Sorry for being kinda late with this blog. I kinda get distracted and... well my research did take more time than I expected. An
Recent bitcoin situation... and my buyout
a few days ago I heard about the Elliot wave principle. I was interested - I was told bitcoin is now performing correction (sorry If I use the wrong word, I'm not an English native-speaker and tend to use materials in my language more than English ones, so some English terms I may not remember correctly) and it is behaving according to Elliot wave principle. This what I remember went something like that:
There will be one slight drop, then a little bit higher (but it will be lower high), then a bigger dump after which we are supposed to go even higher than current ATH was, and reach final ATH of that bitcoin cycle"
Well that sounds interesting to me. Even though I before wanted to buy bitcoin again at price about 10,000 EUR, or at least less than 17,000 EUR (my previous selling price) I go to the conclusion, that bitcoin could reach really incredible prices before that cycle (and that bull run) ends even about 159,975$ - we could actually round that up to 160,000$, as this is just a heuristic (how I get to this value You can read here) - seems crazy but well last increase is usually very big, that's how bitcoin did work in the past, so it seems possible... then of course market bubble will pop again, as usual, it goes with those cycles... but still even with that huge dump, the price could stay much above what we recently consider a high price...
One of Polish crypto Youtuber's even stated that "Those may be last months we see bitcoin below 40,000$"... and to think I did consider "good price for buy bitcoin" as below 10,000 Euro (which equals too little above 12195$... as I saw USD price drop down to about 0.82 EUR)... so I did decide to buy. I bought 0.002 BTC with the price of 30,000 EUR, and 0.0025 with the price of 25,000 EUR (so together I paid about 120 EUR for 0.0045 BTC). Actually I should have to pay closer attention to the market around that time instead of just leave those offers, as I would be able to buy bitcoin with a price of about 22,500 EUR... for the same amount of money invested I would get 0.00535 BTC almost 20% more... but well there always could be better trading, and I think I will still make some profits from that buyout. Just a little bit lesser than it could be...
Anyway, this prediction of moves according to Elliot waves' principle makes me think of buying some more. I mean if the price reach about 20,000 EUR - and nothing will foreshadow going much more down - I would buy it, for making some DCA (Dollar Cost Averaging strategy, which I partially use). Though in another Polish crypto YouTuber (Piotr Ostapowicz) said that now about 34,500$ (something a little bit more than 28,500 Euro) there is a big support line... You can see how he draw it here(it's 4-hour interval BTC to UST chart):
Now we go up a little bit about that, but generally, here this low is at the same line as one of the previous high and is at line of rising trend...
So will this Waves work?
Let's see, according to Elliot waves principle we should have now 5 parts of the impulse phase (3 waves up (1, 3, 5) with 2 waves down (2, 4) between them), then 3 parts of the correction phase (2 waves down (A, C) and 1 wave up between them (B)). So I tried to draw them on the previously shown chart, and here's the effect:
So well, more or less we can see the impulse phase... though initially, I thought rather about treating waves 1, 2, and 3 as just one up wave... wave 2 was just a really small move after all... well move 4 isn't big either. The correction phase also seems somewhat legit... though certainly, one can be argued, that the B or C wave could be divided into more waves... but they still keep how generally price was acting. And to the most important rule of said Elliot Waves principle. of creating lower highs now, wave A has low slightly upper wave 4 (which is good I think), but... it's below wave 3 high(but looking at the scheme of Elliot waves it doesn't seem that but either)... and wave C creates - at least for now - higher low. We actually see the correction is not like it looks on the scheme of Elliot waves:
What that could mean? Well, there is more than one kind of correction and also wave C isn't necessarily finished yet (even though now price went a little higher...). And well we have different types of correction.
If it would be a "simple correction" (called also "zig-zag"), wave C should be equal to wave A - at best in a matter of price and time. If that would be the case it would end at 28,000$ and currently, we are just half of it.
The second option is "running correction", which gives an illusion of continuing the trend. It actually breaks the rule I mentioned before as it seems almost like there were no corrections... well we already see it's not the case now.
The third option is "flat correction", it's not what we could call "most typical" either, as its main feature is that wave C ends higher than wave A... isn't it exactly what we have here? It often makes a triangle formation - which we can obviously see, as it was already drawn on the chart.
And - just for the sake of completeness - fourth option: "unregular correction". In that case, we have higher highs and lower lows. So an inversed (expanding) triangle. It's the most volatile scenario and as we can see - opposite to what we actually have. Currently rather all believe bitcoin will be going to the moon (and I agree, though we have to remember it will also fall down somewhat after that... ).
And how it will look at larger intervals? Well, let me show You 24h interval chart from CoinBase pro:
There... well maybe I'm just bad at this bust I see just one long up wave - we have more or less constant growth on that chart... well initially it was more like going sideways, maybe there was one little dropdown (in red circle) but it's too small to actually drawn down wave here. And even with it we would have just 3 of 5 needed. So here it seems like we just don't have the situation described in the Elliot wave principle... though the second part (correction phase) seems similar as in the previous chart.
And we have this triangle again, with lower highs and higher lows. And it seems like we either are going down right now or start to moving sideways(shorter interval doesn't seem to foreshadow some big change about that)... well it has to be more or less so, as we have this triangle to close.
Final thoughts
Well in both cases we see this triangle formation, the main question is: will we go down or up after breaking it? It should be a huge move, but we probably have to wait a little for it. The price is still going down (despite going back to higher values on the first chart, this from Piotr Ostapowicz's video, but this chart is OLDER) but just a little, so we can go much more down now (as some predict) for make a big move up after that and reach new ATH (scenario most similar to previous cycles, as far as I know - even though this "big move down" kinda fades on larger interval). But we can also break this formation and go up. If that would be the final pump of this cycle, in which we reach the final ATH, or we will have yet one big dump and then final pump? I don't know. I just don't expect it will be the end. The end of the cycle is usually marked with a BIG pump and then BIG dump, which is just not the case now.
Is it a good moment to buy more? I don't know but IF the price will go down then probably it could be a good idea.
But remember - that all is not financial advice. I’m not Your financial adviser and it’s just my opinion which I share in the hope it will be useful for someone. And remember to never invest more than You can afford to lose!
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