2018 Cryptocurrency Crash (Elliott Wave): Triangle Phinance
From 17-DEC-2017 to 06-FEB-2018, the Bitcoin market declined 70% in just 50 days. This decline has been the first leg of the cryptocurrency bear market.
Since the low set on 06-FEB-2018, the Bitcoin market has meandered sideways for over 100 days thus far. Price action appears to be contracting into a symmetrical triangle formation with diminishing and . Bitcoin is behaving like a boring stable currency!
A triangle formation reflects a balance of forces creating a sideways movement; an equilibrium and indecisive psychological state of mind between the bulls & bears, creating a period of consolidation as the market deliberates its next move.
Five waves are expected in a contracting symmetrical , labelled as a-b-c-d-e waves.
Under textbook analysis, at least two of the five alternate waves are typically related to each other by the Fibonacci 0.618 golden ratio:
—wave-a: Rallied 95% from 06-FEB to 05-MAR, retracing a 50% Fibonacci of the downtrend wave that began on 06-JAN.
—wave-b: Declined 45% from 05-MAR to 01-APR, retracing a 95% of wave-a.
—wave-c: ‘April Fools Rally’: Rallied 55% from 01-APR to 05-MAY. In regards to length, it was a Fibonacci 0.618% of wave-a and terminated just shy of the psychological 10,000 level.
—wave-d: ‘Sell In May And Go Away’: Declined 30% thus far from 05-MAY to present. Should wave-d equal a Fibonacci 0.618% of wave-b, it would do so at around 6675 (BITFINEX) —and converging of the triangle suggest by early JUN. This wave-d must terminate above wave-b for the symmetrical triangle to remain valid; i.e. above the APR low of 6425 (BITFINEX).
—wave-e: The final leg of the contracting symmetrical , and the shortest. Should wave-e equal a Fibonacci 0.618% of wave-c, it would do so at around 8875 (BITFINEX) —and converging of the triangle suggest by mid JUN. It is common for this final wave-e of a symmetrical triangle to either undershoot or overshoot. However, this wave-e must terminate below wave-c for the overall symmetrical triangle to remain valid; i.e. below the MAY high of 9990 (BITFINEX). Incidentally, CBOE Bitcoin futures expire on 13-JUN. Also, 16-JUN would mark 100 days since price last traded at the psychological 10,000 level.
Upon completion of contracting symmetrical , the bear market is expected to resume towards 4257 (BITFINEX) which marks a Fibonacci of the entire Bitcoin market.
Historically, when any asset bubble bursts, the unravelling bear market typically lasts 2 years on average (from peak price to ultimate low); and usually erases approx 90% in value (thebubblebubble.com/historic-crashes).
Applying the metrics to the cryptocurrency bubble, it would suggest Bitcoin between $850 and $2500 (or $1000 on average) around 3Q2019.