There is a lot of information below. I strongly encourage you to read the entire post.
Without further adieu:
Ladies and gentlemen, we may have ourselves a breakout. Take a look at the chart below:
This price action occurred just as I began writing this article, so we are in the beginning stages of this potential breakout and, in my opinion, too early to make any claims. Therefore, before I claim a decisive breakout, I would like to see the beginning of a five-wave impulse up and thus out of this downward-pointing wedge (as noted in yesterday's post). At this point, price could snap back into the wedge at any moment (referred to as a "bull trap"). I would also like to see a more solidified spike in volume that would give us more confidence that we are undergoing a true trend reversal, though when volume is already low (relatively speaking), this desired spike in volume may not be too defined. We can see that the MACD is in support of this breakout, but where is our volume?
I will await further price action before making any decisive claims.
Let's remind ourselves where we came from:
- Our run up to 40 sats was a higher-degree wave 1, represented in green (the five lower-degree actionary/motive waves are represented in blue).
- The correction that brought us to 20 sats represents a higher-degree wave 2, represented in red (the three lower-degree reactionary/corrective waves are represented in yellow).
- Once we complete wave 2 (which may have found its bottom), we will be on a higher-degree wave 3, represented with a white arrow & white text.
Seen below:
Forward Discernment:
Please take the following information with a grain of salt.
When it comes to cryptocurrency, there is no precedent and therefore there are no definite values. The Fibonacci ratios that will be used, technically speaking, are reliable only for the equities markets.
According to Elliott Waves Theory, wave 3 should be 1.62x, 2.62x, or 4.25x the length of wave 1. The length of wave 1 was 33 sats (May 10th's high of 40 sats minus April 12th's low of 7 sats equals 33 sats). Therefore, we could expect the following:
| Length | Value | |
|---|---|---|
| Possibility 1 | 53 | 73 |
| Possibility 2 | 86 | 106 |
| Possibility 3 | 130 | 160 |
To help you visualize what this could look like:
Again, for the sake of learning, take note of the following information in order to consider possible implications:
- Elliott Waves theory tells us that wave 3 should be 1.62x wave 1. Therefore, the latter two multipliers (2.62 & 4.25) are technically over-extensions.
- Wave 3 cannot be the shortest wave among waves 1, 3, and 5.
- Wave 3 could be under-extended (or less than 1.62x the length of wave 1)
- If wave 3 is less than 1.62x the length of wave 1, we can expect an over-extended wave 5.
- Every wave (1, 3, or 5) has the possibility of being over-extended.
- Even if wave 3 is not below 1.62x wave 1, wave 5 could still be over-extended.
The reason I make a point to note the above is so that you continually remind yourself that these values are in no way cement. Time is the greatest tell, and - unfortunately - many fail to practice patience. Assuming price continues upwards, those who are most patient will reap the greatest reward. There are some who rely only on TA (Technical Analysis (charts & graphing)), and there are some who rely only on FA (Fundamental Analysis, (media/news/technology expectations/etc.)). Technically-speaking, Elliot Waves theory does claim that price acts completely independent of news or media (in other words, price is not effected by news/media). Personally, I'm not sure how exactly I feel about this. Therefore, I like to rely on both TA and FA. It is important to DYOR (Do Your Own Research) in order to discern what the future may hold.
That being said, it is of no great accomplishment that I can sit here and do TA. Although, in my opinion, the FA side of things is where the rubber meets the road. Why? Because I personally believe that news and media outlets have a great effect on assets like cryptocurrency.
Are you willing to do your due diligence and decide what investments are going to be most beneficial? I urge you to come up with a solid investment strategy. I also encourage you to make every buying and selling action on your own accord. Do not buy anything based on what I have ever written in my blog. Do not sell anything based on what I have ever written in my blog. If you as an individual would like to take a short-cut and instead use what you read on the internet in order to guide your buying/selling/investment actions, you must also be willing to take full and complete responsibility. I will never tell you to buy OR sell anything. That is a decision that I make for myself; that is a decision you must make yourself.
Thank you very much for taking the time to read this post, and I wish you the absolute best!
Legal Disclaimer: I am not a financial advisor nor is any content in this article presented as financial advice. The information provided in this blog post and any other posts that I make and any accompanying material is for informational purposes only. It should not be considered financial or investment advice of any kind. One should consult with a financial or investment professional to determine what may be best for your individual needs. Plain English: This is only my opinion, make of it what you wish. What does this mean? It means it's not advice nor recommendation to either buy or sell anything! It's only meant for use as informative or entertainment purposes.