Yet the price progression and the actual development of pattern call that into question and caused me to wonder if Nov 2013 high was actually the major wave 5 top. Consequently, I assumed that the bounce of the 2015 low was a retracement bounce. That might still be the case. Now that we have enough price history from that low to enable us to make a calculated guess of what this might indicate regarding future price path.
So here are the 2 possible scenarios (both indicating price weakness in the short term):
1. That the Nov 2013 was the major 5 wave top and that we have seen the bounce from Jan 2015 low as triple which upon completion will revert to downside in ongoing bear market since Nov 2013.
2. That Nov 2013 high was major wave 3 and the decline since into Jan 2015 low completed major wave 4 and since then we have developed a major wave 5 which instead of taking the usual form that of an impulsive move of 5-3-5-3-5, it has taken the form of 3-3-3-3-3 expanding (Megaphone) and if this proved to be the case then we have truncate wave 5 where the top fails to take out the price high of wave 3 (see detail of Truncated wave 5 in section 2.3 at http://my.elliottwave.com/resources/free/elliott-wave-tutorial.aspx ) https://www.screencast.com/t/8x7WowPWXs
So it seems that we are in very late stage of that cycle which is likely to complete around $800 zone (see charts below). Or that we are completing 1st of intermediate wave V and could experience a pullback to $700 zone with final to follow leading into completion of this cycle (around $900 – see charts below) since Jan 2015 low.
Many have noted the developing in the price action of Bitcoin and have attempted to draw this with variation covering different price zone and time frame. This confusion is further complicated when using Log Scale where it appear like from the Jan 2015 low (or at best a ) Vs Linear Scale showing a megaphone shaped pattern.
The important to take note of is the one being formed from the low of 13th November 2016 and which is nearing completion with upside being capped around $800 on .
Rising in this position are topping pattern suggesting that we might have entire cycle from Jan 2015 low being completed or the one which started from 2nd August low. So even if this is not a full reversal (with final to follow) it suggests a pull back is due which could drop to around $680 -$700 area.
If this zone holds then we are likely to have one more minor to the upside to follow and which could end around $900 - $950 zone as a last get out of jail card for any longs to take protective action.
Series of charts below show the details.
Warning: This is my interpretation of price action using TA approach that I consider helps me the most but could be completely wrong. Therefore as always, do your own analysis for your trade requirement and ignore my views.
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This now seems like it is completed. I gave the heading will BTC offer free get out jail card. This will be the case if we hold above 700 but ideally above 800 in which case we might get another bounce which could retest 1000 zone or even make new ATH. But that cannot be counted upon of the cycle has already completed. If it has then we have long period of bearish cycle ahead of us which is not most wish to hear and so it is just my own view based on my interpretation.
It can be totally wrong as I have always said. But if the broader picture plays out then actual levels I suggest in my charts are less important in order to focus on the overall theme.
Here is the update chart which I shared earlier.
From the Jan 2017 high the anticipated drop only formed a zigzag decline rather than falling wedge (5 wave). Since it which it has continued to retrace to $1080 zone being 78.6% fib retracement to the upside and has sold off strongly to $936 on Finex which is likely to be a new bearish cycle.
From $936 the price action accompanied by lower volume taking much longer that looks corrective. This retracement bounce might make it to $1000 which might be potential resistance as round number. If correct, the downside could be retesting the last low around $700 or form new lower low. I risk being laughed at as there are many who keep asking what will make me admit that I am wrong. Well right or wrong here are the charts.
Consequently, March 2017 high did not prove to be completion of the cycle and in fact we have new high.
So from this stand point there are 2 possibilities.
(1) The March high did complete the cycle and dropped in what I think is a 5 wave decline in the form of leading diagonal (of 3-3-3-3-3 structure). If this is the case then we have bounce in a zigzag to present high which is higher than March high, so it is likely to be a wave B of expanded flat with wave C decline to follow.
(2) the drop from March high was not a leading diagonal and rather just a double zigzag, and under this scenario we are now close to completing the entire cycle from Jan 2015 low.
The conclusion would be that the upside is limited in either of the above cases and we should revert to the downside even if it is only proves to be a retracement. Likely downside could to $750 area as a modest target.
Here are the 2 charts:
Arithmetic scale with megaphone pattern
If we are forming Wave B top in expanded flat referred to above
Log scale - various perspective of rising wedge
If however, this is a wave 5 completion with Jan 2015 low as wave 4 low, then we might have long bearish cycle to follow.
Unfortunately there are no ways at present for me to say which one has more probability.