Bitcoin Elliot Wave Theory
Updated
Someone wrote and I replied:
> “EW theory dont show this will move to 8k this year. Maybe this price after the 200k price top out not sure”
I claim that the ‘3’ should be labeled ‘1’ in this current cycle because EW theory requires that wave ‘2’ does not typically decline more than 61.8% of wave ‘1’. Also because you can see the prior two bull cycles put the wave ‘1’ top on the second peak from the bottom, not the first.
Presumably the person who labeled that chart didn’t want to put the ‘1’ where the ‘3’ is labeled because that was a new ATH whereas on prior bull cycles the ‘1’ was not ATH. But EW theory does not require that ‘1’ not be a new ATH.
We do not know if ‘4’ (which I claim should be labeled ‘2’) is the lowest value of ‘2’ until a new ATH is reached. It’s possible that ‘4’ should be labeled ‘a’.
Even if a new ATH is reached, it’s not assured that EW theory will be valid.
> “Yes just a theory […] l time is running out […] so lagging behind schedule”
PlanB models only two prior bull cycles which is statistically insufficient for establishing an certainty about likelihood of repetition of the timing of the cryptowinter and peak ATH that precedes it. Could be slower this cycle. The important point may be that the average price or final peak price is above his stock-to-flow model price at some point in the future, not necessarily with any certain timing.
Here’s what this chart looked like with the candle wicks clearly visible:
Suggest reading all my recent comment replies on my prior Tradingview published ideas for more details and insight into my reasoning.
> “EW theory dont show this will move to 8k this year. Maybe this price after the 200k price top out not sure”
I claim that the ‘3’ should be labeled ‘1’ in this current cycle because EW theory requires that wave ‘2’ does not typically decline more than 61.8% of wave ‘1’. Also because you can see the prior two bull cycles put the wave ‘1’ top on the second peak from the bottom, not the first.
Presumably the person who labeled that chart didn’t want to put the ‘1’ where the ‘3’ is labeled because that was a new ATH whereas on prior bull cycles the ‘1’ was not ATH. But EW theory does not require that ‘1’ not be a new ATH.
We do not know if ‘4’ (which I claim should be labeled ‘2’) is the lowest value of ‘2’ until a new ATH is reached. It’s possible that ‘4’ should be labeled ‘a’.
Even if a new ATH is reached, it’s not assured that EW theory will be valid.
> “Yes just a theory […] l time is running out […] so lagging behind schedule”
PlanB models only two prior bull cycles which is statistically insufficient for establishing an certainty about likelihood of repetition of the timing of the cryptowinter and peak ATH that precedes it. Could be slower this cycle. The important point may be that the average price or final peak price is above his stock-to-flow model price at some point in the future, not necessarily with any certain timing.
Here’s what this chart looked like with the candle wicks clearly visible:
Suggest reading all my recent comment replies on my prior Tradingview published ideas for more details and insight into my reasoning.
Note
Following cited resource on Elliot Wave theory indicates that either wave (̶4̶)̶ must drop to at least the top of wave (̶2̶)̶ (as labeled on my chart), or wave 2 (as labled on my chart) can still drop to as much as 99% of price rise from wave c.Thus my posited potential drop below 26k (i.e. 61.8% Fibonacci retracement) or even to as low as my posited $8 – 18k is still plausible until a new ATH is formed. C.f. my prior published ideas.
neowave.com/qow/qow-archive-1079.asp
In TRENDING Impulsions (this is where waves-2 and 4 CANNOT share any of the same price territory):
1. If wave-2 is a monowave, it should NOT retrace more than 61.8% of wave-1
2. If wave-2 subdivides into an a-b-c, on rare occasions, wave-a might retrace more than 61.8% of wave-1, but wave-c (of wave-2) must conclude at 61.8% or less of wave-1.
In TERMINAL Impulsions (this is where waves-2 and 4 MUST share some of the same price territory):
1. If wave-2 is a monowave, it CAN retrace more than 61.8% of wave-1
2. If wave-2 subdivides into an a-b-c, BOTH waves-a and c (though not required) can conclude beyond a 61.8% retracement of wave-1.
It is during Terminal patterns that wave-2 is allowed to retrace as much as 99% of wave-1, but never 100% or more.
Note
The Weekly close is an arbitrary point sample subject to aliasing error as it depends on time zone chosen given that the price was below
59K briefly today.More saliently the VWAP for both daily and weekly has not yet made a new ATH. Note the new week that just opened a few hours above on the UTC time zone, should not be considered a new ATH because the new week doesn’t close for 7 days and thus the volume average weighted price could be lower by the end of the week.
Note also the bearish RSI divergence on the weekly chart if this new week were to maintain it’s VWAP at the current new ATH level for the rest of the week (or drop in price).
I’m still not convinced of an ATH breakout. I need undeniable proof with a volume breakout.
Note
Importance of VWAP is exemplified by it confirming the bullish Cup & Handle in 2020, which would not have been confirmed otherwise.
So I await confirmation on VWAP data before deciding which outcome is in play on the Bitcoin Elliot Wave Theory.
Note
Repeating pattern?Elliot Wave possibilities that don’t break the rules:
Note
C.f. also my idea:
Note
Implications of a new ATH w/o a 4th wave below 26k is that said breakout would be the 3rd wave (can’t be the 5th wave) and t͟h͟e͟ ͟3͟r͟d͟ ͟w͟a͟v͟e͟ ͟i͟s͟ ͟a͟l͟w͟a͟y͟s͟ ͟t͟h͟e͟ ͟l͟o͟n͟g͟e͟s͟t͟. Thus price would be headed north of ~29k + ~62k = ~101k. That would validate PlanB’s expectation and invalidate my expectation from the Fibonacci ellipses and other analyses.Thus I await the result on the VWAP chart. Will it break higher this week?
Note if my Fib ellipses analysis ends up correct, I must admit that it would be the strangest looking Elliot Wave pattern. A-b-c interludes are allowed, but it’s highly suspect that the b-wave would approach the top of the 1st wave.
Yet the broadening wedge from 2019 – 2020 was strange. It essentially make it impossible for that to be a 1st and 2nd wave w/o a “TERMINAL pattern” thus requiring the 4th wave enter the price range of the 2nd wave. B͟r͟o͟a͟d͟e͟n͟i͟n͟g͟ ͟w͟e͟d͟g͟e͟ ͟f͟r͟a͟c͟t͟a͟l͟ ͟m͟a͟y͟ ͟b͟e͟ ͟r͟e͟p͟e͟a͟t͟i͟n͟g͟.
Note
The worst possible case scenario:
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