Most Popular
1. It’s a New Macro, the Gold Market Knows It, But Dead Men Walking Do Not (yet)- Gary_Tanashian
2.Stock Market Presidential Election Cycle Seasonal Trend Analysis - Nadeem_Walayat
3. Bitcoin S&P Pattern - Nadeem_Walayat
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
4.U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - Raymond_Matison
5. How to Profit from the Global Warming ClImate Change Mega Death Trend - Part1 - Nadeem_Walayat
7.Bitcoin Gravy Train Trend Forecast 2024 - - Nadeem_Walayat
8.The Bond Trade and Interest Rates - Nadeem_Walayat
9.It’s Easy to Scream Stocks Bubble! - Stephen_McBride
10.Fed’s Next Intertest Rate Move might not align with popular consensus - Richard_Mills
Last 7 days
Stock Market Brief in Count Down to US Election Result 2024 - 3rd Nov 24
Gold Stocks’ Winter Rally 2024 - 3rd Nov 24
Why Countdown to U.S. Recession is Underway - 3rd Nov 24
Stock Market Trend Forecast to Jan 2025 - 2nd Nov 24
President Donald PUMP Forecast to Win US Presidential Election 2024 - 1st Nov 24
At These Levels, Buying Silver Is Like Getting It At $5 In 2003 - 28th Oct 24
Nvidia Numero Uno Selling Shovels in the AI Gold Rush - 28th Oct 24
The Future of Online Casinos - 28th Oct 24
Panic in the Air As Stock Market Correction Delivers Deep Opps in AI Tech Stocks - 27th Oct 24
Stocks, Bitcoin, Crypto's Counting Down to President Donald Pump! - 27th Oct 24
UK Budget 2024 - What to do Before 30th Oct - Pensions and ISA's - 27th Oct 24
7 Days of Crypto Opportunities Starts NOW - 27th Oct 24
The Power Law in Venture Capital: How Visionary Investors Like Yuri Milner Have Shaped the Future - 27th Oct 24
This Points To Significantly Higher Silver Prices - 27th Oct 24
US House Prices Trend Forecast 2024 to 2026 - 11th Oct 24
US Housing Market Analysis - Immigration Drives House Prices Higher - 30th Sep 24
Stock Market October Correction - 30th Sep 24
The Folly of Tariffs and Trade Wars - 30th Sep 24
Gold: 5 principles to help you stay ahead of price turns - 30th Sep 24
The Everything Rally will Spark multi year Bull Market - 30th Sep 24
US FIXED MORTGAGES LIMITING SUPPLY - 23rd Sep 24
US Housing Market Free Equity - 23rd Sep 24
US Rate Cut FOMO In Stock Market Correction Window - 22nd Sep 24
US State Demographics - 22nd Sep 24
Gold and Silver Shine as the Fed Cuts Rates: What’s Next? - 22nd Sep 24
Stock Market Sentiment Speaks:Nothing Can Topple This Market - 22nd Sep 24
US Population Growth Rate - 17th Sep 24
Are Stocks Overheating? - 17th Sep 24
Sentiment Speaks: Silver Is At A Major Turning Point - 17th Sep 24
If The Stock Market Turn Quickly, How Bad Can Things Get? - 17th Sep 24
IMMIGRATION DRIVES HOUSE PRICES HIGHER - 12th Sep 24
Global Debt Bubble - 12th Sep 24
Gold’s Outlook CPI Data - 12th Sep 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Did the Crypto Market Just Bottom?

Currencies / BlockChain May 30, 2018 - 02:03 PM GMT

By: Ryan_Wilday

Currencies

In my recent article, "Time for a Crypto Lunar Rocket Launch?"  I stated that we have been tracking bullish 5-wave patterns off the April lows, and viewed most cryptocurrencies in wave-2 corrections or about to complete the impulse and enter wave 2s. However, some disparate coins are currently in B waves or wave iv corrections.

I also stated that some of the corrective fractals that we were beginning to see were shallow, particularly that in Ethereum. Meanwhile, I said that corrective waves are notorious for twists and turns, and for changing the views of traders and analysts alike. So, I always ground myself in a zoomed-out point of view.


By that view, we went deep — deeper than we prefer — on a few of the coins we track, but have so far stayed well above April lows in most. Yet, most coins we track are well within ideal range for a wave-2 bottom that will set us up for much higher.

I want to focus on the opportunities in Bitcoin and Ethereum, leading bellwethers for the crypto market that — at the time of writing — are quite shallow even after a horrific, impulsive drop this morning (May 24). But before I get to charts, let’s discuss sentiment.

Wave 2s are the life blood of the Elliott Wave trader, as this is the wave that washes sentiment out and sets up the third wave — which is usually the most extended wave, and often the fastest.

Paraphrasing R. N. Elliott in the 1930s, the wave-2 correction fools the crowd into believing the bear market has returned. In the case of cryptos, the “bear market” is the correction that started in late December to early January, and continued at least until the April lows.

I can say that sentiment gave us a hint that we were reaching bearish crescendo. From Twitter “whining” to those reminding everyone the bubble popped — and from stories of larger traders selling their positions to the high-volume selling we have seen between 11:30 a.m. and 1:00 p.m. EST on May 23 — it seems that crypto traders have been bloodletting.

This is the normal course for an Elliott Wave trader, focused on waves of sentiment that are reflected in mathematical price patterns. But how do we know when this bearishness has reached its limit, exhausted its fury, and given room for bulls to re-enter? First, we need to see price not push through key support.

For Ethereum, that ideal level is $495, with $430 the lowest I allow. We are still slightly shallow in Ethereum. Bitcoin ideally held $7,624 and we have a small breach. But as long as it is over $7,085, I will give this room to start a third wave.

Note there is a triangle pattern on the daily Bitcoin chart that give room into the high $6000's.

See 6-hour charts of Ethereum and Bitcoin

Next, we need to see a 5-wave move, and the probability of a bottom being in rises if prices retrace .618 of the correction. Key levels to the upside are $719 in Ethereum and $8,910 in Bitcoin. In that regard, we have work to do. But I am, as of writing, tracking a potential nano 5-wave move in both.

In the charts, these labels reflect a 5-wave pattern off these lows, which I would like to see before I can call this a bottom. Then, I would expect small retraces to set up our larger, expected third wave, which targets north of $1,800 in Ethereum and $15,000 in Bitcoin — and beyond, if there is a larger degree follow-through.

See 5- and 15-minute charts of Ethereum and Bitcoin.

Ethereum is currently holding a setup for higher at $560, while Bitcoin appears it needs to make more ‘nano wave’ lower. Yet Bitcoin is holding the larger degree support region.

In short, we have the first condition met for an important trade set-up and lasting bottom, mentioned in my article on May 10 — a deep-enough correction to wash out sentiment and stoke weak hands to sell. Now, we need to see bulls take control, and witness this in impulsive price action that takes out resistance.

And, as always markets will do what they do. If these fresh impulses break down and support eventually gives way, we must look down — even to a break below April lows, and a protracted correction. Clearly, this is an important point in time.

See the charts provided in this article in an expandable format.

Ryan Wilday is a cryptocurrency analyst at ElliottWaveTrader, where he hosts the Cryptocurrency Trading premium subscription service.

© 2018 Copyright Ryan Wilday - All Rights Reserved Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors


© 2005-2022 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in