friedrice683
Panjang

BTC/USD FRACTAL ANALYSIS 2017-09-27

BITSTAMP:BTCUSD   Bitcoin / Dolar
Here is some work I did working out the fractal wave patterns on BTC/USD. The primary goal of this was to compare the June/July fractal patterns to the most recent pullback from $5k. Prior to this, I my preliminary analysis in which I believe there would be a pullback to the ~$2400 levels, but long term super bullish . While there is always the possibility that the price action we've seen the past 24 hours still leads to additional pullbacks, I think the chances are narrowing by the hour as presumably whales continue to help BTC             get a leg up over its primary resistance levels.

I am by no means a very experienced analyst, and greatly appreciate any constructive criticism that anyone may be able to provide to help me learn from my mistakes. With that said - looking at the analysis, you can see that I did my best to work out each ABC fractal wave pattern I could work out - while respecting as best I could the bigger cycle wave patterns. In doing this, I found that a WXYXZ pattern actually better described the June/July pullback better than my previous intermediate ABC correction wave (thoughts on this?). With that frame in mind, I applied it to the most recent pullback and saw that it also matched (not sure if I am violating any key principles here or not). Furthermore, I tried applying double/triple combo waves on the way up from July bottom to $5k, but still found the 12345 impulse wave to best fit. I then applied this to the current pullback/recovery. According to this viewpoint, then we are indeed well on the way to recovery (versus half-way there in my prior analysis). I still think that a healthy pullback will be necessary sometime from now to 4,300. But applying this analysis to how we look at the trading then, we can have more confidence in buying the next dip, and not having too much concern that there will be an even lower dip.

Immediate near/short term:
I got in right at the most recent bottom, so I have been able to mostly sit back. Of course, after having done this analysis, I would have been more aggressive in my entry positions on the way back up to where we are now, but hindsight is 20/20. Looking forward, I am going to wait until I see the first sign of a legitimate support upon pullback. It could be a small one, or it could be a retracement on Leg C back down to ~$3800 (if this is right). Either way, if I feel that buyers are more than happy to snag more positions at the discounted price, then that is when I will resume placing aggressive positions. However, having learned the hard way - I will also do my best to resist the FOMO and sit out if I feel like we could be running out of steam, and my prior analysis "regains" control with respect to how I approach the plots (in which case, rather than an Impulse Wave, we're actually entering into the next WXYXZ pattern and $2400 pullback notion might come back to life). Based off prior support/resistance levels, I think we will manage to push through 4100, hit 4300, and retrace to 4000-4100. If we are having issues catching our breath now until 4200, I think a retracement back to 3800-3900 would be more than healthy and help revitalize the bulls to push on.

Long-term (3-6+ months out):
Super bull. I think cryptocurrency is still in its toddler years and still has plenty of room to grow before we're at risk for the dreaded bubble analogy or something of the sort.

I really appreciate any comments/advice/suggestions/criticism anyone can provide. Thank you!

wow spot on !
Balas
I think its interesting to see someone actually using fractal patterns....i know nothing about the trading markets for any currency but i am interested in how fractals are seen here i also want to more understand the bitcoin market.....maybe there are different definitions of the word fractal but im thinking of the patterns that go on forever. can you help me understand what your getting at here? idk i also saw another guy talking about the fibonacci sequence too which has me interested


im a noob this is the first time ive gone on a website like this but i know when im interested n something i am smart enough to get it no matter how long it takes and just you talking about fractals makes it more interesting
Balas
@esp91, great question!

Fractals are essentially the smaller wave patterns (components) that make up larger-cycle time frames. Said another way, if you look at higher resolution time frames (say hourly), you can trace different wave patterns that are apparent. When you zoom out to a larger time scale (multi-hour or daily), then these smaller wave patterns make up larger, grand cycle wave patterns we see.

The reason one might want to use wave patterns in their analysis is that they can give you a good frame as to where the general price is going, as well as where pullbacks might occur. Depending on what fractal you are, and what leg of a fractal wave, then this can influence your decision to wait for a pullback retracement, wait for a correction wave, or get in now because it is a last leg up before starting a whole new wave pattern (i.e. - the ABC wave at the end of WXYXZ pattern - if we were tracking the fractals going into this bottom out, then you would know that after the first leg up, there would be a slight pullback down, and then the upward wave would continue shooting up --- versus, perhaps you were hesitant to get in the action because you might've thought it might just dead cat bounce and fall even further)

Just another tool in our arsenal to help provide general guidance as to explain the past in order to predict the future. That's one important thing I think that isn't necessarily explicitly stated: in order to predict the future, then you need to understand the past. Once you understand and can explain the past, then you can have a better frame of mind when it comes to looking forward.

Hope this helps!
Balas
Wouldn't you consider after the 5th wave an ABC corrective wave rather than rallying to the impulsive wave?
Balas
friedrice683 victorvmpm
@victorvmpm,

Absolutely. That is what I have in my analysis from yesterday -


This was just a different take on it. I honestly don't know if one is more right than the other - but I do think that the 3 Combo Wave better matches the patterns we saw June/July, as well as most recently (Assuming that I am not violating some of the guiding principles).

At the very basis of it, I think just working out all the individual fractal patterns is half of the battle. After that is where I attempted to group the fractals by their higher order wave pattern. To your point, I think assuming an ABC correction is completely valid. I have found that the majority of EW analyses utilize that over the WXY or WXYXZ patterns.

Open to any critiques as far as where I picked things! Appreciate any more insight or questions you might have!
Balas
What do you suggest, wait more?
I want to buy more BTC, but I want to get it within a month for the lowest price possible. I know it sounds like a million dollar question, but I dont want to wait longer if the price is raising.
Balas
@moga111, sorry for the belated response here. I personally put small positions in on the dips down. $4200 is major resistance area right now, which was tested and support was nice at $4150. I personally am only trading the dips down, unless it were to break out from $4200. If it breaks out, I will add to my position. Next resistance is at $4300 and then $4500. It's a bumpy road ahead, so just make sure to not buy at the tops. With these types of resistances, there will be retracements back down before punching through. And if it does punch through, well I personally am comfortable missing out on an extra 1-2% profit it means having the security that I am not buying in at the top, and know that that when I buy the dips down, that if we head back down and break support, I can stop loss. Can't do that if you trade at the resistance points and get denied. Patience and discipline is key, despite how bad the FOMO can get at times. Remember, even if BTC were to shoot up from $4100 to $4300 in your face, that's only a 5% difference in price. It could have easily shot down that much, and you're left bag holding. Just my personal advice though!
Balas
moga111 friedrice683
@friedrice683,
Thanks a lot, it crossed 4200 as we speak!
+1 Balas
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