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Bitcoin technical analysis

  • #1,201
  • Jan 9, 2014 12:47pm Jan 9, 2014 12:47pm
Quoting infinitus
{quote} Hi Venzen, very hard to say. Momentum and volume distribution points to the conclusion, that we are in the wave 5 or wave 4 of 5. If the top is really not in yet, I see two variants for wave 4 of 5 A) we have seen a zigzag down and are now up in wave 5 of 5 B) we have seen a zigzag down, which is the A wave of an ABC-flat down. Now up in wave B (which may be already finished) Looking at volume (the volume of the traded Bitcoins, not the USD), people placed value in the 10-100 (spike 200) USD area. From a market profile perspective, this...

thanks, infinitus

I'm not sure which wave exactly you're refering to.. I'm assuming the wave since mid-Dec which is currently near 800 (BTC-e) and 900 (MtGox)

BTC-e seems to show a zig-zag down (after a truncated 5th to the early Dec top) but the other exchanges (MtGox and Bitstamp) show a clearer triangle (3-3-3-3-3) from a late Nov top to the mid-Dec low. lady_luck often posts the BTCCNY chart which seems the clearest of the lot.

so, at thee higher degree, what do you reckon? When wave 5 prints we then have a wave 1 (of say Minute degree) in place, so down again for wave 2 to say $250...
cryptocurrency everytime
  • #1,202
  • Jan 9, 2014 12:49pm Jan 9, 2014 12:49pm
Quoting infinitus
{quote} bagger = +100% 2 bagger = +200% 4 bagger = +400%

ok, i see... so 400% price rise to $4,000/$5,000... that seems feasible.
cryptocurrency everytime
  • #1,203
  • Jan 9, 2014 12:51pm Jan 9, 2014 12:51pm
Quoting lady_luck
{quote} It's a baseball thing, it's like a winning hand

thanks - i think both your baseball explanation and infinitus's percentage multiplier points to the same thing!
cryptocurrency everytime
  • #1,204
  • Jan 9, 2014 12:54pm Jan 9, 2014 12:54pm
i tried to post this earlier but when i hit 'submit' the page reloaded and there was no new post... this is the second time this week this has happened...

the wave circled in yellow occurs often. It's very distinctive and seems to be a C wave that frequently marks the end of a correction.

here it is on the recent low (past hour)

http://ubuntuone.com/2GQLxkdbwumOUPozEmL6un
cryptocurrency everytime
  • #1,205
  • Jan 9, 2014 12:56pm Jan 9, 2014 12:56pm
Quoting venzen
{quote} thanks, infinitus I'm not sure which wave exactly you're refering to.. I'm assuming the wave since mid-Dec which is currently near 800 (BTC-e) and 900 (MtGox) BTC-e seems to show a zig-zag down (after a truncated 5th to the early Dec top) but the other exchanges (MtGox and Bitstamp) show a clearer triangle (3-3-3-3-3) from a late Nov top to the mid-Dec low. lady_luck often posts the BTCCNY chart which seems the clearest of the lot. so, at thee higher degree, what do you reckon? When wave 5 prints we then have a wave 1 (of say Minute degree)...

Oh, sorry, yes, the very top may have marked 5 of 3, now in a wave 4 down, or already in the early stages of 5 up
  • #1,206
  • Jan 9, 2014 12:58pm Jan 9, 2014 12:58pm
and here is a chart of the April top and subsequent correction showing this same downward curving wave in various locations (but not circled).

i also labeled (with 'a' and 'b') the obvious 3 wave structures - my labels do not really honour changes in degree - i just wanted to roughly highlight 3w structures to see how many and in which wave positions - some are obviously too small to label - but they are obvious to see

Attached Image (click to enlarge)
Click to Enlarge Name: Gold_Selection_09Jan14_13:28.png Size: 388 KB
cryptocurrency everytime
  • #1,207
  • Jan 9, 2014 1:05pm Jan 9, 2014 1:05pm
and my last chart for the night - a familar wave shape from the July corrective bottom - to me it looks like an A-B-C and not an impulse - yet this is how every long distance wave in Bitcoin starts - which is why I always say that Bitcoin has a diagonal signature and does not feature impulses:

