Best of the Week
Most Popular
1. Crude Oil and Water: How Climate Change is Threatening our Two Most Precious Commodities - Richard_Mills
2.The Potential $54 Trillion Cost Of The Fed's Planned Interest Rate Increases - Dan_Amerman
3.Best Cash ISA Savings for Rising UK Interest Rates and High Inflation - March 2018 - Nadeem_Walayat
4.Fed Interest Hikes, US Dollar, and Gold - Zeal_LLC
5.What Happens Next after February’s Stock Market Selloff - Troy_Bombardia
6.The 'Beast from the East' UK Extreme Snow Weather - Sheffield Day 2 - N_Walayat
7.Currencies Will Be ‘Flushed Down the Toilet’ Triggering a ‘Mad Rush into Gold’ - MoneyMetals
8.Significant Decline In Stocks On The Cards! -Enda_Glynn
9.Land Rover Discovery Sport Extreme Driving "Beast from the East" Snow Weather Test - N_Walayat
10.SILVER Large Specualtors Net Short Position 15 Year Anniversary - Clive_Maund
Last 7 days
A Strong Economy and Weak Stock Market is Bullish for Stocks - 22nd Mar 18
Fed Raises US Interest Rates 25bp – Where Are We In The Stock Market Cycle? - 22nd Mar 18
Why Spotify Will Likely Surge During Its IPO - 22nd Mar 18
Facebook: The Anti-Social Network Covert Data Gathering - 21st Mar 18
Additional Signs for Gold and Silver Amid Increasing FOMC Tension - 21st Mar 18
Credit Concerns In U.S. Growing As LIBOR OIS Surges to 2009 High - 21st Mar 18
Stock Markets Are Flat-to-lower Before the FOMC - 21st Mar 18
Will Powell’s Actions Pop Stock Market Perfection - 21st Mar 18
Economic Moral Hazards of the International Criminal Court - and Philippines Withdrawal - 21st Mar 18
Larry Kudlow vs. Vladimir Putin on Gold - 21st Mar 18
Trump Builds Economy and War Machine - 21st Mar 18
This Stock Market "Illusion" Can Destroy Once-Vibrant Portfolios - 21st Mar 18
Gold Short-term Pull Back in Progress - 20th Mar 18
Stocks Appear to be Under Pressure - 20th Mar 18
Time To Eliminate Your Wall Street Tax? - 20th Mar 18
The Beast from the East Snow, UK Roads Driving Car Accidents - 20th Mar 18
Can Bitcoin Price Rally Continue After Paypal Fake FUD Attack? - 19th Mar 18
2018 Reversal Dates for Gold, Silver and Gold Stocks - 19th Mar 18
This Tech Breakthrough Could Save The Electric Car Market - 19th Mar 18
Stocks Set to Open Lower, Should You Buy? - 19th Mar 18
The Wealth Machine That Rising Interest Rates Create Conflict With The National Debt - 19th Mar 18
Affiliate Marketing Tips and Network Recommendations - 19th Mar 18
Do Stocks Bull Market Tops Need Breadth Divergences? - 19th Mar 18
Doritos Instant £500 Win! Why Super Market Shelves are Empty - 19th Mar 18
Bonds, Inflation & the Market Amigos - 19th Mar 18
US Housing Real Estate Market and Banking Pressures Are Building - 19th Mar 18
Stock Market Bulls Last Stand? - 18th Mar 18
Putin Flip-Flops Like A Drunken Whore On Bitcoin Cryptocurrency Legalization - 18th Mar 18
How to Legally Manipulate Interest Rates - 18th Mar 18
Return of Stock Market Volatility Amidst Political Chaos and Uncertain Economy - 18th Mar 18
Bitcoin Price Trend Forecast, Paypal FUD Fake Cryptocurrency Warning - 17th Mar 18
Strong Earnings Growth is Bullish for Stocks - 17th Mar 18
The War on the Post Office - 17th Mar 18
GDX Gold Mining Stocks Fundamentals - 16th Mar 18
Nationalism, Not the Russians, got Trump Elected - 16th Mar 18
Has Bitcoin Bought It? - 16th Mar 18
Crude Oil Price – Who Wants the Triangle? - 16th Mar 18
PayPal Cease Trading Crypto Currency Bitcoin Warning Email Sophisticated Fake Scam? - 16th Mar 18
EUR/USD – Something Old, Something New and… Something Blue - 16th Mar 18

Market Oracle FREE Newsletter

Urgent Stock Market Message

Bitcoin, Ethereum, How To Trade Cryptos Safely

Currencies / BlockChain Oct 26, 2017 - 08:26 PM GMT

By: Avi_Gilburt


In our previous article, we briefly described, in layman’s terms, the technology underlying cryptocurrency. Then we described how to get started with your first cryptocurrency purchase. In this article we want to characterize the crypto trade so you can begin a journey toward successful trading. Cryptocurrency is a very volatile asset and perhaps the most volatile asset we have seen. We expect it to remain this way for some time.

