Let's talk a little bit about the current BITCOIN situation.
Bitcoin remains under pressure, and it remains vulnerable. $10550 represents resistance, but we're considering lowering it to $10085.5 (BITMEX).
While BTC is at levels that could see price turning higher, I noted that volume measures show bulls continue to be on the sidelines. As such, the impetus for a meaningful move higher is muted. That makes the bears' work a lot easier and keeps BTC exposed. Until BITCOIN can break above $10085.5, as evidence for a completed correction, we'll have to allow for further possible lows.
The corrective nature of the price action suggests that BTC is setting up for at least another three waves below once this pullback ends. A zigzag unfolding for wave [E] is expected to at least test the $6500 to complete wave. Against $10085.5, we'll continue to allow for lower in a still-unfolding wave. A breach of $8100 would hint wave [E] is underway.
However, it is not uncommon for these crypto-currencies to stage abrupt reversals, therefore, be aware that a break of $10.085.5 could trigger upside acceleration. We on the lookout for evidence a reversal has occurred.
A further fall to the $6500 region would be catastrophic in the current scenario, I would be worried for the holders if it happens. But in my case I am not a BTC Holder, I am really a trader, so what really matters to me is my USD balance. I keep a portion of my portfolio at BitMEX for use in leveraged trade and the rest remains in USD on other exchanges. To be honest, My focus is on trading. So I really don't care if the price goes to go UP or fall. I'm ready for both scenarios and take a position according to the main trend. We have to analyze the scenario as a whole.
We're just patiently waiting for the price to reach our targets. Patience is the greatest virtue needed to be a successful trader!
It definitely looks the trend has reversed. That seems to be the perfect scenario to be followed by a solid downside thrust of based on "price action", based on Short-term demand expected in the zone.
Seems a perfect plan for Market makers
Remember, here shorts positions they are against the trend. All in all "Price action" may happen to trap greedy long position and big sharp volatility full of wipe out with a massive long squeeze.
Our philosophy focuses on capital preservation and good risk/return operations with a low-risk.
I will bring updates based on price action, If necessary!!!
- BlackMEX
Remember: $10085.5 is a critical resistance for this outlook.
------------------------------------------------------------------------
🔔XBTUSD 🔔
📉 SHORT / SWING
💹 BitMEX (x25)
🔀 Entry Zone: $9202
➡️ ENTRY POINT [1]: $9202 - $9195.5
⛔ STOP-LOSS: $10089 (-8.79%)
🏁 EXIT TARGET:
T1 = 8050 (+12.52%) (Short-term)
T2 = 6873 (+25.31%) (Short-term)
T3 = 6114 (+33.56%) (OBJETIVE)
T4 = 4887 (+46.89%) (Middle-term)
[Risk:Reward 1/3.82]
✅ Projected net profit: 33,56%
⛔ Projected stop-loss: -8.79%
Capital exposure: 10% of your balance [TOTAL]
Note: Prices can vary between Bitcoin exchanges, and consequently there may be differences in our chart prices due to different data sets.
This is how I will be keep my position. If you have a conservative profile and don't want to risk such a large part of your portfolio in this trade, you just have to reduce the % of your balance that will be used on sell orders, or reduce leverage."
------------------------------------------------------------------------
"Worse than not finishing a trip is never leaving."
– Amyr Klink.
- What is a triangle pattern in technical analysis
- How is the pattern constructed
- How and at what points in the pattern do you trade a triangle
Elliott Wave triangles are corrective patterns that consolidate the previous trend. Elliott Wave triangles consist of five waves labeled A-B-C-D-E. There are rules and three guidelines in the construction and identification of Elliott Wave triangles.
RULES
#1: THE SUB WAVES OF THE TRIANGLE DIVIDE AS 3-3-3-3-3
If you zoom in on the construction of the triangle, you should be able to identify three wave corrective moves for each of the five waves. (See image below)
#2: THE SUB WAVES MUST BE ZIGZAGS, MULTIPLE ZIGZAGS, OR TRIANGLES.
I have mentioned many times before how the zigzag is one of the building blocks for the Elliott Wave patterns. At least four of the waves must be zigzags. One wave can be more complex like a multiple zigzag or even another triangle.
#3: WAVE ‘C’ CANNOT MOVE BEYOND THE ENDING PRICE OF WAVE ‘A’
#4: WAVE ‘D’ CANNOT MOVE BEYOND THE ENDING PRICE OF WAVE ‘B’
#5: WAVE ‘E’ CANNOT MOVE BEYOND THE ENDING PRICE OF WAVE ‘C’
On each of the rules above, the final three waves of the triangle become progressively shorter than the previous wave. As a result, when you draw trend lines connecting the wave extremes, the pattern takes shape of a triangle.
