Well, what a difference a day makes, as the saying goes….Those who follow this column regularly will notice that the 8-day chart looks different today. I noticed last night that if the bull setup is expanded to begin at the end of the bear market in Jan 2015 and sized to the downturn in July of that year, the last green bar closed EXACTLY at the 5th arc. I wish I had been using this setup all along, but hindsight is 20/20 of course…
In any case, at the very end of the last column I suggested I was done with the bull trade for now. Like everyone else, I wanted to ride the wave all the way to the top, but the risk of a significant downturn was too great to justify staying long. As it turned out, that was almost the exact high at 1150. Better to be lucky than good, they say.
So, what’s next?
Long term, this is still the place to be. I will demonstrate that investing in Bitcoin is likely to be a huge win in the next few years. $5,000 per coin by 2020 is likely, in my humble opinion.This chart has a bull setup at the start of the 2013 rally. There is really only 1 way to draw this setup, and it is huge. The 1×1 angle stopped the advance in June, but price closed above the 1×1 in the recent swing high. This is significant. Also, we have a close on the sunny side of the 1st arc. As these words are being typed, price has come back to test suppport at the sweet spot of the intersection of the 1×1 and the 1st arc. My guess is that the support will hold, on a closing basis. Intra-bar, price may break below support briefly.
Having seen this setup up close, let’s zoom out so we can see where the 5th arc pair is found:This is as small as tradingview.com will allow, and we can’t see the top of the chart. The number is in the $5,000 range…
In closing, this correction will not likely be over in a matter of hours. It will take days, weeks perhaps. But when it is over, fortunes will be made – hopefully by many people in the audience.
Remember: The author is a trader who is subject to all manner of error in judgement. Do your own research, and be prepared to take full responsibility for your own trades.
Image from Shutterstock.