Critical Levels - EW analysis

[podyx]

I personally would think a slow and steady growth like we've had the past few weeks would be very bullish?

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[RyNinDaCleM]

it's charts like this that lead me to hesitate on calling this a top though, how do you see this developing if your model was invalidated and the bull run were to continue?

https://www.tradingview.com/v/nOHd1wTW/

The analysis given is a local count. it may fit within the bigger picture in many ways including that count. Im not sure about that one though, I dont think falling wedges may occur in wave position A.

Yes, you can have a leading diagonal in wave-A however, it will be just like a wave-1 LD in that it will have 5 clear, impulsive waves. Takes form of 5-3-5-3-5 and has overlap of 4-1. It fulfills two of those requirements, but not the impulsive one. If it were a LD, the B would hit 50% of the fall from 1163-152 in very short order and the C will very likely end up in the double digits. I do not subscribe to a LD formation, personally, but that's not to say it's not a complex correction taking the basic shape of a diagonal.

I personally would think a slow and steady growth like we've had the past few weeks would be very bullish?

Is that a statement or a question?

[Bit_Happy]

Will the 20000 bitcoin bitstamp sell order at $300 throw your calculations off a bit?

NO.

care to elaborate?

Panic selling always pushes the price as far as it can go, you can count on it that we are at tough support here. count how many bitcoins have been sold over the down trend. A small order like 20k bitcoin is easily absorbed over the exchanges.

I respect your attempt to find order in the chaos, but you can't account for the human element in your equation. At the time of this writing, a very serious vulnerability has been discovered in bitcoin. this attack is known at the FRONT attack, i posted a thread about it earlier. Its going around on the mailing lists. The attack is of minor concern, as it would require alot of money/bitcoin to exploit and freeze the network, but its very real, and very much going to be a factor into the bitcoin price over the next few months. Entities like NSA and Terrorist groups probably have the resources to exploit this attack vector, if they so choose.

We made it through the winter without seeing a FRONT attack. Nice attempt at fear-mongering, I'll need to learn more about that one.

[podyx]

I personally would think a slow and steady growth like we've had the past few weeks would be very bullish?

Is that a statement or a question?

A question i guess

[chessnut]

As wave iv was a triangle (terminal move) and we have clearly five waves to the upside reaching a fair target for wave v, I am confident that a correction or a complete reversal is due at this point. A full retrace of wave v is likely. A break under 1650 confirms a complete reversal for some time. I cant yet say it is a complete reversal with confidence because what came before this impulse is not entirely clear, it could be the case that we just completed wave iii but I doubt it.

Bumping this post ^^

I personally would think a slow and steady growth like we've had the past few weeks would be very bullish?

Is that a statement or a question?

A question i guess

Ive seen large trends kick off both violently and steadily. We are not looking for one or the other, we are looking for form. I think it is more important that we have large base than steady growth.

We made it through the winter without seeing a FRONT attack. Nice attempt at fear-mongering, I'll need to learn more about that one.

LOL I forgot about that one. thanks for reminding us, good laugh 

[michaelGedi]

chessnut, in terms of wave structure what do you read in the way this price is stagnating near the top of your last count (V). Is this read as an extension of the wave, or something else?

If this question is elementary, feel free to link me elsewhere


I'm assuming this is the bulls last gasp on this run, others may call it consolidation but the low volume attempt today on 300 seems to add evidence to an exhaustion of this run.

Also, the longer we stay here the longer we are (close to) butting against long term downtrend resistance, depending on how you draw and what scales used etc.

forgive me for asking questions with obvious answers: I know your current count is local, but am I right in assuming that this could be a longer term top? From your last posts, if $265/1650CNY breaks then that is more likely the scenario yes?

thanks

[HalFinneysBrain]

Some thoughts:

Several months ago Ryan and Chessnut posted EWave charts showing a final wave V decline below the 275 October low, to <some unknown but low target level>, followed by the birth of the new bull market / next leg up. 

They were correct in their counts, and the wave 5 plunge took us from the November high all the way down to the 150-160 range depending on which exchange you look at, on Jan 13.



But for some reason, they aren't bullish now, and instead looking for wave V again?  This makes no sense to me. 

The positive divergences in MACD that Ryan predicted have occurred.  MACD is on buy signals now.  The 1D MACD gave a buy signal, then the 3D MACD gave a buy signal, then the 1W MACD gave a buy signal.  3 day moving averages just crossed over into buy territory. 

