A lot of you people out there have requested a chart on Ethereum and Elliot Waves. And therefore you shall of course have it! But first, for those of you, who don't know about Elliot Wave Theory, I will encourage you to take a look at this chart.
A quick recap of the basic rules:
• Wave 2 can’t retrace more than the beginning of wave 1 • Wave 3 can not be the shortest wave of the three impulse waves, namely wave 1, 3, and 5 • Wave 4 does not overlap with the price territory of wave 1 • Wave 5 needs to end with momentum divergence
Before we begin, let me start saying, that there are ton of different opinions about this theory. A lot of people find it useful, and others don't. Some follow all the rules to the letter, others choose not to. We also have some rules about Fibonacci Ratio Relationship. E.g. Wave 2 has to retrace 50 % or more. And Wave 4 are NEVER allowed to retrace more than 50 %. Again: Many people including D4 self, has chosen to accept e.g. a 38,2 % retracement on the wave 2, but then we also want more than a 50 % retracement on Wave 4, but we are still NOT allowed to go into the price territory of wave 1.
This is up to interpretation, and what you find useful.
Before it becomes too complex, let us start to take a look, at the 4h ETHUSD Chart. And let us start looking at the 1st Elliot Wave Cycle 1-5 and ABC(Big Yellow Circle ).
As you can see, we follow all the rules. Wave 2 is NOT retracing more than Wave 1. The 3rd wave is NOT the shortest. And Wave 4 is above wave 1. There after we have the ABC-correction.
Let us then take a look, at the new Elliot Wave Cycle in red. The 2nd wave has NOT retraced more than the beginning of no. 1. Good. And the 3rd wave is longer than the 1st wave, so it will not be the shortest. GOOD. But then...
We have a huge wave 4 Fibonacchi Retracement on 61,8 % AND the 4th wave is now UNDER the 1st. So it does not qualify.... We have a failure!
D4rkEnergY is everywhere! <3
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Komen
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A small correction: I was too fast. Wave 3 is shorter than wave 1, so it still qualify IF wave 5 is shorter than the 3rd.
But it does not change the fact that we have a Wave 4-failure.
I keep wondering if Elliott can't handle the dynamics of crypto-platforms -- especially considering they are effectively hosting all of these new tokens (or a complex of novel and distinct stores of value). I'm thinking that these platform type cryptos like ETH or NEO will not respond to Elliott theory in the same way that the more straightforward digital currencies, like BTC or NANO, will. I'm thinking that, since their valuations will increasingly be linked to the projects built upon them, platforms will increasingly NOT act like stores of value themselves but like something we may not yet have modeled in traditional currency and/or securities charting.
All of that aside, ETH has traditionally had more of a stepwise development with these long, boring plateaus punctuated by sharp rises and repeating again. Maybe the plateaus are designed in to give token development some level of stability on which to build.
Dieter1983
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Could you share a good entry-point for the long hold ETH ?
SorinBlajan
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this is the price you pay for trying to kill you dad. Now we need some double bottom and try again.
All of that aside, ETH has traditionally had more of a stepwise development with these long, boring plateaus punctuated by sharp rises and repeating again. Maybe the plateaus are designed in to give token development some level of stability on which to build.