Bitcoin, Macro Update

According to Harmonic Elliott Wave theory, any rally that manages to drive prices for a significant distance is structured as five waves. Waves 1, 3 and 5 are impulsive waves pushing prices to new highs in direction of the trend. Waves 2 and 4 are counter trend moves, just temporary interruptions in the trend. The wave 3 is almost always the most powerful segment of the rally. Once bulls get exhausted, time comes for a corrective wave 4 down whose goal is to cool down bulls. Wave 4 lasts as long as needed to make majority of bulls forget about the breathtaking rally in wave 3 and prepare a base for continuation of the rally to new highs in wave 5.

I am convinced that the top Bitcoin made in December 2017 at $19,796 was a top of wave 3. And since then it has been in a corrective decline of wave 4 down.

That corrective wave 4 down should be subdivided into three large waves A-B-C. The first wave A down bottomed at 10,700 on December 22nd, 2017.

Wave B up followed and topped at $17,252 on January 6th, 2018. And since then Bitcoin has been working on the final wave C down that should complete the whole correction in wave 4 down and give birth to a rally that will reach new all time high.

We know that wave C of corrective A-B-C fractals always subdivided in five smaller waves. Wave ( i ) down found a bottom at $12,639 on January 11th, 2018. Wave ( ii ) up topped at $14,580 on January 13th, 2018. Please note that the top of wave ( ii ) of C is significantly lower than the previous major top made by corrective wave B up at $17,252.

Once wave ( ii )  topped the most powerful part of decline in wave ( iii ) of C started. That wave ( iii ) down managed to push prices to a new lower low at $6,000 on February 6th, 2018. Please note that low was considerably lower than the low made by the first leg of decline in the wave A down that bottomed at $10,700 in December, 2017.

Since then Bitcoin price has been coiling. What it means is that every new move was shorter than the previous one. And this is what happens in a corrective pattern called “Triangle”.

With each new move shorter than the previous one more more traders get frustrated and move to sidelines. The volume of trading drops. That market does not let make money making bets either way. And this pattern is just a temporary pause before the final decline in wave ( v ) down to new lower lows. Once that move down finds its bottom it will complete the final wave C down which in its turn will complete even larger corrective wave 4 down.

Bitcoin daily, updated 10/28/2018

At this point the main question is what the potential target for the final decline in wave (c) of (v ) of C of [4]?

And here we should calculate potential projections to come up with confluence of targets. Projections of the larger Wave A of 4 give two targets: $4,432 and $4,136.

Projections of the Wave (i) of C of 4 give two targets: $5,284 and $4,193. Finally, projections of wave (a) of (v) suggest two targets: $4,494 and $4,106.

As we can see, we have a very strong confluence of potential targets for the final move down in the area of $4,193-$4,106.

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