Accurately Predicting Market Corrections - A reflection
Updated
The cryptoverse has life breathed into it once again!
With Wave 5 of an Elliot Wave BTC Super Cycle just beginning, we can expect very large growth across the board for the next 2-4 months! Wave 5 of EW cycle is characterized by public adoption - which we saw very much in the Wave 5 cycle within the Wave 3 supercycle - so we can definitely expect mainstream use of crypto becoming widespread from this point onwards, and price that reflects this.
With the market obviously beginning a rally (which I will post a separate analysis on), I want to highlight some techniques I use for predicting a correction.
I admittedly underestimated the correction for bitcoin by expecting a floor of around 11k. However, I very accurately predicted the top of the market, and also the timing of the correction.
I use 3 tools for determining when a correction will occur:
1. A 61.8 day cycle indicator - if you examine the last 12 months, this indicator has been very accurate (this is the dashed red line on my chart)
2. Trend-based fibonacci time extension - our charts have 2 dimensions, both equally important, but most people do not pay enough attention to time, which is a full half of all the data we see on our charts!
3. Channels.
The corrective wave pattern we saw from December 17th was a classic double 3 - a flat ABC, with a small move up, followed by a zigzag ABC.
1. The 61.8 day indicator I use predicted the bottom of the Wave A within the zigzag ABC within 2 days. This was the penultimate drop, finding support at 0.618 retracement of Wave 5 (cycle).
2. Now at this point, if I had practised what I preach about time being so important, I would have bought back in at the lows of the zigzag Wave C, instead of Wave A where I did, and profited more.
Mistakes are stepping stones to success.
In hindsight, although I predicted a low here, time had not even reached the 27.2% trend-based fibonacci time level for Wave 5 (cycle), so a further correction should have been anticipated. In the turquoise box I draw is the critical area. As with price, the "shallower" a "time correction" the more bullish an indication of price on larger scales there is.
As of today we have hit the 38.2% trend-based fibonacci time level, and can now see this rally begun on February 6th.
3. Looking at the channel indicator: see next image
With Wave 5 of an Elliot Wave BTC Super Cycle just beginning, we can expect very large growth across the board for the next 2-4 months! Wave 5 of EW cycle is characterized by public adoption - which we saw very much in the Wave 5 cycle within the Wave 3 supercycle - so we can definitely expect mainstream use of crypto becoming widespread from this point onwards, and price that reflects this.
With the market obviously beginning a rally (which I will post a separate analysis on), I want to highlight some techniques I use for predicting a correction.
I admittedly underestimated the correction for bitcoin by expecting a floor of around 11k. However, I very accurately predicted the top of the market, and also the timing of the correction.
I use 3 tools for determining when a correction will occur:
1. A 61.8 day cycle indicator - if you examine the last 12 months, this indicator has been very accurate (this is the dashed red line on my chart)
2. Trend-based fibonacci time extension - our charts have 2 dimensions, both equally important, but most people do not pay enough attention to time, which is a full half of all the data we see on our charts!
3. Channels.
The corrective wave pattern we saw from December 17th was a classic double 3 - a flat ABC, with a small move up, followed by a zigzag ABC.
1. The 61.8 day indicator I use predicted the bottom of the Wave A within the zigzag ABC within 2 days. This was the penultimate drop, finding support at 0.618 retracement of Wave 5 (cycle).
2. Now at this point, if I had practised what I preach about time being so important, I would have bought back in at the lows of the zigzag Wave C, instead of Wave A where I did, and profited more.
Mistakes are stepping stones to success.
In hindsight, although I predicted a low here, time had not even reached the 27.2% trend-based fibonacci time level for Wave 5 (cycle), so a further correction should have been anticipated. In the turquoise box I draw is the critical area. As with price, the "shallower" a "time correction" the more bullish an indication of price on larger scales there is.
As of today we have hit the 38.2% trend-based fibonacci time level, and can now see this rally begun on February 6th.
3. Looking at the channel indicator: see next image
Note
When price breaks out of a long term channel, it very literally becomes "what goes up must come down" and vice versa.2 major examples of this:
- channel drawn between Wave 2 and Wave 3 of the Wave 3 supercycle - price broke heavily out of this top channel at the end of september, then corrected back into the channel early november. Price then ENORMOUSLY jumped out this channel for a full month, and then the end of the Wave 4 supercycle correction, entered back into this channel
Note
Note
2nd example:- channels of the corrective wave from Mid-december - yellow boxes are major points the price bounced off, nearing the bottom of the channel - with the 2nd yellow box being the end of the correction
Note
The yellow box around "A" of the zigzag ABC hit the red-dotted line nearly exactly, on the 61.8% retracement of the previous impulse wave.It's important to look at multiple indicators, measuring different parameters. The more that support each other, the stronger the sign is.
In this case my mistake was to not take where the fibonacci time level was, but will be adapting my strategies accordingly and prepared for the next correction!
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