Skip to main content

Bitcoin: Two Schools of Thought

Bitcoin market has a huge confusion in defining the market trend. Every dip puts people think that we are going down to zero and every rise makes them think that we are going to touch a new ATH. A part from the underlying value, news and sentiments, we need to dig deeper into the historical data to stress on present and future.

Here are some numbers that will be validated in near future, or at least in this summer to see the market orientation. I hope this will set a new way of thinking and addressing the problems to non-technical people, investors and readers.

Figure: Elliott waves are subjective lines that vary from person to person and notions/wave counting is also a trivial solution. The intention of this illustration is to show case the scenarios and possibilities together in one sketch that have been around & a clear discrimination is felt.

Here are two schools:

  1. A downtrend since Dec 17, 2017 is continuing till today & all pullbacks that we have seen till the date of this article (March 14, 2018) were false bullish signals. 
  2. The bull-bear cycle has been completed & market is in consolidation for the rest of summer/year.

Facts & Figures: 

SCHOOL#1 (Price range 0 – ATH): 

Maximum retracement hasn’t been achieved. If so, then it can be either at Fib0.382 (7594), which has already been breached, a condition that has already been ruled out) or at Fib 0.236 (4690), a possibility. The mean (Fib0.5) of this school is 9940. 

In above chart you will notice a clear continuation of a bear cycle. Against the rules, this assumes that there are more than 3-corrected waves and the bear channel is heading southeast. The nomenclatures are of little value here since we are stressing on the overall development of the major dip. The chart also annotates all primary Fibonacci levels traces from 0 to ATH. If this channel goes down to Fib0.236, the future BTC will be priced around 4000. Sentimental wise it will also increase buying interest and thus might have been supported at this attractive price. Aiming the hype, many people will be interested to buy BTC around this buying range. On the other hands, spoilers and rumors will continue to play their role so a strong fight around this number is very likely and BTC may hold around 4K for months given this scenario happens.
 

SCHOOL#2 (Price range 6k to 11.7K): 

The previous retracement was at Fib0.382 (8200). Maximum anticipated retracement is at Fib0.236 (7362.0). Obviously a full retracement of this trend will be 6000. The mean of this school is at Fib0.5 is 8880. 


A better illustration of BTC market. Post five major waves, BTC was set for corrections that have already happened. This interpretation considers beginning of Feb 2018 as a new local cycle that is nearly ending. Or in a better way, the consolidation phase where the mean BTC value is around 0.236 (8700) post B-C corrections. There is also an annotated pitch-fork that is bullish looking. Prior to local corrections during the consolidation phase, BTC was settled around 0.25 of this trend. However, post correction, BTC is holding close to the potential support line i.e. 100% retracement. If this level fails, then a fresh bear cycle may start. If this holds, then bullish looking BTC will continue its Feb momentum and may eye at testing 11.7k or 12k in coming weeks.

Verdict


Today or in near future, if BTC holds above 7362, the School#2 will be the most likely scenario. Else, the School#1 will be the accepted market condition.

Comments

Post a Comment

Popular posts from this blog

Bitcoin (March 18-30): Integrated Gann Fan Analysis & Trades

https://invst.ly/6-gn0 In this chart you can clearly see how the time & price are related when the fall happens in early Gann angles (1/8 to 1/2) & then the price pulls back as a bear flag & then takes time until it reaches the Gann 1/1 (45deg angle). That severs as a resistance and the price moves along this line until it completes the correction cycle i.e. ABC. Then the price breaks out and results in a swing i.e. bull run since it is over 45 degrees & chances are greater that BTC will either move sideways or do a bull run. Based on this, I decided to go long.
Post a Comment
Read more

Timing a Bitcoin Event

Here are some screenshots for timing a bitcoin event: I used Fibonacci Time Zone to predict a price swing. As the time stretches, the prediction may go less certain since news, trends, and market holds change, a point where you throw away the old trend curve and place a new one as per new set trend. Note:  Fibonacci time prediction is only used to locate a time with +/- relative error for a price swing. It doesn't tell what type of swing do you expect. That should be done by balancing  this observation with other technical parameters. Proven Bitcoin Major Trend Reversal (1D) Here are my predictions for timing BTC swings. The image below is a capture of March 7 event where a major price swing may happen. See the subsequent chart for confirmation & what happens next. Tip: To look at these charts, follow the vertical blue lines, which point a major price swing around (+/-1 day). As the time progresses, the error increases. Minor Trend Reversal ...
1 comment
Read more

Bitcoin Arrives at the Next Swing Zone (Oct 18): A Major Move with 6 Months Long Trend Ahead

Throughout the year, I have been following just one Fibonacci time zone prediction that worked very well. Whenever BTC arrived closer to these zones, something has to happen for some reasons: (a) Previous trend was losing steam (b) Extended cosolidation June 24 was the best example though when BTC closed below support (6K) & recovered in the following day. Thus, the swing zone prediction worked very well and the declining trend put a rally that gave significant profits. The rally failed an till Oct 18, the zone held the support & never closed above 6135 (on GDAX). If you see my previous analysis, whenever BTC lands on the support, I kept on finding evidences of volume/momentum divergences. What do we see now is that BTC holds the support with regular and hidden divergences against the volume and momentum indicators. Recent events, drop on Oct 11 to 6135 & breakout on Oct 15 of 6800 both turned fake. Here is a chart annotating the four fake drops, which held the ...
Post a Comment
Read more