Once the hottest bull market in history, $BTC has turned to a familiar deep corrective cycle initiated by uncertainty and fuelled by a lack of transparency, combined with seemingly a massive amount of fraudulent activity taking place.
From an analytical standpoint there is clearly a 5-subwave initial impulse down from ATH at $20k which indicates a reversal. This initial wave is visually quite impulsive, and in conjunction with it's 5-subwave count, signals that it is likely the first wave, or "A" of the 3-wave corrective cycle.
Following this we have a corrective pattern which appears to follow a 3-3-5 subwave count and running flat structure (ewmizone-kivv0apgntr...ing-flat-example.png), which I sketched between green dotted trend lines.
Subsequently, price dives below the positive sloping floor imposed by the running-flat, printing another 5-wave pattern down in which the 3 motive waves get progressively smaller, reflecting the ever decreasing volume, as well as mixing in another running-flat in a lower degree to muddle up the count.
Giancarlo Devasini is one of the registered owners of Bitfinex/iFinex/Tether and has gone on record saying that he considered pushing wash sales on his exchange to increase the appearance of volume and draw investors which is in itself illegal but is only a secondary effect of the true purpose behind manipulating the market in this way, which is ultimately to move prices as you wish in order to maximize profits and essentially win on every position. Although Devasini denies wash trading, his partner and registered owner alike, Phil Potter, has gone on record admitting that "1x hedge shorts" (a fancy term for a wash trades) were taking place on the exchange for what he assures listeners are, as he puts it "legitimate reasons".
Phil Potter Interview: www.youtube.com/watch?v=_xiXP8Hs...
Giancarlo Devasini Interview: www.youtube.com/watch?v=C59NXSaH...
Wash Trading (1x Hedge Short): en.wikipedia.org/wiki/Wash_trade
The fingerprints of this tactic have naturally been more subtle since declining from the December peak, where 10's of millions of $USDT were being printed almost daily, but are still evident. One instance is the "ABC" correction after the first wave in the C-leg of the super cycle, where the second impulse of the correction breaks far beyond the resistance imposed by the max point of the first subwave in the negative direction (area indicated by first pink box).
Following this we get a 5-wave impulse down, which is the 1st wave of the 3-wave, C-leg of the super cycle. As volume continues to die we get a long drawn out sideways correction with a second hint of market manipulation as $USDT's volatility begins to increase and $BTC exchanges such as Kraken disable USD withdrawals. As the market squeezed into what was developing to be another running flat (ish) corrective structure, a sudden spike to nearly the max retracement target of the correction at lightning speed occurs, followed by a whipsaw down (indicated by second pink box). This is called stop-hunting and I believe Bitfinex execs. took advantage of their knowledge of the order book to preform this illegal manipulation tactic.
www.marketcalls.in/t...is-stop-hunting.html
As the exodus of Bitcoins held on the Bitfinex cold wallet continues (which can be monitored here: bitinfocharts.com/bi...PJmcMDDHYoqkyNVsFk9r), we can expect nothing short of more downside and shady tactics. Shorts are currently nearing an all-time-high while longs have simultaneously hit their lowest levels since January, when the initial impulse down occurred:
photoland.io/i/25BRg9
photoland.io/i/25BOkx
$USDT volatility is also picking up in terms of flash crashes where it dropped more than 1%/min for several minutes, followed by more P&D type price action on some exchanges and 50% crashes on other exchanges.
As the C-wave of what I anticipate will turn out to be an "ABC" pattern (that should look something like this: photoland.io/i/25B7Su) plays out, developments such as the insolvency of several exchanges, CFTC investigations and regulatory news will likely have a large impact on the price action. A 5-wave, C-leg scenario has Fibonacci targets somewhere around $2400 up to $3000 in a "double bottom" scenario. I must note however that a 5th wave extension such as what happened in the $DJI from 1929-1932 is possible and could bring us as deep as ~$1150. This is indicated by the pink dotted continuation arrows.
5th Wave Extension in DOW: photoland.io/i/25BBMC
Hopefully market sentiment will not have been so damaged by the time this correction subsides that we never see record breaking bullish market activity again, however it's important to remember that with logarithmic growth comes logarithmic decline.