I'd appreciate comments on the count - because it is a rough scetch - and like every other count out there it is wrong

(BTW - there's our friend the downward hooking C wave in the rectangle on the left)

Attached Image (click to enlarge)
Click to Enlarge Name: Gold_Selection_09Jan14_13:10.png Size: 321 KB
cryptocurrency everytime
  • #1,208
  • Jan 9, 2014 1:28pm Jan 9, 2014 1:28pm
Quoting venzen
{quote} thanks, infinitus I'm not sure which wave exactly you're refering to.. I'm assuming the wave since mid-Dec which is currently near 800 (BTC-e) and 900 (MtGox) BTC-e seems to show a zig-zag down (after a truncated 5th to the early Dec top) but the other exchanges (MtGox and Bitstamp) show a clearer triangle (3-3-3-3-3) from a late Nov top to the mid-Dec low. lady_luck often posts the BTCCNY chart which seems the clearest of the lot. so, at thee higher degree, what do you reckon? When wave 5 prints we then have a wave 1 (of say Minute degree)...

wave degree for the whole impulse up is surly primary or even cycle (minute would be funny for longs LOL)

OK, let us think about what all can happen:

a) the whole move up is an impulse

1) it is part of a bigger impulse (wave 1 of 5)
2) it is part of an ABC-zigzag

b) the whole move up is an ABC (non-impulse)

1) it is wave A of an ABC-flat
2) it is wave 1 of a leading diagonal
3) it is wave A of a triangle (I have a concept of currencies, where currencies move in kind of eternal triangles)

c) the move up is not finished, and we may see an extended or very extended wave 5 (Bitcoin is like Gold right now; people see it as protection against currency debasement/devaluation, same as Gold; implication is, that the move is not driven by greed like in stock markets, but driven by fear, thus making the wave 5 most of the time very extended)



So, now let us look at the implications:

a1) the following wave 2 can move all the way back; currencies and commodities retrace most of the time over 50%. Even 76% is not uncommon.

a2) the B-wave of a zigzag normally retraces something between 25 and 65%

b1) the B-wave of a flat retraces minimum 60%

b2) the wave 2 after a leading diagonal normally retraces very deep around 85%. But keep in mind: leading diagonals are fairly rare on higher wave degree

b3) wave B of a triangle most of the time retraces between 60 and 100% (or even 120%) of A

c) common targets for retracements after extended moves are the wave 4 area of one lesser degree or the point of recognition in wave 3

When we look at all this scenarios, we shall look at the 50-60% retracement first. That would put us in the 500-600 league.

But there is another guideline: when a manic move happened, the following correction most of the time goes back to the root of the manic move. Out of my sight this would be around 100.


Really really hard to say what might happen, sadly
  • #1,209
  • Jan 9, 2014 1:33pm Jan 9, 2014 1:33pm
http://theelliottwavesufer.blogspot....coin-more.html
  • #1,210
  • Jan 9, 2014 1:34pm Jan 9, 2014 1:34pm
http://elliottwave5pointzeroreboot.b...btc-ratio.html
  • #1,211
  • Jan 9, 2014 1:47pm Jan 9, 2014 1:47pm
Quoting infinitus
{quote} Oh, sorry, yes, the very top may have marked 5 of 3, now in a wave 4 down, or already in the early stages of 5 up
OK, that's what i thought you meant.

Now very interesting, infinitus - consider that this currency/commodity is about to make massive inroads into the territory previously (and out-datedly) occupied by credit cards and most online payment systems in the online retail world. Zynga have it on test-runs for online gaming (Farmville,etc), Amazon is making implementation plans, Overstock.com (world's largest online retailer) is implementing Bitcoin and Coinbase (a Bitcoin exchange) just received $25mil todevelop and roll out Bitcoin Points-of-sale for high street retail. So the benefit and attraction is not only for libertarians and anarchists (and pandas like me ) but for business who get to circumvent the 2% credit card fee on Visa/Mastercard plus associated bank charges. Meanwhile Wall Street are falling over oneanother in a race to capture clients for Bitcoin ETFs popping up everywhere.

