Best of the Week
Most Popular
1. Next Financial Crisis Is Already Here! John Lewis 99% Profits CRASH - Retail Sector Collapse - Nadeem_Walayat
2.Why Is Apple Giving This Tiny Stock A $900 Million Opportunity? - James Burgess
3.Gold Price Trend Analysis - - Nadeem_Walayatt
4.The Beginning of the End of the Dollar - Richard_Mills
5.Stock Market Trend Forecast Update - - Nadeem_Walayat
6.Hindenburg Omen & Consumer Confidence: More Signs of Stock Market Trouble in 2019 - Troy_Bombardia
7.Precious Metals Sector: It’s 2013 All Over Again - P_Radomski_CFA
8.Central Banks Have Gone Rogue, Putting Us All at Risk - Ellen_Brown
9.Gold Stocks Forced Capitulation - Zeal_LLC
10.The Post Bubble Market Contraction Thesis Receives Validation - Plunger
Last 7 days
Technical Analysis Points to DOW 30k Next Target - 19th Nov 18
Stock Market Consolidating in a Downtrend  - 19th Nov 18
Next Tory Leader, Prime Minister Forecast and Betting Market Odds - 18th Nov 18
The Fed's Misleading Money Supply Measures - 17th Nov 18
Stock Market Outlook: Why the Economy is Bullish for Stocks Going into 2019 - 17th Nov 18
NO DEAL HARD BrExit Tory Chaos, Theresa May Leadership Challenge - 17th Nov 18
Gold vs Several Key Investments - 17th Nov 18
GDX Gold Mining Stocks Q3 18 Fundamentals - 17th Nov 18
Is Gold Under or Overpriced? - 17th Nov 18
Active Managers are Bearish on Stocks. A Bullish Contrarian Sign - 16th Nov 18
Will The Fed Sacrifice Retirement Portfolio Values For The "Common Good"? - 16th Nov 18
BrExit War - Tory Party About to Replace Theresa May for NO DEAL BrExit - 16th Nov 18
Aspire Global Makes Significant Financial Strides - 16th Nov 18
Gold Oil and Commodities …Back to the Future ? - 16th Nov 18
Will Oil Price Crash Lead to “Contagion” for the U.S. Stock Market? - 15th Nov 18
How NOT to Be Among the MANY Stock Investors Fooled by This Market Myth - 15th Nov 18
Tory BrExit Chaos Cripples UK Economy, Wrecks Housing Market Confidence - 15th Nov 18
Stocks Could End 2018 With A Dramatic Rally - 15th Nov 18
What Could Be the Last Nail in This Stock Bull Markets Coffin - 15th Nov 18
Defensive Stock Sectors Outperforming, Just Like During the Dot-com Bubble - 15th Nov 18
Buying Your First Home? Here’s How to Save Money - 15th Nov 18
US Economy Ten Points or Ten Miles to ‘Bridge Out’? - 14th Nov 18
US Stocks: Whither from Here? - 14th Nov 18
Know exactly when to Enter&Exit trades using this... - 14th Nov 18
Understanding the Benefits of Keeping a Trading Journal - 14th Nov 18
S&P 500 Below 2,800 Again, New Downtrend or Just Correction? - 13th Nov 18
Warning: Precious Metals’ Gold and Silver Prices are about to Collapse! - 13th Nov 18
Why the End of the Longest Crude Oil Bull Market Since 2008? - 13th Nov 18
Stock Market Counter-trend Rally Reaches .618 Retracement - 13th Nov 18
How to Create the Best Website Content and Generate Organic Traffic - 13th Nov 18
Why the Stock Market Will Pullback, Rally, and Roll Into a Bear Market - 13th Nov 18
Stock Markets Around the World are Crashing. What Not to Worry About? - 12th Nov 18
Cyclical Commodities Continue to Weaken, Gold Moves in Relation - 12th Nov 18
Olympus Tough TG-5 Camera Stuck or Dead Pixels, Rubbish Video Auto Focus - 12th Nov 18
5 Things That Precede Gold Price Major Bottoms - 12th Nov 18
Big US Stocks Q3 Fundamentals - 12th Nov 18
How "Free Money" Helped Create Sizzling Housing Market & REIT Gains - 12th Nov 18
One Direction More Likely for Bitcoin Price - 12th Nov 18
The Place of HSE Software in Today's Business - 12th Nov 18

Market Oracle FREE Newsletter

Free Online Trading Session

Ethereum & Bitcoin: First Sign of Unravelling Cryptos

Currencies / Bitcoin Jun 18, 2018 - 02:10 PM GMT

By: Ryan_Wilday

Currencies

In articles starting in April I discussed the bullish impulse we had seen off the April lows for nearly every coin I track. And, I discussed how the lows on May 28 were testing levels that, if broken, threatened the continuation of that impulse.

Unfortunately, as of writing, those levels have broken. These levels were $7075 in bitcoin (BTC-USD) and $505 in ethereum (ETH-USD). And, while we have a few outliers in the cryptocurrency, most coins are following suit.


Is all lost?

While this can seem disastrous, especially for those with large holdings, I still believe we'll see long-term support hold. In fact, most markets push bullish levels to the limit before bottoming, and I've seen it time and time again in the crypto market. This may be one of those times. But we must see.

In very early articles, my talks at the TradersExpo, and in an ebook I wrote for the Money Show, I stated that $3000 was a key level for my long term perspective in bitcoin. And, $4700 was an ideal resting spot. So, in some regard this unraveling is not a surprise. However, since February, bitcoin has thwarted every opportunity to reach those lower levels.

Will this finally be the time?

If we do reach those levels, those interested in starting a cryptocurrency portfolio should have one of the best opportunities to start. Those with portfolios already will have a key place to add for the long-term. So, I don't perceive that all is lost with this drop that should last a few weeks or more.

But will anyone be interested? As we know, markets bottom with the destruction of all bullish sentiment, particularly in rank and file investors. I already consider sentiment in the crypto market to range from all out bearish to apathetic. Certainly $4700 or below will stoke the flames of fear to new levels.

Now, I must offer a warning about the levels we likely are to see.

If bitcoin does not hold $3000, it will open the door to our December being the top of its primary third wave, and the primary fourth from there, can go down as far as the $200s, if $2000 is breached. I'll develop more precise analysis for that fourth wave if we cross $3000.

If ethereum does not hold $133, or at least close, I have to consider that its entire history is a failed impulse to this date. This means we will not likely see my current target of $6900 and my ability to suggest what it will do in the future will be limited. I will call its top a three wave top, failing a full five wave impulse. And, when that happens, targeting its next move will be difficult.
Is there a bullish case?

Markets can always turn when you least expect. My method is based on the studies Avi Gilburt has done with the Elliott Wave Theory and I now apply that work to cryptocurrency. That work suggests the proportions of one wave to another at any given time, but this work helps us find probable paths, not certain paths. So, I have to still find levels where my bearish call is invalidated.

Currently, if ethereum retakes $630 and bitcoin $7700, I will have to consider upward resolution more seriously. Until then, I'll be looking down. However, I'll look down at the long-term opportunity it will create.

In conclusion, we have a local breakdown that is likely to bring us into long-term support areas, or a little above. While in the short term this will be very painful for current investors, it may offer a long-term opportunity for long-term holders to add, and those on the sidelines to get in.

See all charts illustrating our wave counts on Bitcoin and Ethereum.

Ryan Wilday is a cryptocurrency analyst at ElliottWaveTrader.net, 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.


© 2005-2018 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