Previously I saw a post relating to the recent crash we had. It bought to my attention the importance of repeated events in markets. Many would have seen or heard of the post showing how Chinese New Year (CNY') has the same affect on Bitcoins price, and in turn the whole market, around this time every year. Unfortunatley I can't show all 4 time periods a long side each other, but here are the stats:
2015: 23 days prior to CNY' price rapidly fell. Price dropped 35%. 37 days later price had recovered
2016: 24 days prior to CNY' price rapidly fell. Price dropped 20%. 36 days later price had recovered
2017: 22 days prior to CNY' price rapidly fell. Price dropped 37%. 42 days later price had recovered
As you can see, apart from "only" dropping 20% in 2016, the date relative to CNY', the fall of the price and the time it took the market to heal is extremely consistent. Around 3 weeks before CNY', the price will fall about 30-40% percent very quickly, before recovering back to where it was prior to the drop about 5-6 weeks later. Based on this it would be fair to say you would expect the same to happen again in 2018, and, well, it did! Let's take a look at the current CNY' effect on 2018
2018: 31 days prior to CNY' price rapidly fell. Price dropped around 36%.
Now, we can't see into the future so obviously we can't tell how long it will take to recover. However, with the info we have we can see that it is pretty consistent with the previous 3 years. The only difference would be that we experienced the drop a week earlier. However, I'm willing to put this down to the fact that those withdrawing due to CNY' were doing so earlier in hopes of cashing out before the masses did. But it appears that everyone may have been thinking the same thing.
Now there could be argument that the crash actually began a week earlier on the 7/01 from 17k. However this would mean that it was 40 days prior to CNY' that the price began to crash, and that it fell 48%. This could be the case, however it would almost double the average days prior data has shown, and it means the price would have fallen an extra 10-15%. Because of this we will use the 14k price & date as the source
With the data that we have we can begin to try and predict future movements. Based on the past 3 years, we can expect to see Bitcoins price bounce back to the level it was at before the crash (14k), in about 6-7 weeks. This gives us a date range of 27/02/2018 - 6/03/2018. Due to the hype around the entire market in mainstream media and the population in general, it would be safe to assume that it would happen sooner rather than later. If we experience a 5 wave pattern as part of the first wave of the next market cycle, then we could see the top of wave 3 hit the potential descending resistance. This would confirm the resistance as it would be the 3rd point of contact. Once we break it I see 14k as inevitable, before the next leg to a new ATH'.
If we experience a 3 wave pattern as part of a larger corrective wave, I could see the price hitting as shown on the chart. I've removed the Fib retracement levels so it isn't as cluttered, however this is the 0.618 retracement level. From here a bounce from major support on the 0.236 retracement level would be my prediction before breaking resistance and hitting 14k.
The price may fall further, or it could just blow everything out of the water. However based on historic movements, and a mix of EW theory, support/resistance and Fib levels, I can give myself a better chance of predicting where the price will go
2015: 23 days prior to CNY' price rapidly fell. Price dropped 35%. 37 days later price had recovered
2016: 24 days prior to CNY' price rapidly fell. Price dropped 20%. 36 days later price had recovered
2017: 22 days prior to CNY' price rapidly fell. Price dropped 37%. 42 days later price had recovered
As you can see, apart from "only" dropping 20% in 2016, the date relative to CNY', the fall of the price and the time it took the market to heal is extremely consistent. Around 3 weeks before CNY', the price will fall about 30-40% percent very quickly, before recovering back to where it was prior to the drop about 5-6 weeks later. Based on this it would be fair to say you would expect the same to happen again in 2018, and, well, it did! Let's take a look at the current CNY' effect on 2018
2018: 31 days prior to CNY' price rapidly fell. Price dropped around 36%.
Now, we can't see into the future so obviously we can't tell how long it will take to recover. However, with the info we have we can see that it is pretty consistent with the previous 3 years. The only difference would be that we experienced the drop a week earlier. However, I'm willing to put this down to the fact that those withdrawing due to CNY' were doing so earlier in hopes of cashing out before the masses did. But it appears that everyone may have been thinking the same thing.
Now there could be argument that the crash actually began a week earlier on the 7/01 from 17k. However this would mean that it was 40 days prior to CNY' that the price began to crash, and that it fell 48%. This could be the case, however it would almost double the average days prior data has shown, and it means the price would have fallen an extra 10-15%. Because of this we will use the 14k price & date as the source
With the data that we have we can begin to try and predict future movements. Based on the past 3 years, we can expect to see Bitcoins price bounce back to the level it was at before the crash (14k), in about 6-7 weeks. This gives us a date range of 27/02/2018 - 6/03/2018. Due to the hype around the entire market in mainstream media and the population in general, it would be safe to assume that it would happen sooner rather than later. If we experience a 5 wave pattern as part of the first wave of the next market cycle, then we could see the top of wave 3 hit the potential descending resistance. This would confirm the resistance as it would be the 3rd point of contact. Once we break it I see 14k as inevitable, before the next leg to a new ATH'.
If we experience a 3 wave pattern as part of a larger corrective wave, I could see the price hitting as shown on the chart. I've removed the Fib retracement levels so it isn't as cluttered, however this is the 0.618 retracement level. From here a bounce from major support on the 0.236 retracement level would be my prediction before breaking resistance and hitting 14k.
The price may fall further, or it could just blow everything out of the water. However based on historic movements, and a mix of EW theory, support/resistance and Fib levels, I can give myself a better chance of predicting where the price will go
Comment:
This is also relatively slow for Bitcoin if this is correct. This would be unreal news for alts if this is how it panned out. Bitcoin consolidation means money flowing into alts, at the pumps we have been seeing would only be the start of it
Comment:
Price hit the ichi cloud and rejected it, completing wave 1. It has since fallen to just under where I predicted wave 2 to fall to and bounced. I can assume that the price is going to act more severely than I predicted, so it may head to 17k instead of 14k
Comment:
Both options of ABC correction and 5 wave EW scenario are open. The price is following the 5 wave quite nicely, with a higher high and lower low than expected. Lining up almost perfectly with the ABC pattern, just a lot sooner than predicted
Comment:
Price is now sitting above the ichimoku cloud for the first time in almost 3 week. Looking like we may push for 12.7k resistance again. If above prediction is correct I'm feeling like it will push just above descending resistance before coming back to bounce from it then take off
