Get started

Markov

Markov.paths.still@playDecisionImminentUpdate from my previous posts following BTC path through this consolidation period: - the most likely zone that the markov transition states pointed to has been the exact area where this has traded - BTCUSD now needs to decide on the next state - the yellow shaded rectangle is the most probable where this will trade from here - has 2 previous resistance trendlines (light red and light green) that it recently broke above and is showing to have support now at those trendlines, so this next anticipated zone makes a lot of sense In my initial post covering this stochastic phenomenon I layed out the premise that as n-parallel boundaries increase from base, the probability of breakout or breakdown increases. BTCUSD has positioned itself slightly in favor of breakout - has yet to commit to either. Regards, The Wonderful Wizard
BITFINEX:BTCUSD
by JerryManders
Semi-Critical Decision Here: Potential for 32580This is an update for my markov analysis of BTCUSD (2 updates preceeded this which are linked as related ideas and describe the concept and methodology). I will keep this one simple and you can refer to the previous ideas for details. BTC has been following this pretty nicely and any anomalous leaps over 1 transition state in a truncated period have been punished with equal and opposite reactions back to the regular path progression of transitioning 1-state per time period. The next 3 levels I am seeing are ranked with highest probability (very near term, this week - from there will update accordingly but 1 of the levels could create a change of character or at least initiate the start of one: Most likely next stop: 30795 (if this occurs in will have to make a more critical decision to consolidate and breakout locally or to reject and retest the 2800s for possible breakdown Second most likely next stop on the condition 30795 is broken is 32758 - this would open the door for the initiation of the change of character because it would be synonymous to jumping across a creek for those familiar with wyckoff. I would expect an explosive break right through 30795 if this path plays out. Third most likely is down from here to 28905 , at which point it would test support again and if there is enough pressure could break down and threaten the dreaded 23k (not really dreaded because that would merely set up for the next motive wave, however, this isn't an EWT analysis - this is a local analysis to examine how BTC is navigating this consolidation range in a stochastically-sophisticated way. Probability does not favor a sharp drop from here, rather, slightly bullish price action which could get the ball rolling for a bullish week in the market due to BTC/ES correlation that has become pretty apparent recently: BTC wears the pants in this relationship. Best, Judge Judy
BITFINEX:BTCUSD
by JerryManders
BTC markov method follow-up, initial pt reachedThis worked out scary well... I'd need a bigger sampe to confirm the method is consistent, but examine the following dynamics of the BTC movement through this "matrix" built around the initial symmetrical channel: - 31616.3 was my target last week when it was 28k merely because that level marked the upper bound (top point of local diamond) of the next most probable state - i.e. at the time of last analysis the most likely neigborhood of an adjacent state of 4 sections (individual boxes) had an upperbound at the 3161.3 level. - In general BTCUSD has been respecting each state like clockwork - this means when it gets near upper-bound of state it pulls back to lower bound of state and vice versa. The probability of the next state given the current state is based on the probabilities of the stochastic matrix, but one cn actually eyeball the tendency of yellow path (I call this the "yellow brick road" because it leads to the emerald city lol, i.e. new highs to around 83k by end of year; if it strays from the yellow brick road t risks meeting the wicked witch of the west, aka danger, aka risk to 13-23k to establish a bottom if we don't breakout of the markov grid (breakout would be around 34k-41k. So... the tendecy of the yellow path is like a connect 4 mid-point creek that moves +- 1 units in alternating (typically) fashion, every now and then going 2 up after a 1 down which gives it the updward drift pushing toward breakout. The reason there are intermittent consecutive ups with +2 and not +3, +4, +5,... within the +-1 pattern is because to go +2 in the time period for each state (which is constant) is still approximately linear, however after +2 it becomes non-linear - specifically expanding geometric with limit as n approaches infinity becoming exponential... The stochastic matrix is by design a system of linear equations so when a +2 and especially +3 occurs there is a bifurcation in the probability outputs (they go haywire) that signals this +3 or more w.r.t path is truly a change in structure ~ NOW THIS IS WHERE IT GETS INTERESTING: during the move off last weeks lows there was a break of structure (or at least break of expected path defining structure)... it moved up for 2 consecutive states and then "jumped" up a 3rd consecutive state (the mechanics of what this means are in the above point. The interpretation of what this means is more clear; the prediction of near-term price action now becomes more complex but at the same time it confirms that volatility will escalate and that makes it a traders market again which we all should love. See below for Interpretation and Prediction: Interpretation : I mentioned last week that the rate of state transitions was starting to accelerate around the chopzone at 28-30k and because of that the probability of next state being higher with upper bound (and therefore initial target) of 31616.3 was a lot closer to 1 than 0 (previously the transition probabilities had been around 74-78%, the initial shift took the probability to 88. Now the rate that the shift is accelerating has increased substantially and, thus, forced the path structure to a non-linear system. The question now becomes, (a) will it remain non-linear (a way to evaluate at a non-linear level via approximation will be to redefine the size of a state to be proportional with the degree of the non-linear form (e.g. quadratic (which is where it is currently would require a neighborhood of 8 (2 x 4) sections to capture the implied range)... if not (a) then it would likely exhibit properties similar to when an asset goes parabolic and then breaks down when the movement becomes unstable - in our case it would imply a sharp pullback to around 29-30k (equal but opposite to the non-linear degree realized by the movement to local maximum state) and that would ultimately reset back to the linear path (i.e. back into the sideways consolidation). b) is the bifurcation to non-linear path necessary to initiate the breakout from consolidation (rather than an anomaly that reverts back to linear base). (b) is the most plausible if it establishes new support here at the 31616.3. We are about to see moment of truth at this very moment and I have mapped out how to play both of the 2 possibilities: PREDICTION: - If 31616.3 can hold here as support, expect next leg up to attempt breakout around 34k-37k (has 41k old support above that to deal with ut were not there yet - if this doesn't hold it will test support around 30.8k, which if that fails expect the reset-to-linear scenario back down to the 28-30k range. - A third possibility (c) is that it over-corrects from the bifurcation in structure and goes from non-linear at degree +2-+3 into a non-linear -2 to -3 (which could take it to 23k-13k. Either way... we're not in Kansas anymore don't expect the boring sideways price action recently to continue from here. I'll update on which scenario has higher probability given condition around if it holds 31616.3. ~Best Knocksville Johnny
BITFINEX:BTCUSD
by JerryManders