Best of the Week
Most Popular
1. Dollargeddon - Gold Price to Soar Above $6,000 - P_Radomski_CFA
2.Is Gold Price On Verge Of A Bottom, See For Yourself - Chris_Vermeulen
3.Dow Stock Market Trend Forecast 2018 - Nadeem_Walayat
4.Gold Price to Plunge Below $1000 - Key Factors for Gold & Silver Investors - P_Radomski_CFA
5.Why The Uranium Price Must Go Up - Richard_Mills
6.Dow Stock Market Trend Forecast 2018 - Video - Nadeem_Walayat
7.Jim Rogers on Gold, Silver, Bitcoin and Blockchain’s “Spectacular Future” - GoldCore
8.More Signs That the Stock Market Will Rally Until 2019 - Troy_Bombardia
9.It's Time for A New Economic Strategy in Turkey - Steve_H_Hanke
10.Fiat Currency Inflation, And Collapse Insurance - Raymond_Matison
Last 7 days
Gold – “Make Me Feel Good…Tell Me Anything” - 25th Sept 18
Sector Rotation Continues. Bullish for Stocks - 25th Sept 18
Whose Trillion is it Anyway? US Federal Government Shocker! - 25th Sept 18
Focus on the Stock Market’s Price Action and Ignore the Failed Hindenburg Omen - 25th Sept 18
5 Problems All Restaurant Owners Will Face - 25th Sept 18
Gold Price Trend Forecast 2018 - Video - 25th Sept 18
How the US Dollar Penalizes Emerging Asia - 24th Sep18
Stock Market Macro/Macro View: Waves and Cycles Part II - 24th Sep18
DJIA Makes New High  - 24th Sep18
Gold Price Trend Forecast 2018 - 24th Sep18
The Stock Market Has Been Exceptionally Strong this September. What’s Next for Q4 2018 - 24th Sep18
Gold / US Dollar Inverse Trend Relationship Video - 23rd Sep 18
US and Global Stocks, Commodities, Precious Metals and the ‘Anti-USD’ Trade - 23rd Sep 18
Gerald Celente Warns Fed May Bring Down the Economy, Crash Markets - 23rd Sep 18
Top 3 Side Jobs for Day Traders - 23rd Sep 18
Gold Exodus to Reverse - 22nd Sep 18
Bitcoin Trader SCAM WARNING - Peter Jones, Dragons Den Fake Facebook Ads - 22nd Sep 18
China Is Building the World’s Largest Innovation Economy - 21st Sep 18
How Can New Companies Succeed in the Overcrowded Online Gambling Market? - 21st Sep 18
Golden Sunsets in the Land of U.S. Dollar Hegemony - 20th Sep 18
5 Things to Keep in Mind When Buying a Luxury Car in Dubai - 20th Sep 18
Gold Price Seasonal Trend Analysis - Video - 20th Sep 18
The Stealth Reason Why the Stock Market Keeps On Rising - 20th Sep 18
Sheffield School Applications Crisis Eased by New Secondary Schools Places - 20th Sep 18
Precious Metals Sector: It’s 2013 All Over Again - 19th Sep 18
US Dollar Head & Shoulders Triggered. What's Next? - 19th Sep 18
Prepare for the Stock Market’s Volatility to Increase - 19th Sep 18
The Beginning of the End of the Dollar - 19th Sep 18
Land Rover Discovery Sport 'Approved Used' Bad Paint Job - Inchcape Chester - 19th Sep 18
Are Technology and FANG Stocks Bottoming? - 18th Sep 18
Predictive Trading Model Suggests Falling Stock Prices During US Elections - 18th Sep 18
Lehman Brothers Financial Collapse - Ten Years Later - 18th Sep 18
Financial Crisis Markets Reality Check Now in Progress - 18th Sep 18
Gold’s Ultimate Confirmation - 18th Sep 18
Omanization: a 20-year Process to Fight Volatile Oil Prices  - 18th Sep 18
Sheffield Best Secondary Schools Rankings and Trend Trajectory for Applications 2018 - 18th Sep 18
Gold / US Dollar Inverse Correlation - 17th Sep 18
The Apple Story - Trump Tariffs Penalize US Multinationals - 17th Sep 18
Wall Street Created Financial Crash Catastrophe Ten Years Later - 17th Sep 18
Trade Wars Are Going To Crash This Stock Market - 17th Sep 18
Why Is Apple Giving This Tiny Stock A $900 Million Opportunity? - 17th Sep 18
Financial Markets Macro/Micro View: Waves and Cycles - 17th Sep 18
Stock Market Bulls Prevail – for Now! - 17th Sep 18
GBPUSD Set to Explode Higher - 17th Sep 18
The China Threat - Global Crisis Hot Spots & Pressure Points - 17th Sep 18 - Jim_Willie_CB

