hi emptymind, hi lady_luck,
of course no wave count can be correct - every count is almost always invalidated after the next swing shows new possibilities! But we do our best and sometimes we're right on the money...
I've also replayed "the top of wave 5 is in" scenario many times because with each passing week I have more money in this instrument so I've got to get it right or spend several months (or years) living with a hedged position - and that is just demoralizing. So here are the things that diminish (in my mind) the idea that a top has been struck (I'm going to refer to your chart emptymind, because that is exactly how I would count it - no need to repost a similar count):
1) Wave label 2 is highly likely. I'd say the only reasonable alternate label in that position can be "A" - but let's work with 2 as our preferred count. In this case the "rule of alternation" is being broken at label 4. The two corrective waves are identical in structure and proportion. OK wave 4 is smaller, but it is neither simpler nor more complex than wave 2. This is significant since consecutive corrections of the same degree must alternate in complexity. The implication is that the label at 4 is invalid since that wave structure is a repeat of wave 2's structure but smaller and therefore probably of a smaller degree.
2) We know from EW that the price reflects market participants' mood. News and fundamental data releases can cause participants to take actions based on their mood but the same news/data will not cause the same reaction every time since mood may be different. So what we have in BTC is a market that has been propelled by massive optimism and sometimes driven to extreme lows by fear of regulation and potential failure of the entire project. Right now we have a lot of good news but the news will always lag the market. But underlying all of this is the objective fact that adoption is increasing, that Bitcoin is more and more being regarded in a positive light. So a price wave driven by mainstream participation is still ahead of us... it has not yet manifested on the chart. Based on the absence of a 4th wave of adequate alternation to wave 2 and the fact that we are entering a time of wide adoption, I'd argue that we are either in wave 3 or in wave 4 right now.
3) The previous time a Silk Road bust was made, BTC made a low and then began its biggest rally to date. Today may see the same dynamic.
So based on these 3 points I am biased to the bullish side. It will be interesting to see how price action continues from here onwards.
of course no wave count can be correct - every count is almost always invalidated after the next swing shows new possibilities! But we do our best and sometimes we're right on the money...
I've also replayed "the top of wave 5 is in" scenario many times because with each passing week I have more money in this instrument so I've got to get it right or spend several months (or years) living with a hedged position - and that is just demoralizing. So here are the things that diminish (in my mind) the idea that a top has been struck (I'm going to refer to your chart emptymind, because that is exactly how I would count it - no need to repost a similar count):
1) Wave label 2 is highly likely. I'd say the only reasonable alternate label in that position can be "A" - but let's work with 2 as our preferred count. In this case the "rule of alternation" is being broken at label 4. The two corrective waves are identical in structure and proportion. OK wave 4 is smaller, but it is neither simpler nor more complex than wave 2. This is significant since consecutive corrections of the same degree must alternate in complexity. The implication is that the label at 4 is invalid since that wave structure is a repeat of wave 2's structure but smaller and therefore probably of a smaller degree.
2) We know from EW that the price reflects market participants' mood. News and fundamental data releases can cause participants to take actions based on their mood but the same news/data will not cause the same reaction every time since mood may be different. So what we have in BTC is a market that has been propelled by massive optimism and sometimes driven to extreme lows by fear of regulation and potential failure of the entire project. Right now we have a lot of good news but the news will always lag the market. But underlying all of this is the objective fact that adoption is increasing, that Bitcoin is more and more being regarded in a positive light. So a price wave driven by mainstream participation is still ahead of us... it has not yet manifested on the chart. Based on the absence of a 4th wave of adequate alternation to wave 2 and the fact that we are entering a time of wide adoption, I'd argue that we are either in wave 3 or in wave 4 right now.
3) The previous time a Silk Road bust was made, BTC made a low and then began its biggest rally to date. Today may see the same dynamic.
So based on these 3 points I am biased to the bullish side. It will be interesting to see how price action continues from here onwards.
cryptocurrency everytime