BITCOIN - The Talk of Town
Published: Tue, 12/05/17
Bitcoin - Is truly the talk of town. You cannot go anywhere without being asked about it. And it has the attention of retail investors, as the aggressive marketing by those involved cannot go unnoticed. Even as it remains unrecognised by regulators it is being pushed over many illegal exchanges. From someone trying to sell I learnt that the spreads to exit can be as high of 100$, reminds me of the ring days on the BSE where jobbers gave quotes like 50-55, meaning a 5 rupee bid
ask spread to buy and sell a midcap stock.
So I have started to publish the Bitcoin charts recently as the charts become interesting in the blow off phase showing clearer patterns and wave counts for each sub move. Clear reflection of the participation inside it, as waves reflect mass participation. That said Bitcoin is a manifestation of the global liquidity now, and not the anti dollar as it was planned out to be. The charts are in order of dates published and the last one from yesterday points us to a 5 wave advance from the 5500 low.
Another correction or a major high?
BitcoinBitcoin has everyone's fascination. After each 5 wave rally an EW analyst would expect a correction, and if it is 3 waves like the last one in Sept. Now another 5 wave rise is in progress and must add at least 3 more waves up as shown to complete a 5 wave sequence before we can say this move is complete. I do believe however as discussed in the Podcast that Bitcoin is a manifestation of the liquidity bubble and therefore its final top may coincide with that of equities at some point with a lag.
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BitCoinBitcoin has been reacting from the upper end of the range and so it did the last time it got there. Even though it did not fall to the lower line as projected, this retest puts us back at what is a critical resistance so near term again watch if prices do react from the 8200-8300 range downwards. If yes then it would open up room for a deep cut again. The lower trendline is at 5300$.
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BitCoinBitcoin remains the best manifestation of excess liquidity of our times. So as an indicator its charts keep getting clearer as patterns and wave counts start to show up very clearly given the large participation in the instrument. EW is nothing but a measure of psychology of crowds. So the chart below shows the breakout post the 7800 mark last discussed that led to one leg higher. This new leg fits a rising channel and prices reversed from the upper end [log scale], perfectly and pierced the lower end though not closing below the lower end. The lower end at 9480 and rising steeply is the key support now, and a break would mark a short to medium term trend reversal in prices again.
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BitCoinBitcoin fell to the lower end of a channel but did not break it and formed a triangle there. Triangles are typical wave 4 patterns and that puts us in wave 5 up. This morning prices are at a new high out of the channel in wave v of 5, for the rally that started from 5400$. What that means is that it should be a final push up before another correction starts.
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