The wave structure of this bear market looks complete to me.  It looks EXACTLY like Ryan was predicting all along (really great job on that prediction, seriously!) 

So why now look for another decline back to the lows?  I can understand looking for a moderate pullback here to maybe 270, tha's perfectly reasonable (but not guaranteed), but why expect low 200s again, or even lower than that?  This seems absurd to me, and contrary to both the charts and the Bbitcoin fundamentals and recent VC funding, which look stronger than ever now.

The January bottom was a much stronger bottom than the previous ones.  The massive volume we saw at the low, the crash of over 25% within hours, it was intense, and we already retested the low 200 levels in February, and have now had a rally which has lasted MUCH longer than the failed November rally.  Why remain bearish?


Is there something about Elliotwavers that makes them so bearish all the time?  I remember looking at Robert Prechter's counts of Gold in the early to mid 200s, when he just stubbornly kept looking for a wave V down to $200 an oz, even while Gold kept rising and rising. 


There seems to be this obsession with a rally off the bottom having to exactly fit your expectations, or else it doesn't have a chance of being a new Bull market.  The rallies off of crash lows like we saw in January arent always perfect looking 5 wave moves up, but they still can be the beginning of the new move up. 

Doesn't it make more sense to stick with the count that was correct, which labeled 5 waves down culminating in the January crash, and treat the price action over the past 2 months which has now turned many technical indicators bullish as being the new bull market move?

I don't mean to be overly critical, and I think your guys calls during 2014 were amazing (and they caused me to hold onto a good chunk of money which I then bought with in the 200s, instead of spending it all last year at higher prices, so thank you!)  But why still be bearish after the count was fulfilled and we should be in a new upmove?

Thanks

[SmoothCurves]

Some thoughts:

Several months ago Ryan and Chessnut posted EWave charts showing a final wave V decline below the 275 October low, to <some unknown but low target level>, followed by the birth of the new bull market / next leg up. 

They were correct in their counts, and the wave 5 plunge took us from the November high all the way down to the 150-160 range depending on which exchange you look at, on Jan 13.



But for some reason, they aren't bullish now, and instead looking for wave V again?  This makes no sense to me. 

The positive divergences in MACD that Ryan predicted have occurred.  MACD is on buy signals now.  The 1D MACD gave a buy signal, then the 3D MACD gave a buy signal, then the 1W MACD gave a buy signal.  3 day moving averages just crossed over into buy territory. 

The wave structure of this bear market looks complete to me.  It looks EXACTLY like Ryan was predicting all along (really great job on that prediction, seriously!) 

So why now look for another decline back to the lows?  I can understand looking for a moderate pullback here to maybe 270, tha's perfectly reasonable (but not guaranteed), but why expect low 200s again, or even lower than that?  This seems absurd to me, and contrary to both the charts and the Bbitcoin fundamentals and recent VC funding, which look stronger than ever now.

The January bottom was a much stronger bottom than the previous ones.  The massive volume we saw at the low, the crash of over 25% within hours, it was intense, and we already retested the low 200 levels in February, and have now had a rally which has lasted MUCH longer than the failed November rally.  Why remain bearish?


Is there something about Elliotwavers that makes them so bearish all the time?  I remember looking at Robert Prechter's counts of Gold in the early to mid 200s, when he just stubbornly kept looking for a wave V down to $200 an oz, even while Gold kept rising and rising. 


There seems to be this obsession with a rally off the bottom having to exactly fit your expectations, or else it doesn't have a chance of being a new Bull market.  The rallies off of crash lows like we saw in January arent always perfect looking 5 wave moves up, but they still can be the beginning of the new move up. 

Doesn't it make more sense to stick with the count that was correct, which labeled 5 waves down culminating in the January crash, and treat the price action over the past 2 months which has now turned many technical indicators bullish as being the new bull market move?

I don't mean to be overly critical, and I think your guys calls during 2014 were amazing (and they caused me to hold onto a good chunk of money which I then bought with in the 200s, instead of spending it all last year at higher prices, so thank you!)  But why still be bearish after the count was fulfilled and we should be in a new upmove?

Thanks

I agree. Capitulation is marked by a high-volume selloff. That's precisely what we saw in the drop to 160.

[bri912678]

DanV predicted $120 would be the lowest we go dues to some Elliot wave rule I don't understand. Chessnut's not the only one open to the possibility of further lows.

[HeliKopterBen]

Some thoughts:

Several months ago Ryan and Chessnut posted EWave charts showing a final wave V decline below the 275 October low, to <some unknown but low target level>, followed by the birth of the new bull market / next leg up. 

