Best of the Week
Most Popular
1. Will Gold Price Breakout? 3 Things to Watch… - Jordan_Roy_Byrne
2.China Invades Saudi Oil Realm: PetroDollar Kill - Jim_Willie_CB
3.Bitcoin Price Trend Forecast, Paypal FUD Fake Cryptocurrency Warning - Nadeem_Walayat
4.The Stock Market Trend is Your Friend ’til the Very End - Rambus_Chartology
5.This Isn’t Your Grandfather’s (1960s) Inflation Scare - F_F_Wiley
6.GDX Gold Mining Stocks Fundamentals - Zeal_LLC
7.US Housing Real Estate Market and Banking Pressures Are Building - Chris_Vermeulen
8.Return of Stock Market Volatility Amidst Political Chaos and Uncertain Economy - Buildadv
9.Can Bitcoin Price Rally Continue After Paypal Fake FUD Attack? - Nadeem_Walayat
10.Warning Economic Implosion on the Horizon - Chris_Vermeulen
Last 7 days
Russia Buys 300,000 Ounces Of Gold In March – Nears 2,000 Tons In Gold Reserves - 24th Apr 18
Stock Market Study Shows Why You Shouldn’t “Sell in May and Go Away” - 24th Apr 18
CRYPTOCURRENCY MASTERCLASS #CRY90 - 24th Apr 18
UKGC Set to Make Online Gambling Industry More Risk-Free - 24th Apr 18
Chaos Capitalists Short Countries - How Chanos Got China Wrong - 24th Apr
Artificial Intelligence Defines the Political News Narrative - 24th Apr 18
Stock Market "Oops, They Did It Again" - 24th Apr 18
Fox in the Henhouse: Why Interest Rates Are Rising - 23rd Apr 18
Stocks and Bonds, This is Not a Market - 23rd Apr 18
Happy Anniversary Silver Investors! - 23rd Apr 18
The Hottest Commodity Play In 2018 - 23rd Apr 18
Stock Market Correction Turns Consolidation - 23rd Apr 18
Silver Squeeze, Gold Fails & GDX Breadth - 23rd Apr 18
US Economy Is Cooked, the Growth Cycle has Peaked - 23rd Apr 18
Inflation, With a Shelf Life - 23rd Apr 18 - Gary_Tanashian
Stock Market Predictive Modeling Is Calling For A Continued Rally - 22nd Apr 18
SWEATCOIN - Get PAID to WALK! Incentive to Burn Fat and Lose Weight - Review - 22nd Apr 18
Sheffield Local Elections 2018 Forecast Results - 22nd Apr 18
How Long Does it take for a 10%+ Stock Market Correction to Make New Highs - 21st Apr 18
Sheffield Ruling Labour Party Could Lose 10 Council Seats at May Local Elections - 21st Apr 18
Crude Oil Price Trend Forecast - Saudi Arabia $80 ARAMCO Stock IPO Target - 21st Apr 18
Gold Price Nearing Bull Market Breakout, Stocks to Follow - 20th Apr 18
What’s Bitcoin Really Worth? - 20th Apr 18
Stock Market May "Let Go" - 20th Apr 18
Overwhelming Evidence Against Near Stock Market Grand Supercycle Top - 20th Apr 18
Crude Oil Price Trend Forecast - Saudi's Want $100 for ARAMCO Stock IPO - 20th Apr 18
The Incredible Silver Trade – What You Need to Know - 20th Apr 18
Is War "Hell" for the Stock Market? - 19th Apr 18
Palladium Bullion Surges 17% In 9 Days On Russian Supply Concerns - 19th Apr 18
Breadth Study Suggests that Stock Market Bottom is Already In - 19th Apr 18
Allegory Regarding Investment Decisions Made On Basis Of Government’s Income Statement, Balance Sheet - 19th Apr 18
Gold – A Unique Repeat of the 2007 and How to Profit - 19th Apr 18
Abbeydale Park Rise Cherry Tree's in Blossom - Sheffield Street Tree Protests - 19th Apr 18
The Stock Market “Turn of the Month Effect” Exists in 11 of 11 Countries - 18th Apr 18
Winter is Coming - Coming Storms Will Bring Out the Best and Worst in Humanity - 18th Apr 18
What Does it Take to Create Living Wage Jobs? - 18th Apr 18
Gold and Silver Buy Signals - 18th Apr 18
WINTER IS COMING - The Ongoing Fourth Turning Crisis Part2 - 18th Apr 18
A Stock Market Rally on Low Volume is NOT Bearish - 17th Apr 18
Three Gold Charts, One Big Gold Stocks Opportunity - 17th Apr 18
Crude Oil Price As Bullish as it Seems? - 17th Apr 18
A Good Time to Buy Facebook? - 17th Apr 18
THE Financial Crisis Acronym of 2008 is Sounding Another Alarm - 16th Apr 18
Bombs, Missiles and War – What to Expect Next from the Stock Market - 16th Apr 18
Global Debt Bubble Hits New All Time High – One Quadrillion Reasons To Buy Gold - 16th Apr 18
Will Bitcoin Ever Recover? - 16th Apr 18
Stock Market Futures Bounce, But Stopped at Trendline - 16th Apr 18
How To Profit As Oil Prices Explode - 16th Apr 18
Junior Mining Stocks are Close to Breaking Downtrend - 16th Apr 18
Look Inside a Caravan at UK Holiday Park for Summer 2018 - Hoseasons Cayton Bay Sea Side - 16th Apr 18
Stock Market More Weakness? How Much? - 15th Apr 18
Time for the Gold Bulls to Show their Mettle - 15th Apr 18
Trading Markets Amid Sound of Wars - 15th Apr 18
Sugar Commodity Buying Levels Analysis - 14th Apr 18
The Oil Trade May Be Coming Alive - 14th Apr 18

Market Oracle FREE Newsletter

Trading Lessons

Bitcoin, Verge, Ethereum and Ripple - The Crypto Market Conundrum

Currencies / Bitcoin Mar 20, 2018 - 04:27 PM GMT

By: Avi_Gilburt

Currencies

By Ryan Wilday : In my last article I stated that we had the potential for a lasting bottom in the crypto market, starting with a low in most coins on February 6th. However, in that article I also gave the conditions for that bottom to fail.

