As we said yesterday, when the sentiment is getting skewed to one extreme, the market will turn.
One way how it is possible to notice, is a growing number of estimations. In our case how low can ETH fall.
(from our post yesterday) —> As we see more and more often the estimation of ETHBTC going far lower (they say at least “0.01”), we know we are close to the turn. It is now somehow almost a “known” fact that the drop further to at least 0.013 is “sure”.
So, the turn did take place. Or did it ?
Today we want to start with a Bitcoin chart. Short-term one
This almost vertical drop is exactly how the 3-d of the 3-d Elliott Wave looks like. Violent and even scary. Is it finished? We don’t think so. We expect two more lows and then the 5 waves move can be considered as finished. There must also be some kind of mental capitulation too.
Time will tell (and this is not a long time. one or maximum two days) if we are witnessing here the turn down for BTC.
Now let us come back to ETH. These two (ETH and BTC) are very strongly correlated at the moment. It doesn’t have to stay in this way all the time, however. Moreover, it will most probably change at some point. But for the moment if one goes down, another one starts growing.
We still prefer, however, looking into the charts and price actions of every market separately. And what do we see in ETHBTC in regards of some Elliott Waves patterns?
The pattern on the short-term doesn’t doesn’t seem to be finished yet, so we’d rather show the mid-term picture:
If our Elliott Waves count is correct, then the move down is finished. Under this count ETHBTC has nothing to do below 0.01510
Do we have an alternate count? Yes, we have:
If that is what market is preparing for us, then the further development would be:
How probable this outcome? We would give it 40 % at the moment. So much because the sentiment at the bottom wasn’t as fearful as we would like to see it. In case we do make the new low below 0.01510, then the sentiment will definately reach a point where quite some people will start doubting if Ethereum is going to survive at all. (May be even some news will come out which will support this point of view). And as little as 40 % because the internal structure of the 5 waves move (a) far from being perfect. It still looks much better as a combination of three waves moves.
Regarding the bad news. They can also come at any time during this initial rise from the last low.
So, stay tuned. The price action in the next week will be interesting to see.
It will also be exciting to see how the market will react to the so long-awaited Slock.it ICO, which is actually now is called “DAO Creation” and isn’t Slock.it only anymore. For those who is still unaware what is happening here, highly recommended to visit at least this site – http://daohub.org. There is also this nice discussion on reddit (there are much more available) – https://www.reddit.com/r/ethereum/comments/4goyix/the_dao_a_rebel_without_a_cause/
We hoped you enjoyed reading this a bit longer version of our regular Elliott Waves Analysis for Ethereum.
We feel like the friday is a good day to publish the next one.
Take care and learn (as we also do) from the market behaviour directly. The more you understand the market, the better and better decisions you can make.
The Elliott Wave Principle describes the behaviour of the financial markets. This Principle is build on the mass psychology swings from pessimism to optimism and back in a natural sequence. When these swings happen, the specific Elliott wave patterns in price movements are created and become visible. Each pattern has implications regarding the position of the market within its overall progression, past, present and future.
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