They were correct in their counts, and the wave 5 plunge took us from the November high all the way down to the 150-160 range depending on which exchange you look at, on Jan 13.



But for some reason, they aren't bullish now, and instead looking for wave V again?  This makes no sense to me. 

The positive divergences in MACD that Ryan predicted have occurred.  MACD is on buy signals now.  The 1D MACD gave a buy signal, then the 3D MACD gave a buy signal, then the 1W MACD gave a buy signal.  3 day moving averages just crossed over into buy territory. 

The wave structure of this bear market looks complete to me.  It looks EXACTLY like Ryan was predicting all along (really great job on that prediction, seriously!) 

So why now look for another decline back to the lows?  I can understand looking for a moderate pullback here to maybe 270, tha's perfectly reasonable (but not guaranteed), but why expect low 200s again, or even lower than that?  This seems absurd to me, and contrary to both the charts and the Bbitcoin fundamentals and recent VC funding, which look stronger than ever now.

The January bottom was a much stronger bottom than the previous ones.  The massive volume we saw at the low, the crash of over 25% within hours, it was intense, and we already retested the low 200 levels in February, and have now had a rally which has lasted MUCH longer than the failed November rally.  Why remain bearish?


Is there something about Elliotwavers that makes them so bearish all the time?  I remember looking at Robert Prechter's counts of Gold in the early to mid 200s, when he just stubbornly kept looking for a wave V down to $200 an oz, even while Gold kept rising and rising. 


There seems to be this obsession with a rally off the bottom having to exactly fit your expectations, or else it doesn't have a chance of being a new Bull market.  The rallies off of crash lows like we saw in January arent always perfect looking 5 wave moves up, but they still can be the beginning of the new move up. 

Doesn't it make more sense to stick with the count that was correct, which labeled 5 waves down culminating in the January crash, and treat the price action over the past 2 months which has now turned many technical indicators bullish as being the new bull market move?

I don't mean to be overly critical, and I think your guys calls during 2014 were amazing (and they caused me to hold onto a good chunk of money which I then bought with in the 200s, instead of spending it all last year at higher prices, so thank you!)  But why still be bearish after the count was fulfilled and we should be in a new upmove?

Thanks

The last wave down in January was a violent, panic-driven move.  They were probably looking for a grinding, shallower, more drawn out move lower, which would be more indicative of a fifth wave.  However, bitcoin trades like a commodity with a history of blowoff moves that are strongly reversed, indicative of extended fifth waves.  There is a good chance it was an extended fifth and the bear market is done.   

[chessnut]

We were counting wave V as if it were apart of a typical impulse, which seems not to be the case exactly, so an extended fifth is not really a fitting explanation. The rally from lows is without a doubt a zigzag in terms of EW. This gives us no good reason to believe we are done with the bear market in terms of EW. We are looking for validity and plausibility. Where we have good form, some things we can conclude with a high degree of probability putting our subjective feeling of what should happen aside. Im not going to count a bull market where there is no evidence for one yet only because I think Bitcoin is a great technology and people are stupid to not be buying at this price. Nobody really cares that I think so anyway! We had huge volume and panic selling, true, this is capitulation BUT the price can absolutely go lower even so. Volume comes on the third wave, not the fifth wave, and besides what we are counting could be a different beast altogether. If we bottom here for a period of many months, I have mentioned before, there is a case where we may rally towards new highs but in terms of EW we would still be bound for $100 or so after probably another year of overall sideways. Take that as you will. I think Governments have not yet fully spent their efforts to scare people off this train. We want absolute tragedy before we full our pockets.

chessnut, in terms of wave structure what do you read in the way this price is stagnating near the top of your last count (V). Is this read as an extension of the wave, or something else?

If this question is elementary, feel free to link me elsewhere


I'm assuming this is the bulls last gasp on this run, others may call it consolidation but the low volume attempt today on 300 seems to add evidence to an exhaustion of this run.

Also, the longer we stay here the longer we are (close to) butting against long term downtrend resistance, depending on how you draw and what scales used etc.

forgive me for asking questions with obvious answers: I know your current count is local, but am I right in assuming that this could be a longer term top? From your last posts, if $265/1650CNY breaks then that is more likely the scenario yes?

thanks

However the price behaves here I am expecting a retrace to around 1700. If we make fresh highs above 300 then the nature of the larger local count could change a bit, but we would still be bound for correction. Right now the bulls lack luster. I have a feeling it could slip easily any time soon, and that this will be catalysed by futures settlement tomorrow at the latest. I am watching eagerly for signs that this will be a longer term top, only in terms of months, as it would certainly be fitting.