So against this backdrop it's difficult to foresee Bitcoin remaining below $2000 for long - nevermind $1000. Do you see what I mean? Of course EW speaks of PA in disregard of fundamentals and news and so forth - and I believe this - so a forecast of sub-$500 levels indicates a catastrophe: either Bitcoin's encryption getting cracked or someone hi-jacking the blockchain.
cryptocurrency everytime
  • #1,212
  • Jan 9, 2014 1:47pm Jan 9, 2014 1:47pm
Prechter thinks, that Bitcoin has already topped

He has placed the wave 3 top at the April? 2013 high, which was around 200 or 250 (sorry, can not see it in detail on my chart, am on smartphone right now), followed by a wave 4 triangle. The lowest point in this triangle is around 50? or so.

If count is right, the correction should go down to 50-100 area
  • #1,213
  • Jan 9, 2014 1:56pm Jan 9, 2014 1:56pm
Quoting venzen
{quote} OK, that's what i thought you meant. Now very interesting, infinitus - consider that this currency/commodity is about to make massive inroads into the territory previously (and out-datedly) occupied by credit cards and most online payment systems in the online retail world. Zynga have it on test-runs for online gaming (Farmville,etc), Amazon is making implementation plans, Overstock.com (world's largest online retailer) is implementing Bitcoin and Coinbase (a Bitcoin exchange) just received $25mil todevelop and roll out Bitcoin Points-of-sale...

sorry to say: you are part of the Mania, already. Tulips, everywhere Tulips LOL Just teasing........

But seriously: what will all this "late to the party people" think and DO, when price collapses towards 100? Even when we two agree, that such a drop may only be a blip for Bitcoin history, most people will jump off the "sinking" ship.

Have you, for example, heard about the blockchain-size problem?

Now the whole blockchain size is around 13 GB. The blockchain has to be shared with every node. In about three years, this blockchain size will have grown to around 1TB.

Add to this the whole accompanying data, which has to be shared by each transaction. Has someone an idea, how this will be handled?
  • #1,214
  • Jan 9, 2014 2:04pm Jan 9, 2014 2:04pm
Quoting infinitus
{quote} wave degree for the whole impulse up is surly primary or even cycle (minute would be funny for longs LOL) OK, let us think about what all can happen: a) the whole move up is an impulse 1) it is part of a bigger impulse (wave 1 of 5) 2) it is part of an ABC-zigzag b) the whole move up is an ABC (non-impulse) 1) it is wave A of an ABC-flat 2) it is wave 1 of a leading diagonal 3) it is wave A of a triangle (I have a concept of currencies, where currencies move in kind of eternal triangles) c) the move up is not finished, and we may see an...

Great analysis and options array!

We don't have much clarity about the likely path it will take and how deep any correction.

As for for your comment about currencies in triangles I like that and agree. Bitcoin is dual character - both currency and commodity - you addressed both

As for anything below current levels - i feel that only a fundamental catastrophe or design flaw coming to light could destroy Bitcoin (and eventually it will). What I interpret the current correction to be is vanilla-flavoured pullback below the $1000 psych level. I don't want to call silly targets because we're not competing to be right or wrong - its all about assessing the possibilities and then opening trades for profit. Thanks for adding your analysis to the pool here. If we must first go lower to go higher in the longterm that is OK - because positions are cheaper the nearer we approach zero.

Bitcoin has great potential to the upside and covers good pip distance in an average day - which is the part i'm most interested in - and I'm sure you too - so please feel free to visit. It's great to hear your "outside" opinion and EW expertise. BTW - have you found a Bitcoin broker yet? They're not all the same and various members here can advise on their choice.
cryptocurrency everytime
  • #1,215
  • Jan 9, 2014 2:15pm Jan 9, 2014 2:15pm
Quoting venzen
{quote} Great analysis and options array! We don't have much clarity about the likely path it will take and how deep any correction. As for for your comment about currencies in triangles I like that and agree. Bitcoin is dual character - both currency and commodity - you addressed both As for anything below current levels - i feel that only a fundamental catastrophe or design flaw coming to light could destroy Bitcoin (and eventually it will). What I interpret the current correction to be is vanilla-flavoured pullback below the $1000...
I do not trade Bitcoin yet. My goal was to load the boat when Bitcoin was low. As I stated before, I waited for around 60 USD, when price made a 180° turn and ran away from me

