BTC Retrace inbound, heres how Im gonna play itFirst off I'd like to disclose my bias, I am a huge proponent of BTC, I personally have some ~75% of my assets allocated in Bitcoin and Bitcoin adjacent securities. That being said, I don't want it to go down, but when the game is money I just gotta go with the flow...
As of late BTC has been following an Elliot Wave pattern to the T. We've already crossed through the impulsive move up, waves 1-5 have been completed as shown with the Red and Green mountain I constructed to the left of the actual chart. Now were moving into the Corrective Move.
You'll notice that the Elliot Wave's 3 through B portion looks near identical to the Head and Shoulders pattern, that's because they're the same thing. I dont think I need to explain why BTC is well due for a retrace, but just in case Ill summarize.
Over the past few months(weeks really) BTC has gone up a staggering 70%, the entire duration of that period it was stimulated by strong, yet short term market hype and financial adoption as a fiduciary standard. While I believe that this process is only just in the earliest stages, with analyst predicting prices of 120k, 150k, 200k and beyond within the next 2-10 years it would appear i'm not the only one. In any case, very rarely is it a straight shot to the moon, the clap back is inevitable, and as BTC has been riding along the upper band of Bollinger and Kelter indicators this whole time anyone could have told you that.
In any case, back to the play....
BTC is currently in the first part of the corrective move, it's making a heavy retrace back to a near support level at around 90k. While a 103k to 90k drop would've been well sufficient for me to play off of, I want the big bucks, so instead were using this first tentative minor retrace as another confirmation signal.
What happens next is that we climb back up to create the "right shoulder" reaching peak "B" and using that as our last and final entry signal.
Depending on your appetite risk, you can either play this as I do, with a put spread, or just sell your shares. However what I do suggest you do not do, is simply hold through it all. If your on trading view, your either an avid trader or trying to become one, riding through the shit storm like a sitting duck is a passive course of action that will get you to where your headed, albeit very very slowly.
I took my analysis a step forward, I recognize that knowing 'if' a currency/security will go down is not a difficult thing to do. The trick is predicting 'when'. The catch is that predicting that aspect is almost always what gets people burned. That being said, my prediction is that we'll see the B peak/right shoulder around the 24th of December give or take 2 days.
I used very rudimentary means to get that figure, typically in a item like this well see a slower retrace and a quick upwards motion. Looking at how long it took to get from peak 3 to 5, IE the left shoulder to the head, we can get an estimate for how long it would take to get from the 5 to B.
That figure was 16 days, add in a little buffer zone for posterity, and boom 16 days from our peak at 103k is Dec 24th.
For the spread play I have cookin' I have a few specific criteria that need to be met otherwise I wont enter and will instead opt to simply short shares:
- I want a sub 60% IV, if it gets much higher than that, the premium will push the breakeven too far from the strike and the contract wont be viable.
- If the retrace were in the midst of right now doesnt fall to 90k or close to it, that means that any final drop-off after the 24th will likely be too drawn out for Theta to make it worthwhile.
- The B peak is missed, I will only buy my puts on an upwards swing because that will decrease the contract cost significantly. Christmas is the 25th and a Wednesday, however options and stock markets will be closed that day, meaning if BTC makes its final peak anywhere from the 21st 22nd, 25th, and 28th to 29th. We won't be able to do shit other than watch...
I personally will be using Greyscales IBIT spot ETF, I think this is one of the better BTC security alternatives to use as they give weekly expirations and their BTC price is easily calculable as nearly 1:1756 of BTC's actual price(not 100% accurate but its close).
If you look at my chart you can see I've disclosed certain zones that I predict BTC will fall into in the following weeks aswell as the nearest expiry dates to them. I've already let this idea go on for far too long and im frankly getting horny at the thought of how much money Im gonna make.
Here's the spread I plan on entering, however this is still temporary and subject to change as we get closer to the final day.
IBIT 55.5P 01/03/25
IBIT 55.0P 01/10/25
IBIT 53.0P 01/10/25
IBIT 53.0P 01/17/25
Most of those expiration dates have been given an additional week buffer. I personally have enough capitol to where it doesnt matter much what I buy so long as I get any percentage return Ill be happy... make those shorter dated as you wish, but dont come back cryin' when you burn yourself.
Happy hunting, and merry Christmas!!
