BTC Thesis—October 2023First Published: October 5, 2023
Disclaimer:
Please be aware that the information provided in this post is for educational and informational purposes only. It should not be considered financial advice. Trading and investing in financial markets carries inherit risk, always conduct your own research and, if necessary, consult a qualified financial adviser prior to making any investment decisions.
Thesis Statement:
The primary objective of our monthly BTC Thesis is to deliver comprehensive Elliott Wave Theory (EWT) analysis, free from external influences or biases, to determine overall market sentiment. Through meticulous examination of the Monthly, Weekly, and Daily time frames using EWT, our analysis aims to identify key levels for potential Monthly candle highs and lows. This post caters primarily to traders seeking unbiased, EWT based evidence to support their own analysis, empowering them to make well informed trading decisions.
Introduction and Overview:
Welcome to our October 2023 BTC Thesis, where we provide a meticulous EWT analysis, free from external influences, to decode the fractal nature of EWT and pinpoint significant trading opportunities. Our primary focus is on identifying the potential Monthly Candle high and/or low.
In this analysis, we emphasize a bearish sentiment, as BTC currently undergoes a Wave 4 correction—notably an Expanded Flat. Our EWT count unveils a rare trading opportunity, the likelihood that the Monthly Candle high aligns with the bottom of Intermediate Wave 2 within the final Wave of this correction. Throughout, we stress the importance of a precise 5 Wave count down that will complete Wave C of the Cycle and the overall correction. The tone is clear: we anticipate further downside potential, urging caution and patience as we wait for the Wave formation to fully form.
Macro Analysis:
Our Macro Analysis begins on the Monthly time frame, delving into the rich history of price action data available on the BLX chart. EWT, known for its fractal nature, reveals a continuous wave formation, with Wave 1 of the largest degree always evolving. Currently, price action is navigating Wave 4 of the Super Cycle.
Notably, Wave 3 of the Super Cycle commenced in November 2011 and featured an extended Wave 3, and, Wave 5, terminating in an Ending Diagonal, implying the potential complexity of this Wave 4 correction.
We confidently identify the ongoing correction as an Expanded Flat, validated by Wave B surpassing the completion of Wave 5 and Wave C surpassing the completion of Wave A.
Price action for Wave 4 typically will retrace between between the Yellow 0.236 and 0.382 FIB levels indicated on the chart.
Wave Form Analysis:
Transitioning from monthly analysis, we maintain our focus on the ongoing Wave 4 correction. As we inspect the Weekly time frame, the fundamental 3-3-5 Wave form of an Expanded Flat becomes evident, sparking discussions about what we have marked as the completion of Wave 3 within this correction.
While there is a case to be made for a completed 5 Wave move down from the top of Wave B to the November, 2022 bottom, further analysis on the Daily time frame will be required to establish and validate a micro count.
Confluence between price action on the broader Monthly chart, where the absence of observable complete 5 wave moves suggests that the overall structure remains incomplete.
It is vital to underscore that an immediate reversal signal, similar the notable 'COVID dip,' remains absent, further strengthening the notion that the correction is still in progress. Additionally, current Wave 5 targets indicated by the Yellow -0.236 FIB level displayed on the Weekly chart have not been met.
Micro Analysis:
Transitioning from the Wave Form analysis, our primary focus is to establish a correct and valid count from the top of Wave B on the Daily time frame. This count is vital in determining whether the 5-wave move down, forming Wave C, has reached completion.
Starting from the top of Wave B in November 2022, we can clearly identify a 5-wave move leading to the January 2022 bottom, completing Primary Wave 1. Primary Wave 2, formed a Triangle correction completing on the March 2022 top. Primary Wave 3 unfolded with an extended Intermediate Wave 3, completing on the June 2022 bottom. Intermediate Wave 4 formed a Complex EWT Combination Correction that concluded on the November 2022 top, which marked the start of Intermediate Wave 5. Intermediate Wave 5 completed on the November 2022 bottom completing Primary Wave 3, and establishing a count invalidation number at the top of Primary Wave 1.
Despite Primary Wave 4 retracing deeper than average, it remained within the boundaries of valid price action, the count invalidation number, and adhered to the principles of the Law of Alternation, forming a simple Zig Zag correction, juxtaposed to the Triangle correction of Primary Wave 2.
Price action has indicated Primary Wave 5 has commenced, as such, a Micro Count Invalidation number can be established on the July 2023 top.
Presently, a validated five-wave move has been counted, descending from the July 2023 top, marking the completion of Intermediate Wave 1 within Primary Wave 5.
Our assumption is that price action currently resides within Intermediate Wave 2, of Primary Wave 5, of Cycle Wave C, of Super Cycle Wave 4.
Outlook:
Upon the completion of Wave 2, typically at the Blue 0.618 FIB Level indicated on the Daily time frame, an immediate retracement is expected as price action transitions into Wave 3. It is anticipated that this reversal will contribute to the formation of the wick on the top of the monthly candle.
While standard levels of expected price action are presented on the Daily time frame, it's crucial to acknowledge that Intermediate Wave 5 targets do not align with Primary Wave 5 targets, or, Super Cycle Wave 4 targets, suggesting the potential for an extended Intermediate Wave 3, and, Primary Wave 5.
Conclusion:
Our monthly BTC Thesis has provided comprehensive EWT analysis, providing traders and enthusiasts with an unbiased, EWT based understanding of BTC price action. This analysis, spanning the Monthly, Weekly, and Daily time frames, has been dedicated to identifying significant levels for the potential Monthly candle high, catering primarily to traders seeking EWT based evidence to support their trading decisions.