When I buy Bitcoins, I do it without leverage (the swings are wide enough for me LOL) in the future
  • #1,216
  • Edited 2:32pm Jan 9, 2014 2:18pm | Edited 2:32pm
Quoting infinitus
{quote} sorry to say: you are part of the Mania, already. Tulips, everywhere Tulips LOL Just teasing........ But seriously: what will all this "late to the party people" think and DO, when price collapses towards 100? Even when we two agree, that such a drop may only be a blip for Bitcoin history, most people will jump off the "sinking" ship. Have you, for example, heard about the blockchain-size problem? Now the whole blockchain size is around 13 GB. The blockchain has to be shared with every node. In about three years, this blockchain size will...
That's really interesting, i should probably wait and process those info before answering, but for now, my 2cents :
Within 3 year, 1tb could be the same as the 13gb of today or what was 1gb 3 years ago. Doesn't Bitcoin, by itself already pushed to great improvement in GPU with asic ? T1 and T3 fiber optic internet, nano hard drive, 1tb probably won't be much in 3 years.

Plus i don't know, but this tulip thing, I can't do much with a tulip, even 377 years ago, they surely are very much pretty but much useless. Even, sorry to say, gold and silver are pretty useless. With the coming generation of 3d printer they probably won't have much future as a precious metal, even less use in other industries. Ceramics, carbon isotopes and -used to be rare- metals will be the future. As for the value of gold as a backing for currencies, well, I'm sure that the current state of politics in the western countries are doing a great job at ruining it.

Concerning the security of bitcoin, that's a bit above my pay-grade but it seems that even a supercomputer would be able to get 51%, they don't really decrypt code faster, they would decrypt more complex code as fast as simple one.


PS : and waow, one person just bought 518btc on gox.. And a switch in order book. Good start for a wave 5 up ?
Also I'm gonna look into your charts Venzen, I'll comment on them soon.
  • #1,217
  • Jan 9, 2014 2:32pm Jan 9, 2014 2:32pm
Quoting infinitus
{quote} sorry to say: you are part of the Mania, already. Tulips, everywhere Tulips LOL Just teasing........ But seriously: what will all this "late to the party people" think and DO, when price collapses towards 100? Even when we two agree, that such a drop may only be a blip for Bitcoin history, most people will jump off the "sinking" ship. Have you, for example, heard about the blockchain-size problem? Now the whole blockchain size is around 13 GB. The blockchain has to be shared with every node. In about three years, this blockchain size will...

lol... you... you!

Mainstream adoption is yet to happen IMO. What drove price to 1000 was early adopters in the shadow of Silk Road and media articles saying Bitcoin was the enabler of money laundering and child pornography. Now that CNN and Business Week, The Economist, and Bloomberg are running Bitcoin covers and "What is Bitcoin" features, the herd will come onboard. Assymilation as an online payment method will surely drive the value up? Nevermind removing the barriers to actually purchasing Bitcoin with USD or EUR - that will surely see a steady trickle for wave 3 (of whatever larger degree).

blockchain at 13GB - unwealdy, yes - and at 1TB, implausible. I currently run a Bitcoin wallet on my Android device which has the bulk of the blockchain stored with the wallet provider and only those blocks that contain transactions involving my wallet address are downloaded to my phone. This is clearly the way forward in terms of storage. Whichever way we cut it, there are going to be additional issues. The nemesis of Bitcoin being it's NSA designed encryption and eventual usurping by the US govt. But the successor is already being designed somewhere. yet as things stand now Bitcoin is a brilliant idea and and both Wall Street and Silicon valley have taken the bait with tacit US regulatory agreement. Australia, Belgium, Denmark, Argentina, today Singapore - more and more governments are codifying cryptocurrency into the monetary policy and passing relevant Tax laws, etc.