On any given day, we might see certain cryptos move 100% or more. 10% moves in small cap coin are quite pedestrian. 3-5% daily moves in the larger coins are common. Therefore, the returns, both positive and negative, outstrip the stock market by many fold.

Furthermore, it is a market that never shuts down due to automation, as exchanges trade 24 hours a day, 7 days a week. There is nothing like waking up one morning to find out traders in another country had pushed the market more than you expected- for a gain or a loss.

Contrary to the ‘get rich quick with crypto’ talk pervading the media, we suggest that most traders put very little of their overall asset value at risk in this market.

Accelerated Pace

We also characterize the crypto market as operating on an accelerated time scale. While using our Fibonacci Pinball method works quite well through all time frames, it simply moves much faster than any other market.

To put the speed of this market in context, Coinbase founder, Fred Ehrsam, gave an interesting perspective in a recent interview. During the interview, he was asked whether cryptos were in a bubble. In response, he said he’s seen several boom and bust cycles in only his seven years in the business.

That’s right. Several boom and bust cycles in seven years.

Looking over the chart of Bitcoin, which started in 2010, we find two bear market drops of over 90%. 30% to 50% drops over a month or more have been very common.

Ryan got his feet wet trading Ether very early in its history. Within months of his first trade in early 2016 it was three multiples higher. Yet, by December 2016, it lost 60% in a six month bear market . Ryan exited his positions at the time after it broke bull market support. Ryan re-entered the market in the $7 to $10 dollar region after it presented with a new impulsive structure. It is now hovering around $300.

Through the lens of the Elliott Wave Principle we call the current rally under way in Ether the third wave, based upon our Fibonacci Pinball method. We derived the targets as shown in 1 in Fig. 1 using this method.

Fig. 1 chart of Ethereum wave 1, 2, and 3.

Let’s compare the third wave in Ethereum, still in progress, to the great bull run of the stock market. We are comparing 84 years in the S+P to just over six months in Ether. And, in that six months, as you can see, Ether has outperformed the S+P500 by many fold. This evidences the accelerated return in time, but one must realize that also means the ‘busts’ come with similar acceleration.

Fig1. S+P500 vs. Ether Equal return comparing their two time scales

How You can Succeed

Ryan learned early that the best to way to manage this volatility is to start small. He personally started with $500 and readily recommend new subscribers to our service consider a similar modest start. If you can manage the trade well, you can grow that immensely. More is not needed, but one may choose to add as they develop a comfort with the market.

Elliott Wave and CryptoCurrency

The key to trading this market well is to identify points where the market may turn. We use Elliott Wave analysis to do this in cryptos just as in any other asset.

Sentiment rules all markets and Elliott Wave is the best discerner of market sentiment I have come across. If you believe there is no fundamental value in cryptocurrencies, then you must believe that these markets are purely sentiment driven. Furthermore, the Fibonacci Pinball rules we use have worked quite well identifying support and resistance levels in cryptocurrency.

Of course, newer assets have little price history to build the most confident count, but we’re tracking many older large cap coins with very reliable counts.

Among the smaller cap coins, Ryan is seeking out the next coin that can enter a massive third wave to rival that of Ether’s and Bitcoin’s monstrous climbs. He has identified a few candidates we are tracking them in our small cap portfolio. Once the chart is ripe enough for higher confidence, we will consider writing a public article on the specific coin.


Cryptocurrency is a very volatile asset. Before one jumps in with large positions, it is better to get a feel for trading this asset. One must also understand that we will see boom and bust cycles in crypto currency just as any asset. And, finally, we use the Elliott Wave Principle to guide us through those cycles identifying key levels that can turn the market.

Next up….Is Bitcoin in a bubble?

Avi Gilburt is a widely followed Elliott Wave technical analyst and author of (, a live Trading Room featuring his intraday market analysis (including emini S&P 500, metals, oil, USD & VXX), interactive member-analyst forum, and detailed library of Elliott Wave education.

© 2017 Copyright Avi Gilburt - 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.

© 2005-2018 - 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

6 Critical Money Making Rules