Stay informed and good luck trading,
Follow me here: twitter.com/ArmandBouillet
From an analytical standpoint there is clearly a 5-subwave initial impulse down from ATH at $20k which indicates a reversal. This initial wave is visually quite impulsive, and in conjunction with it's 5-subwave count, signals that it is likely the first wave, or "A" of the 3-wave corrective cycle.
Following this we have a corrective pattern which appears to follow a 3-3-5 subwave count and running flat structure (ewmizone-kivv0apgntr...ing-flat-example.png), which I sketched between green dotted trend lines.
Subsequently, price dives below the positive sloping floor imposed by the running-flat, printing another 5-wave pattern down in which the 3 motive waves get progressively smaller, reflecting the ever decreasing volume, as well as mixing in another running-flat in a lower degree to muddle up the count.
Giancarlo Devasini is one of the registered owners of Bitfinex/iFinex/Tether and has gone on record saying that he considered pushing wash sales on his exchange to increase the appearance of volume and draw investors which is in itself illegal but is only a secondary effect of the true purpose behind manipulating the market in this way, which is ultimately to move prices as you wish in order to maximize profits and essentially win on every position. Although Devasini denies wash trading, his partner and registered owner alike, Phil Potter, has gone on record admitting that "1x hedge shorts" (a fancy term for a wash trades) were taking place on the exchange for what he assures listeners are, as he puts it "legitimate reasons".
Phil Potter Interview: www.youtube.com/watch?v=_xiXP8Hs...
Giancarlo Devasini Interview: www.youtube.com/watch?v=C59NXSaH...
Wash Trading (1x Hedge Short): en.wikipedia.org/wiki/Wash_trade
The fingerprints of this tactic have naturally been more subtle since declining from the December peak, where 10's of millions of $USDT were being printed almost daily, but are still evident. One instance is the "ABC" correction after the first wave in the C-leg of the super cycle, where the second impulse of the correction breaks far beyond the resistance imposed by the max point of the first subwave in the negative direction (area indicated by first pink box).
Following this we get a 5-wave impulse down, which is the 1st wave of the 3-wave, C-leg of the super cycle. As volume continues to die we get a long drawn out sideways correction with a second hint of market manipulation as $USDT's volatility begins to increase and $BTC exchanges such as Kraken disable USD withdrawals. As the market squeezed into what was developing to be another running flat (ish) corrective structure, a sudden spike to nearly the max retracement target of the correction at lightning speed occurs, followed by a whipsaw down (indicated by second pink box). This is called stop-hunting and I believe Bitfinex execs. took advantage of their knowledge of the order book to preform this illegal manipulation tactic.
www.marketcalls.in/t...is-stop-hunting.html
As the exodus of Bitcoins held on the Bitfinex cold wallet continues (which can be monitored here: bitinfocharts.com/bi...PJmcMDDHYoqkyNVsFk9r), we can expect nothing short of more downside and shady tactics. Shorts are currently nearing an all-time-high while longs have simultaneously hit their lowest levels since January, when the initial impulse down occurred:
photoland.io/i/25BRg9
photoland.io/i/25BOkx
$USDT volatility is also picking up in terms of flash crashes where it dropped more than 1%/min for several minutes, followed by more P&D type price action on some exchanges and 50% crashes on other exchanges.
As the C-wave of what I anticipate will turn out to be an "ABC" pattern (that should look something like this: photoland.io/i/25B7Su) plays out, developments such as the insolvency of several exchanges, CFTC investigations and regulatory news will likely have a large impact on the price action. A 5-wave, C-leg scenario has Fibonacci targets somewhere around $2400 up to $3000 in a "double bottom" scenario. I must note however that a 5th wave extension such as what happened in the $DJI from 1929-1932 is possible and could bring us as deep as ~$1150. This is indicated by the pink dotted continuation arrows.
5th Wave Extension in DOW: photoland.io/i/25BBMC
Hopefully market sentiment will not have been so damaged by the time this correction subsides that we never see record breaking bullish market activity again, however it's important to remember that with logarithmic growth comes logarithmic decline.
Stay informed and good luck trading,
Follow me here: twitter.com/ArmandBouillet
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