Being able to shift $1000 or $1mil securely, instantly and out of sight of bank, government and taxman is surely a plus. But I am not a fan of holding Bitcoin as a value store - its utility to me is the hyperactive chart and some other short-term benefits that my country has yet to regulate on
cryptocurrency everytime
  • #1,218
  • Jan 9, 2014 2:43pm Jan 9, 2014 2:43pm
Quoting lady_luck
{quote} That's really interesting, i should probably wait and process those info before answering, but for now, my 2cents : Within 3 year, 1tb could be the same as the 13gb of today or what was 1gb 3 years ago. Doesn't Bitcoin, by itself already pushed to great improvement in GPU with asic ? T1 and T3 fiber optic internet, nano hard drive, 1tb probably won't be much in 3 years. Plus i don't know, but this tulip thing, I can't do much with a tulip, even 377 years ago, they surely are very much pretty but much useless. Even, sorry to say, gold and...
well, assuming that technology is able to handle a 77-fold in data in just 3 years seems to stretch Moore's law a bit, I think.

Now we can discuss, if Moore's law is applicable here......



Regarding the tulips: it was just a joke, analogy etc for another Mania


If you think that the world will change all of their habbits and thinking (especially regarding Gold, especially regarding socio-economic, socio-psychologic) you are welcome to buy all the Bitcoins you can afford to buy and even more - just sit out the randomly occurring draw-downs


Tegarding the buy of 518 Bitcoins on Gox: do you think that is significant?


And further more: why do you feel the need to start this rather polemic discussion? Inquiring minds want to know......
  • #1,219
  • Jan 9, 2014 2:48pm Jan 9, 2014 2:48pm
Quoting venzen
{quote} lol... you... you! Mainstream adoption is yet to happen IMO. What drove price to 1000 was early adopters in the shadow of Silk Road and media articles saying Bitcoin was the enabler of money laundering and child pornography. Now that CNN and Business Week, The Economist, and Bloomberg are running Bitcoin covers and "What is Bitcoin" features, the herd will come onboard. Assymilation as an online payment method will surely drive the value up? Nevermind removing the barriers to actually purchasing Bitcoin with USD or EUR - that will surely...
You say, that the crowd is coming on board now. But I can not see it in the volume print. For me just now a sucker rally.
  • #1,220
  • Jan 9, 2014 2:50pm Jan 9, 2014 2:50pm
Quoting lady_luck
{quote} That's really interesting, i should probably wait and process those info before answering, but for now, my 2cents : Within 3 year, 1tb could be the same as the 13gb of today or what was 1gb 3 years ago. Doesn't Bitcoin, by itself already pushed to great improvement in GPU with asic ? T1 and T3 fiber optic internet, nano hard drive, 1tb probably won't be much in 3 years. Plus i don't know, but this tulip thing, I can't do much with a tulip, even 377 years ago, they surely are very much pretty but much useless. Even, sorry to say, gold and...
exactly, Moore's Law - and I just had a thought about deddicated blockchain services that serve blocks on demand from the cloud - kind of like what blockchain.info does but in the field of user wallets (like the Android Bitcoin wallet) and business wallets which will get hefty for sure. Necessity is the mother of invention and innovation creates upward spirals.

I've been so enjoying the conversation with infinitus that I haven't looked at the charts! I see we're making good upside and it will be interesting to see what happens at $850 (BTC-e) - that is potentially the top of a wave e OR the launchpad for wave 3 from Tueday's low.

I like your view on PM's - these metals are relics and have some industrial use which is great. But they are losing relevance as stores of value. I mean $20 an ounce of Silver - it's just silly calling that a "precious metal". And OK Gold is most likely going on a rally to $2,250 but then it must return (by EW) to sub-$1000 levels in a protracted decline. I don't know if anyone has ever tried to use a Gold coin in an actual barter - people like the idea of Gold as currency and luxury - but when push comes to shove they want cash - especially in the village market places of this world - there is just no way of verifying that Gold is real or pure.

NSA quantum computing - for sure they're going to win the war to own the blockchain. But freedom lovers everwhere will move to the next cryptocurrency - another reason not to get attached to the thing itself but to exploit it's utility!
cryptocurrency everytime
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