Bitcoin A-E Correction

With the bullish cycle expired and the uptrend line now broken, I expect a A - E correction down to the former all time high area around $4900. This is only a model using market structure data, and so anything can happen. VPVR suggests no lower than $5100. Also news can make price move more quickly to its final destination. It should be noted that A - E patterns are usually part of a longer downtrend, but I find A - C patterns simply don't address the complexity of Bitcoin corrections.

***I'll update this thread with both long and short ideas.

If you look back at the data you will notice the A - E correction patterns Bitcoin has performed in previous corrections. You will also note that A - D are usually above a trend line set by the latest structural wave, and that E usually drops below a longer term trend line set by previous structural waves, so it becomes "extended."

If you switch to log scale, you may see that the current destination for a normal correction, E, could breach a secular bull trend line - although the major trend line is still intact. Its not clear what kind of support will be waiting down there this time around, if we even get there because of this, or if we are looking at a deep correction. It kinda boils down to game theory, but I don't reveal that kind of thinking here.

As for timing, the cycles are getting compressed, so volatility will be picking up pretty hard as we go forward. Lots of capital can be made, and some traders wait explicitly for increased volatility because more profit can be made during those times than during earlier stages of secular runs. Seeing $1000 swings will become more normal, so trade carefully. Remember that stop-losses are not guaranteed, and experienced traders know there is usually a spread to live with when using those. In other words, an automatic order could very well sell or buy at 5 to 10% above or below asking price.

Cheers and GLWT!

20 minutes ago
Comment: First idea, counter-cyclical long trade? :)