Those conditions, unfortunately, became reality. We have since seen both Ether and Verge, highlighted in that article, slide to new lows below the February 6th low. Bitcoin and Ripple did not fall below their February 6th levels, but did confirm the unlikelihood of that low marking the beginning of an impulsive wave.


In the process, Ripple is largely acting as expected.

As stated, we believe Ripple has seen a major top. Bitcoin, on the other hand, is now signalling a more complex correction than our previous expectations, and eventually it should see a new low below that of February 6th.

The conundrum that we now face is that many of the alt coins we watch have hit major support on this fresh decline. If they do not hold here, at the local bottom hit just yesterday, they will be signalling a much larger decline. Yet Bitcoin remains well above bull market support at $3500, and is signalling that it may attempt to take out the February 6th low at a later date.

As crypto traders know, most small-cap coins are dragged down by Bitcoin during bearish waves. Should we then expect lower lows in small-cap coins later, when Bitcoin comes down in a C wave? If so, this will destroy the bull runs of many of our small-cap coins.

In our view we have three scenarios in front of us:

First, we have a decoupling between most alt coins and Bitcoin for now, where Bitcoin moves to lower lows, while alt coins start a bullish run. Or, most of the alt coins we follow, both small and large cap, we see an end to their bull runs or a higher degree correction, and our future targets are adjusted down. Or, finally Bitcoin has seen its low, but in a nonstandard structure. We’ll discuss this near the end of the article.

Taking a closer look at Bitcoin, you may recall that in my last article I also said this:

“If we see a 5 wave pattern [down] out of this zone and break $9840 strong, we’ll kill our entire new position and will assume we will see a lower correction.”

This is precisely what we have seen, and so we see the impulse that we hoped had started on February 6th fail and remain corrective.

So what's next? At the time of writing we have the potential of a local bottom. It is our belief that this local bottom is the c of b of a larger B wave in this correction. This is the best explanation for what we have now, with three waves up and three waves down. We now expect a five wave C wave to complete this larger B wave. We have little confidence that we will see Bitcoin push higher than $18,775 before a larger C wave down takes hold. If the price moves over $18,775, then we’ll reconsider our thesis.

In my last article, I said that I expected Ripple to take a direct run to the B wave top. Instead it failed after the 1-2 setup of C and took a detour. As shown in the chart below, we believe we have completed c of a lower b of B. This structure is much like our pattern in Bitcoin above. A reminder: We have a possible target of 20 cents for Ripple after the B wave top completes.

The structure in Ethereum is quite different, as it broke to new lows below those of February 6th. Further, it moved directly into support for our 4th wave of primary three, targeting $3560. Therefore, it is my opinion that if this area doesn’t hold, I must reevaluate my long-term count, and targets. I have attached both the hourly and daily charts with notes, so this is clear.

Verge is very similar. It came directly into long-term support in a very complex pattern that Ellioticians call the WXYXZ. The good news is that such a complex pattern usually signals the completion of a correction. The bad news is that as with Ethereum, we are barely hanging on to long-term support. If we don’t see a strong rally out of this zone, I will likewise need to reevaluate future targets.

The question in my mind now is how Bitcoin, our bellwether, can be set up for further lows in this correction, while Ethereum and Verge, along with many other coins, small and large cap, appear to have stretched into major lows that should hold. Will those new lows fail further, or might Bitcoin have something surprising hidden under the hood?

Since the move off the February 6th low in Bitcoin is best described now as three waves, we can say an impulse is unlikely. But there are two alternate possibilities that would hold the February 6th low: a triangle and a leading diagonal, both of which can begin with three waves up.

The triangle involves 5 waves sideways, each of them subdivided by three waves. From this viewpoint, the bottom is in, but the correction will stretch out in time. See the attached chart of a possible triangle structure.

The leading diagonal is also made of five waves with each possibly subdivided as three waves. But instead of moving sideways it slowly grinds a northward course, a bit slower than an impulsive structure, before completing the first wave up. Diagonals also have deeper corrective waves than a standard impulse, requiring more patience in holding on to one’s position. See the attached chart.

In conclusion, we are making yet another attempt at a bottom here. Yet we now have less confidence that this will be the end of the correction, given the structure of Bitcoin and the fact that some of our small-cap and large-cap coins other than Bitcoin are now testing major support levels. I’ll check in again soon, after we have more action, to see if the view is made more clear.

See charts illustrating the wave counts on Bitcoin, Verge, Ethereum and Ripple.  

Ryan Wilday is an analyst covering cryptocurrencies at ElliottWaveTrader.net.  He has over 17 years experience trading equities, futures and options. He began trading cryptocurrencies in 2013, and today he melds his deep knowledge of the cryptocurrency market with Elliott Wave theory and Fibonacci Pinball.

© 2018 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 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

6 Critical Money Making Rules