Bitcoin Forum

As I understand it, Wave 5 should be less powerful than Wave 3.  This is essentially the basis for DanV's prediction that we won't see $5000 any time soon: wave 3 has happened, and wave 5 is up next.

https://www.youtube.com/watch?v=G8Zuj8xYUpY

My question is-- do the rules of E-Wave analysis change when one is analyzing commodities? 

I ask because, in my experience, commodities generally have a "blow off" top to end bull runs.  In other words, the final part of the bull is usually the strongest part.  That goes against the rule that Wave 5 has to be weaker than wave 3.  And Bitcoin, in my experience, trades much more like a commodity than a stock.

EW analysts would generally state that the blow-of was Wave 3. For example, Silver topped out at $49 in May 2011. An EW analyst might argue that the $45 reached on August of 2011 was the weaker Wave 5, or perhaps that Wave 5 is still to occur, which is what DanV suggests is the case with Bitcoin. If true then it is bad news for Bitcoin Nutters as that would mean that Bitcoin won't be taking out any ATH anytime soon, as he predicts that the wave 5 is far more likely than not, to fall short of the $1200 Nov 2013 highs. This kind of makes sense from a fundamental point of view as the China fuelled parabolic rise (also largely due to restricted supply) was absolutely staggering leaving us with both a massively overpriced BTC in addition to exuberantly inflated expectations and surely masses of investors who have experienced 'negative equity' with Bitcoin. It will take a lot of consolidating for Bitcoin to build a strong enough base to get over that.

I would say that the timing of the cycles in bitcoin is similar to that of a momentum stock. Look at a comparison of bitcoin with DDD for example:

https://i.imgur.com/LASGbR0.png

I would agree with OP that Bitcoin 5ths are generally larger even if not more powerful.
My theory behind this is that, as MatTheCat said, expectations are high compared to most assets, mostly due to the rate at which we have risen in the last 3 years. This leads to asks being pulled far more than other markets and allows the price to rise farther on less pressure creating the 5th wave divergences typical of tops. I believe we will still see new ATH's if DanV' count is good rather than having a truncated 5th. I also believe that when the 5th wave tops, the 3rd will still be seen as the most powerful (in actual momentum terms).

A blow off fifth wave is probable in such an instrument, because of the speculative/emotional nature of it. We have been following the analysis on a log scale, and if a blow off fifth wave was to present its self in exponential terms, who knows where it could go, although it is still likely to be less than $10k.