There are three guidelines to identifying a triangle. First, triangles are found in only certain points in the wave structure. Most triangles appear as the second to last wave of the larger sequence. For example, in an impulse, a triangle may appear in the fourth wave position, which is the second to last wave of the five-wave impulse. Triangles may appear in the ‘B’ wave of a zigzag, which is the second to last wave of the A-B-C zigzag sequence.
Typical spots in the wave structure where you might find a triangle:
- Fourth wave of an impulse wave
- ‘B’ waves of a zigzag pattern
- ‘X’ of ‘Z’ waves of complex combinations
- ‘Y’ waves of a W-X-Y combination
Therefore, when you correctly identify a triangle, it can tip you off as to the larger wave sequence because it provides a warning that the next move is likely an ending wave!
Another guideline in triangle construction is that the ‘B’ wave tends to retrace approximately 61-161% of wave ‘A’. If the ‘B’ wave overshoots and retraces 100% or more of wave ‘A’, then it is considered a running triangle. Running triangles are seen as strong indicators of a powerful trend. The trend was so powerful that the ‘B’ wave shot to a new price extreme.
Lastly, sometimes you can estimate termination points of the some of the waves in the triangle by comparing the current wave to its alternate wave. For example, you might find wave ‘C’ to be 61.8% or 78.6% the length of wave ‘A’. A similar ratio might be realized for wave ‘D’ compared to wave ‘B’ or wave ‘E’ compared to wave ‘C’.
TRADING TRIANGLES
The best way to trade an Elliott Wave triangle is to anticipate the end of wave ‘E’. Sometimes this is easier said than done. To estimate the end of wave ‘E’, use the estimation guideline noted above by measuring the length of wave ‘C’ and finding that level where wave ‘E’ is 61% or 78% of its length.
Also, draw a trend line connecting the wave ‘A’ and wave ‘C’ extremes. Many times, wave ‘E’ draws close and sometimes even overshoots that trend line. Stop loss and risk on the trade is placed at the wave ‘C’ price extreme.
Price targets can be found by projecting a fifth wave price measurement (in an impulse) or equal wave price measurement (in a zigzag). This typically yields a one to two risk to reward ratio or better.
=============================================================================
Technical analysis
Let's talk a little bit about the current BITCOIN situation.
Bitcoin remains under pressure, and it remains vulnerable. $10550 represents resistance, but we're considering lowering it to $10085.5 (BITMEX).
While BTC is at levels that could see price turning higher, I noted that volume measures show bulls continue to be on the sidelines. As such, the impetus for a meaningful move higher is muted. That makes the bears' work a lot easier and keeps BTC exposed. Until BITCOIN can break above $10085.5, as evidence for a completed correction, we'll have to allow for further possible lows.
The corrective nature of the price action suggests that BTC is setting up for at least another three waves below once this pullback ends. A zigzag unfolding for wave [E] is expected to at least test the $6500 to complete wave. Against $10085.5, we'll continue to allow for lower in a still-unfolding wave. A breach of $8100 would hint wave [E] is underway.
However, it is not uncommon for these crypto-currencies to stage abrupt reversals, therefore, be aware that a break of $10.085.5 could trigger upside acceleration. We on the lookout for evidence a reversal has occurred.
A further fall to the $6500 region would be catastrophic in the current scenario, I would be worried for the holders if it happens. But in my case I am not a BTC Holder, I am really a trader, so what really matters to me is my USD balance. I keep a portion of my portfolio at BitMEX for use in leveraged trade and the rest remains in USD on other exchanges. To be honest, My focus is on trading. So I really don't care if the price goes to go UP or fall. I'm ready for both scenarios and take a position according to the main trend. We have to analyze the scenario as a whole.
We're just patiently waiting for the price to reach our targets. Patience is the greatest virtue needed to be a successful trader!
It definitely looks the trend has reversed. That seems to be the perfect scenario to be followed by a solid downside thrust of based on "price action", based on Short-term demand expected in the zone.
Seems a perfect plan for Market makers
Remember, here shorts positions they are against the trend. All in all "Price action" may happen to trap greedy long position and big sharp volatility full of wipe out with a massive long squeeze.
Our philosophy focuses on capital preservation and good risk/return operations with a low-risk.
I will bring updates based on price action, If necessary!!!
- BlackMEX
Remember: $10085.5 is a critical resistance for this outlook.
------------------------------------------------------------------------
🔔XBTUSD 🔔
📉 SHORT / SWING
💹 BitMEX (x25)
🔀 Entry Zone: $9202
➡️ ENTRY POINT [1]: $9202 - $9195.5
⛔ STOP-LOSS: $10089 (-8.79%)
🏁 EXIT TARGET:
T1 = 8050 (+12.52%) (Short-term)
T2 = 6873 (+25.31%) (Short-term)
T3 = 6114 (+33.56%) (OBJETIVE)
T4 = 4887 (+46.89%) (Middle-term)
[Risk:Reward 1/3.82]
✅ Projected net profit: 33,56%
⛔ Projected stop-loss: -8.79%
Capital exposure: 10% of your balance [TOTAL]
Note: Prices can vary between Bitcoin exchanges, and consequently there may be differences in our chart prices due to different data sets.
