2018 Cryptocurrency Crash (Elliott Wave): Triangle Phinance
From 17-DEC-2017 to 06-FEB-2018, the Bitcoin market declined 70% in just 50 days. This decline has been the first leg of the cryptocurrency bear market.
Since the low set on 06-FEB-2018, the Bitcoin market has meandered sideways for over 100 days thus far. Price action appears to be contracting into a symmetrical triangle formation with diminishing volume and volatility. Bitcoin is behaving like a boring stable currency!
Once the symmetrical triangle completes, the second leg, and most devastating leg, of the cryptocurrency bear market is expected to resume with a breakout in volume and volatility.
A triangle formation reflects a balance of forces creating a sideways movement; an equilibrium and indecisive psychological state of mind between the bulls & bears, creating a period of consolidation as the market deliberates its next move.
Five waves are expected in a contracting symmetrical triangle pattern, labelled as a-b-c-d-e waves.
Under textbook Elliott Wave analysis, at least two of the five alternate waves are typically related to each other by the Fibonacci 0.618 golden ratio:
i.imgur.com/J8Mf4X3.png
—wave-a: Rallied 95% from 06-FEB to 05-MAR, retracing a 50% Fibonacci of the downtrend wave that began on 06-JAN.
—wave-b: Declined 45% from 05-MAR to 01-APR, retracing a 95% of wave-a.
—wave-c: ‘April Fools Rally’: Rallied 55% from 01-APR to 05-MAY. In regards to length, it was a Fibonacci 0.618% of wave-a and terminated just shy of the psychological 10,000 level.
—wave-d: ‘Sell In May And Go Away’: Declined 30% thus far from 05-MAY to present. Should wave-d equal a Fibonacci 0.618% of wave-b, it would do so at around 6675 (BITFINEX) —and converging trendlines of the triangle suggest by early JUN. This wave-d must terminate above wave-b for the symmetrical triangle to remain valid; i.e. above the APR low of 6425 (BITFINEX).
—wave-e: The final leg of the contracting symmetrical triangle pattern, and the shortest. Should wave-e equal a Fibonacci 0.618% of wave-c, it would do so at around 8875 (BITFINEX) —and converging trendlines of the triangle suggest by mid JUN. It is common for this final wave-e of a symmetrical triangle to either undershoot or overshoot. However, this wave-e must terminate below wave-c for the overall symmetrical triangle to remain valid; i.e. below the MAY high of 9990 (BITFINEX). Incidentally, CBOE Bitcoin futures expire on 13-JUN. Also, 16-JUN would mark 100 days since price last traded at the psychological 10,000 level.
Upon completion of contracting symmetrical triangle pattern, the bear market is expected to resume towards 4257 (BITFINEX) which marks a Fibonacci 78.6% retracement of the entire Bitcoin market.
Historically, when any asset bubble bursts, the unravelling bear market typically lasts 2 years on average (from peak price to ultimate low); and usually erases approx 90% in value (thebubblebubble.com/historic-crashes).
Applying the metrics to the cryptocurrency bubble, it would suggest Bitcoin between $850 and $2500 (or $1000 on average) around 3Q2019.
Speculative and guesswork Elliott Wave model indicative of price and structure not time, as follows:
BTC (4hr): i.imgur.com/8Y7PkhS.png
BTC (Weekly): i.imgur.com/jbcZG5o.png
BTC (Daily): i.imgur.com/K4Nuj1n.png
From 17-DEC-2017 to 06-FEB-2018, the Bitcoin market declined 70% in just 50 days. This decline has been the first leg of the cryptocurrency bear market.
Since the low set on 06-FEB-2018, the Bitcoin market has meandered sideways for over 100 days thus far. Price action appears to be contracting into a symmetrical triangle formation with diminishing volume and volatility. Bitcoin is behaving like a boring stable currency!
Once the symmetrical triangle completes, the second leg, and most devastating leg, of the cryptocurrency bear market is expected to resume with a breakout in volume and volatility.
A triangle formation reflects a balance of forces creating a sideways movement; an equilibrium and indecisive psychological state of mind between the bulls & bears, creating a period of consolidation as the market deliberates its next move.
Five waves are expected in a contracting symmetrical triangle pattern, labelled as a-b-c-d-e waves.
Under textbook Elliott Wave analysis, at least two of the five alternate waves are typically related to each other by the Fibonacci 0.618 golden ratio:
i.imgur.com/J8Mf4X3.png
—wave-a: Rallied 95% from 06-FEB to 05-MAR, retracing a 50% Fibonacci of the downtrend wave that began on 06-JAN.
—wave-b: Declined 45% from 05-MAR to 01-APR, retracing a 95% of wave-a.
—wave-c: ‘April Fools Rally’: Rallied 55% from 01-APR to 05-MAY. In regards to length, it was a Fibonacci 0.618% of wave-a and terminated just shy of the psychological 10,000 level.
—wave-d: ‘Sell In May And Go Away’: Declined 30% thus far from 05-MAY to present. Should wave-d equal a Fibonacci 0.618% of wave-b, it would do so at around 6675 (BITFINEX) —and converging trendlines of the triangle suggest by early JUN. This wave-d must terminate above wave-b for the symmetrical triangle to remain valid; i.e. above the APR low of 6425 (BITFINEX).
—wave-e: The final leg of the contracting symmetrical triangle pattern, and the shortest. Should wave-e equal a Fibonacci 0.618% of wave-c, it would do so at around 8875 (BITFINEX) —and converging trendlines of the triangle suggest by mid JUN. It is common for this final wave-e of a symmetrical triangle to either undershoot or overshoot. However, this wave-e must terminate below wave-c for the overall symmetrical triangle to remain valid; i.e. below the MAY high of 9990 (BITFINEX). Incidentally, CBOE Bitcoin futures expire on 13-JUN. Also, 16-JUN would mark 100 days since price last traded at the psychological 10,000 level.
Upon completion of contracting symmetrical triangle pattern, the bear market is expected to resume towards 4257 (BITFINEX) which marks a Fibonacci 78.6% retracement of the entire Bitcoin market.
Historically, when any asset bubble bursts, the unravelling bear market typically lasts 2 years on average (from peak price to ultimate low); and usually erases approx 90% in value (thebubblebubble.com/historic-crashes).
Applying the metrics to the cryptocurrency bubble, it would suggest Bitcoin between $850 and $2500 (or $1000 on average) around 3Q2019.
Speculative and guesswork Elliott Wave model indicative of price and structure not time, as follows:
BTC (4hr): i.imgur.com/8Y7PkhS.png
BTC (Weekly): i.imgur.com/jbcZG5o.png
BTC (Daily): i.imgur.com/K4Nuj1n.png