An Alternative EWP and Fibonacci Reading

Recently I am thinking that perhaps the reason why I am not that much affected by the increasing FUD that afflicts the crypto market is that I am just a small fish in the vast ocean of this speculative space. Somehow in the existing market trend, a small player has an advantage for he is not that emotionally invested.

Contrary to negative sentiment, I have this sense of excitement looking forward to preparing for the end of the current sell-off. In such a preparation, I think I have to revisit and evaluate BTC's chart to aid me in coming up with an alternative interpretation about its next move.

Last Month's Technical Analysis

Just for fun, on the last 18th of May, I published my technical analysis of BTC using both EWP and Fibonacci retracement. The problem with my chart reading at that time is that I utilized the monthly time frame and as a result, I failed to count the number of waves to complete Wave C.

In EWP, there is a rule, that waves 1, 3, 5, A, and C are typically composed of five waves whereas waves 2, 4, and B have three waves.

Using a monthly time frame, you cannot see the formation of those small waves within the larger wave.

Shifting to a weekly time frame, one can see that the Intermediate Wave C still lacks two more waves to complete the Primary Wave 2.

By the way, considering the length of time, the five waves that started in 2017 are classified as Intermediate and that peak price in November last year is considered the Primary Wave 1. What followed next is a Primary Wave 2, a retracement wave composed of three Intermediate waves (A to C).

Using this type of analysis, two more waves are lacking to complete BTC's Wave C. One can speculate on a bounce and another sell-off to accomplish the required number of waves.

Wave Personality and EWP Rule

One helpful tool in the study of wave personality is that during second waves, everybody is convinced that the bear market has returned. Looking back, you can see that this current bear market started in November last year and is now on its last leg to complete Wave C.

Another rule I forgot to use in my last analysis is that "Wave 3 is never the shortest wave." Since Wave C is also the third wave, comparing it to Wave A, the last time the former consolidated in the 30,000 area would invalidate the given rule. Breaking down that assumed previous support somehow is consistent with the personality of Wave C.

The challenging part now is to guess the next support for BTC's price. Perhaps, the December 2017 high can provide that at the 20,000 level. If this will break down again, the worst-case scenario is that BTC may reach the 15,000 area, which is its 78.6% Fibonacci Retracement.

Implication for HIVE

Honestly, HIVE's current price action does not make sense anymore. In business terms, movement like this seems that the “business” is shutting down and every shareholder is exiting through the door. It looks like the price is returning to its base.

Nevertheless, if HIVE will follow BTC’s price action, one can also anticipate two more waves before the current sell-off will stop and the price will also search for its own base.

HIVE's price decline doesn't reflect the increasing developments of many projects built on this amazing blockchain. As such, a bargain price like this should be gladly embraced. Personally, I consider the current dominant sentiment providing a very rare opportunity to prepare for the next bull run.

Grace and peace!

A Disclaimer:

Though there are times that technical analysis like this is useful, ultimately, it is just a game of probability. Nothing is certain in the market but uncertainty.

Sources:

Robert Prechter and A.J. Frost. 1977. Elliott Wave Principle.

Charts are taken from investagrams.com