[Odalv]

Maybe tragedy will be when bitcoin price is $4000 and you are still waiting for $100.

[chessnut]

Maybe tragedy will be when bitcoin price is $4000 and you are still waiting for $100.

It would be nice to double my capital a couple more times before that happens but I wouldnt equate it to tragedy 

[LFC_Bitcoin]

Maybe tragedy will be when bitcoin price is $4000 and you are still waiting for $100.

 

[chessnut]

Maybe tragedy will be when bitcoin price is $4000 and you are still waiting for $100.

It would be nice to double my capital a couple more times before that happens but I wouldn't equate it to tragedy 

Having said that, EW analysis is much more flexible than that. There is an alternative count where we rally towards new highs. Im not going to miss out on this if it happens, but unlike some I will be cautious with my leverage around $700.

[michaelGedi]

However the price behaves here I am expecting a retrace to around 1700. If we make fresh highs above 300 then the nature of the larger local count could change a bit, but we would still be bound for correction. Right now the bulls lack luster. I have a feeling it could slip easily any time soon, and that this will be catalysed by futures settlement tomorrow at the latest. I am watching eagerly for signs that this will be a longer term top, only in terms of months, as it would certainly be fitting.

all makes sense to me, thanks.

[RyNinDaCleM]

Reason #1-From an EW stand point, there is no way (without forcing a disproportionate and extremely lopsided count) to count the move off the 152 low as an impulse. Indicators spiked violently in that move, kicking off the first in a long line of regular/hidden bearish divergences. These divergences have grown bigger as this current move has progressed as well as added many on multiple time frames. Now it is a waiting game, imo. Remember, I am long with about 60% of my capital since that knife to the lows. But 60% is all I'm willing to risk on this rally, at this time. Things can change my mind, but these "things" are not in any danger of being broken/invalidated/nullified/equalized/neutralized.

Reason #2 (and may be more of my own peeve)-imo, there wasn't enough of a sentiment change. We were very close to that point and things were looking pretty bad, but snapped back out of it too easily because of this rally. Was it because we got so low, so fast? Possibly. There wasn't enough time to make people think we were doomed. Now, I'm not talking about our beloved resident trolls... They are expected. I mean some of the most diehards questioning their very bullishness. Wave-1 begins with a good bounce. That, we got... But wave-1 also has a lot of uncertainty. It has grown too fast in the sense of a bullish reversal. There should be a lot of questioning whether this is just a bounce but there isn't. Everyone "Knows" this is the reversal. There should be a lot of selling pressure, but there isn't, and there really isn't a lot of buying pressure either. Wave-1 should be a slow grinding rise as early bulls fight with the still skeptical and pessimistic market. 100% gains in 8 days is not a sign of a wave-1. It shows that the market did not endure enough pain and there is still too much lingering optimism.

Reason #3- I'm not convinced that what we saw in January was a capitulation proper. In the image below, you can see a dramatic long squeeze when the price fell. This tells me that it was cascading forced liquidations rather than actual despair. Sure there was panic, all lower lows receives some panic, but capitulation isn't only extremely high volume, but also people throwing in the towel. Giving up... This isn't what was reflected in the market... In this forum... the charts (except the volume).

[Morecoin Freeman]

...

I completely agree with your analysis. Pretty well done.

[intighet]

But for some reason, they aren't bullish now, and instead looking for wave V again?  This makes no sense to me.  

Is there something about Elliotwavers that makes them so bearish all the time?  I remember looking at Robert Prechter's counts of Gold in the early to mid 200s, when he just stubbornly kept looking for a wave V down to $200 an oz, even while Gold kept rising and rising.

It is interesting that you have detected this bias. I think that you have picked up on a particular bias that the use of Elliot Waves suffers greatly, that is selection bias. I avoid the models for this reason, but certainly not because they are inherently biased, in fact I consider fractal models of the price as the closest species to accessing the actual underpinning mechanisms of price fluctuation.

I have recently explored much Number Theory which suggests that the complexity of the price graph is intrinsically similar to the complexity in, as instance, the Julia Set. I am far from any formulations of proof, but I am excited that this work may some day lead to a vindication of Elliot Waves in the absence of any other empirical verifications. It seems to me that much of quantitative finance is lacking in these approaches.

[podyx]

This thread really makes me wanna sell