Best of the Week
Most Popular
1. 2019 From A Fourth Turning Perspective - James_Quinn
2.Beware the Young Stocks Bear Market! - Zeal_LLC
3.Safe Havens are Surging. What this Means for Stocks 2019 - Troy_Bombardia
4.Most Popular Financial Markets Analysis of 2018 - Trump and BrExit Chaos Dominate - Nadeem_Walayat
5.January 2019 Financial Markets Analysis and Forecasts - Nadeem_Walayat
6.Silver Price Trend Analysis 2019 - Nadeem_Walayat
7.Why 90% of Traders Lose - Nadeem_Walayat
8.What to do With Your Money in a Stocks Bear Market - Stephen_McBride
9.Stock Market What to Expect in the First 3~5 Months of 2019 - Chris_Vermeulen
10.China, Global Economy has Tipped over: The Surging Dollar and the Rallying Yen - FXCOT
Last 7 days
The Corporate Debt Bubble Is Strikingly Similar to the Subprime Mortgage Bubble - 18th Feb 19
Stacking The Next QE On Top Of A $4 Trillion Fed Floor - 18th Feb 19
Get ready for the Stock Market Breakout Pattern Setup II - 18th Feb 19
It's Blue Skies For The Stock Market As Far As The Eye Can See - 18th Feb 19
Stock Market Correction is Due - 18th Feb 19
Iran's Death Spiral -- 40 Years And Counting - 17 Feb 19
Venezuela's Opposition Is Playing With Fire - 17 Feb 19
Fed Chairman Deceives; Precious Metals Mine Supply Threatened - 17 Feb 19
After 8 Terrific Weeks for Stocks, What’s Next? - 16th Feb 19
My Favorite Real Estate Strategies: Rent to Live, Buy to Rent - 16th Feb 19
Schumer & Sanders Want One Thing: Your Money - 16th Feb 19
What Could Happen When the Stock Markets Correct Next - 16th Feb 19
Bitcoin Your Best Opportunity Outside of Stocks - 16th Feb 19
Olympus TG-5 Tough Camera Under SEA Water Test - 16th Feb 19
"Mi Amigo" Sheffield Bomber Crash Memorial Site Fly-past on 22nd February 2019 VR360 - 16th Feb 19
Plunging Inventories have Zinc Bulls Ready to Run - 15th Feb 19
Gold Stocks Mega Mergers Are Bad for Shareholders - 15th Feb 19
Retail Sales Crash! It’s 2008 All Over Again for Stock Market and Economy! - 15th Feb 19
Is Gold Market 2019 Like 2016? - 15th Feb 19
Virgin Media's Increasingly Unreliable Broadband Service - 15th Feb 19
2019 Starting to Shine But is it a Long Con for Stock Investors? - 15th Feb 19
Gold is on the Verge of a Bull-run and Here's Why - 15th Feb 19
Will Stock Market 2019 be like 1999? - 14th Feb 19
3 Charts That Scream “Don’t Buy Stocks” - 14th Feb 19
Capitalism Isn’t Bad, It’s Just Broken - 14th Feb 19
How To Find High-Yield Dividend Stocks That Are Safe - 14th Feb 19
Strategy Session - How This Stocks Bear Market Fits in With Markets of the Past - 14th Feb 19
Marijuana Stocks Ready for Another Massive Rally? - 14th Feb 19
Wage Day Advance And Why There is No Shame About It - 14th Feb 19
Will 2019 be the Year of the Big Breakout for Gold? - 13th Feb 19
Earth Overshoot Day Illustrates We are the Lemmings - 13th Feb 19
A Stock Market Rally With No Pullbacks. What’s Next for Stocks - 13th Feb 19
Where Is Gold’s Rally in Response to USD Weakness? - 13th Feb 19

Market Oracle FREE Newsletter

The Real Secret for Successful Trading

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.


© 2005-2019 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