Note: this is an expanded version of my analysis on TradingView.
Price has been moving in an upward channel since March 8, 2017 (cyan trendlines). We’ve seen two cycles of impulses (white waves) followed by ABC triangle corrections (red waves within magenta trendlines), and are currently in the second of these corrections. We’ll be using the Bittrex feed on a log-scale daily chart to compare the first impulse-correction cycle to the Fibonacci (Fib) retrace of the second impulse-correction cycle, and using a second Fib retrace to project a price pathway for a third impulse. If you’re in a rush, there’s a TL;DR section below with the most important takeaways.
The channel kicked off with an initial impulse, with waves 1 through 4 falling below the 0.768 level of the first Fib retrace, and wave 5 falling in the 0.768 – 0.618 region.
The first correction started on June 6, with the top of the triangle starting around impulse wave 5 and the bottom starting between impulse waves 3 and 4. The corrective waves all fell below the 0.768 level, with the C wave briefly piercing the bottom of the triangle on November 10, preceding the next impulse starting November 12.
Waves 1 and 2 of the second impulse began trapped in the first corrective triangle, breaking out on wave 3, which landed at the 0.5 level of the first Fib retrace, while wave 4 landed at the 0.768 level. Waves 1 through 4 of the second impulse fell below the 0.768 level of the second Fib retrace, while wave 5 fell in the 0.768 – 0.618 region. Wave 5 was repelled by the top of the channel on January 3, 2018, bouncing off the 0 level of the first Fib retrace.
The present correction started with the top of the triangle around wave 5 of the second impulse and the bottom between waves 3 and 4, while waves A, B, and C fell below the 0.768 level.
Looking at the similarities between these two cycles, it appears that they are fractal in nature, and that the near future will continue to look like the near past. The current projection shows that it will take approximately the same amount of time to complete the cycle we’re in right now as it did the last, and provides approximate timeframes for a third impulse back up to the top of the channel.
We’re presently working on the B wave of the second correction. The current projection shows that wave C will pierce the bottom of the triangle around April 27, and that price will rebound from the bottom of the channel around May 13, but continue to be trapped in the triangle until around May 17 – 18.
The current projection also shows that impulse waves 3, 4, and 5 will respectively touch the 0.5, 0.768, and 0 levels of the second Fib retrace, with wave 5 again touching the top of the channel.
Please keep in mind that these are only approximate projections based on historical patterns, that what’s past is prologue, and that these forecasts will hold true until they don’t, at which point they will evolve with market conditions.
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