Market Oracle FREE Newsletter

Trading Any Market

Bitcoin Price Is About To Bottom

Currencies / Bitcoin Sep 14, 2018 - 07:12 AM GMT

By: Avi_Gilburt

Currencies

The painful nine month bear market that began when Bitcoin topped in the mid $19,000’s is now the second longest bear market in crypto history; second in rank to one that began after the Mt. Gox sent Bitcoin down nearly 90% in 18 long months.

As is typical in a bear market, the investing public passes blame. Those trapped in the ensuing downtrend look for reasons they are losing money, as if the market owes them something. For cryptos, the opening of CME Bitcoin futures trading, which began trading shortly before the top, is the chief target. I’ve heard that it said that paper futures always ruin markets. Other targets of blame include regulation in the states and abroad, and the plethora of ‘crap’ coins on the market. The general and age old cry that the markets are manipulated also abound.


The fact is that euphoric sentiment brought this market to its knees. In fact, it was this same euphoria that led to the opening of the CME Bitcoin futures trading.

As Bitcoin launched like a moon rocket far too many believed they could get rich trading cryptos. From millennials planning to buy lamborghinis, to many retiring to trade cryptos without having traded any other asset class, these are just a couple signs of the ‘bubble’ boiling over.

Ryan Wilday, who wrote this article with me, has joked in prior articles that he no longer is asked out to lunch like he was at the top, when everyone wanted to take him out to talk about cryptos. Fortunately, Ryan was telling those folks to stop buying, and consider taking money off the table.

When we had finally confirmed the top was in, Ryan marked the $4700 region as the ideal resting spot for Bitcoin, with the possibility we see $3000. We had two strong rally attempts that put those levels in question- one in February and one in April. And, while Ryan watched them for the possibility that they reach escape velocity, they ultimately came back down through the supports he marked.

So we are now within spitting distance of this region and with a bearish setup that can take us closer to this key region. Further, we approaching completion an ABC correction, punctuated by an ending diagonal, a pattern that often brings a strong reversal.

In the chart attached, we outline an ending diagonal which started with the February high and completed as 5 waves to the spot we now find ourselves. But this final leg is not completed, and we are setting up for the final wave into the $5600-5800 region. Because Bitcoin is an asset with a tendency to extend in 5ths we may see that ideal $4700 region.

While we’d like to promise that this is the final bottom in this bear market, there are ways this market can grow more evil and complex. Mainly, this completed pattern we discuss above may only be followed by a corrective rally, a b-wave. This would suggest another larger degree decline can ensue months from now. So, as the market rallies off the low is strikes in the near term, we will track so that we can appropriately raise stops so we are not caught in a c-wave downdraft, searching for a lower low.

The euphoric sentiment mentioned above has been completely reversed and now resides in the basement. Apathetic may even be a better way to describe the sentiment amongst crypto investors and the general public, than outright bearish. While analysts that have always been skeptics of cryptos are congratulating themselves for ‘calling’ the bubble pop, those that tried their hand at investing in crypto seem to be quiet, bruised, with no plans of going back. Only small groups of die hard enthusiasts remain.

On the other hand, based on second hand information, it seems institutions have used this correction to accumulate. Word abounds of multi-million, even billion dollar purchases by banks and hedge funds. These big hands trade on the OTC market where the transactions are more stealth and not affecting price. The launch of institutional custodial services by Coinbase, the high speed crypto exchange called the San Juan Merc, and the growth of the CME and CBOE futures interest are all strong evidence that institutions are moving into the market. Will they power this market forward while the public remains apathetic and tired? We’re hitting key levels soon that will likely answer these questions.

Avi Gilburt is a widely followed Elliott Wave technical analyst and author of ElliottWaveTrader.net (www.elliottwavetrader.net), 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.

© 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