This is how I will be keep my position. If you have a conservative profile and don't want to risk such a large part of your portfolio in this trade, you just have to reduce the % of your balance that will be used on sell orders, or reduce leverage."
------------------------------------------------------------------------
"Worse than not finishing a trip is never leaving."
– Amyr Klink.
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SPOT vs OTC vs FUTURESTrade active
So you think that the BITCOIN move is insane?I know people will in here to tell me that Bitfinex is irrelevant, and for a good reason. Ok!
Just one thing: Trading solely on "Bitfinex Shorts" would have served you very well the past years. Visual attached.
That has indeed occurred in the past but since the March low Bitfinex short claims have been marking lows
Remember what I said about massive Bitfinex shorts closing at tops.
A ~2,700
BTC short just covered on Bitfinex.At a $9,700 average, somewhere around $26 million notional.
Nearly 1/3 of the open short interest on Bitfinex.
Everything goes according to plan. I hope that this tops out finish soon. Technically speaking, we are not done with the CME gap yet. This is an important point!!!
⚠️ I'm just saying! CAUTION! ⚠️
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$26 million. Nearly 1/3 of the open short interest on Bitfinex.⚠️ DUMP IT!!! ⚠️
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OTC X STOP X FUTURES
Note
Market UpdateBTC needs some attention.
Bears in action and weak bulls. Today candle broke down a consolidation, Volume falling along with price, which according to the technical analysis principles tells us that this movement was just a correction before a larger movement. With high chances for new lows and probably more blood incoming. The Dump was quite strong, the price has broken the crucial 9.7k level, which was a decision level between bull and bear market in the short-term, and that should change the market sentiment to completely "Bearish" for the coming days. We were expecting to see that strong dump after a lot of bullish signs, but the last word goes to the market maker chart. On the chart you can see wave structure which is bearish, the price has finished 3 waves inside the bigger ABC correction, so waves structure is aiming for more drops and prices below 6.5k. We were very close to the 0.382 Fibonacci level of the entire rise from 3k, but some people who have had TONS of opportunities to sell BITCOIN over 10k or even 9.8k and have not done it when they should ...What the fuck is the logic of this?
So if we see a break of $8100 and then immediately a strong move with giant volumes and volatility this will mean are here market makers. The current stop at 9.4k zones should be just a pause since the market is clearly bearish now (on 4h timeframe). The current consolidation structure is bearish. The drop doesn't necessarily should happen just right now, the price can keep consolidating on the current level for another 1/2 days before another drop.
We are going to see a price reaction from 6k - 5.5k+ zone to decide which what to do take place. Before the market is Bullish. We are watching price action closely and aiming to see confirmations for another scenario and a new position.
Are we here at BlackMEX seeing a world different from everyone else?
I suggest you look at the previous posts here on BlackMEX and understand once and for all the right way to trade bitcoin.
Today while the vast majority of people are terrified about the bitcoin crash losing important support, we are happy to see our SHORT order hit... A carefully studied and planned order since May 15th as you can see.
If you want to win in this market, you need to be COLD and CALCULIST.
We will be just patiently waiting for the price to reach our entry.
It is easy to interpret the charts. But very difficult to understand the human mind.
Patience is the greatest virtue needed to be a successful trader!
As you prefer, BlackMEX is stronger than ever!!!
I will post new updates if anything important happens based on price action, If necessary!!.
- BlackMEX
NOTE: Click on the link to get this more detail
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Who is in control?The Bulls trying it again! Did you trust the BITCOIN bulls? If you did, you get your reward! DUMPED!
You need to think in a different way from most people to get results also different from most people...Being a trader obviously requires skills in interpreting charts correctly, but what is really important is to have emotional control and to be psychologically strong to act in the opposite direction to most traders.
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What if the elite knew this was coming and bought crypto two years ago... and are sitting on positions that stand to go parabolic if the scenario I submit here unfolds? Feels plausible to me at least.
Will it come after a sharp washout first to scare any would belong?
Let's see if this mess gets more out of control... people tend to do things when panic ensues that they thought was out of the question initially.
When money becomes the focus of fear... any solution will be accepted.
... before a parabolic movement would begin ... a flashcrash, to liquidate longs.
My fear is the size of the sale that can wipe out the "ALTS"... and wipe out a lot of money from the market!
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[MARKET UPDATE]Hello Everyone,
Bears in action. I believe we will see more blood over the weekend with an attempt to break the ~9k support.
We a decision level to "BEARS" in the short-term, and that should change the market sentiment to completely "Bearish" for the coming hours. This breakout is very interesting/important for BEARS!
In my opinion, we will test the 8100k region soon. How price will react in this range will be very important for continuing a short-term downtrend. Let's see how the bulls act in the next few days. [Watching]
If necessary I will bring updates based on price action.
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