Over the weekend Bitcoin wave 2 down struck in full force. It followed the wave mapping I presented earlier almost perfectly. Time wise it was faster than expected, but it did retrace a perfect Fibonacci 61.8% of wave 1 up. Here’s my big picture chart:
Note how prices keep gravitating to that magnetic uptrend line (fat one with arrow)? When above, they fall. When below, they rise.
I believe we saw fear and capitulation selling volume on the really nothing news out of North Korea that they would enforce their laws regarding banks and Bitcoin. No kidding? Of course the media pinned this news for the selloff that we knew was going to happen already, as spelled out in the waves. Zero Hedge then proclaimed, “Cryptocurrencies Stage Dramatic Comeback After Flash Crash!”
Priceless! A great example of the psychology of waves. The media pins blame on whatever was happening at the time, then sees miracle recovery from “flash crash.” Of course readers here knew this was going to happen, and the H&S produced over the weekend gave me a target of $14,000 which happily coincided with the typical wave 2 Fibonacci 61.8% retrace. So I was 100% out of Bitcoin for wave 2, and profited playing rocketing alt-coins, then went 100% BTC on my target and what was obviously capitulation selling this morning.
So where do we go from here?
There will now be 5 major waves up for BTC. Bitcoin will outperform almost all other coins during this time. All the negative people talking about BTC not be a good currency, that it’s slow transactionally and expensive to move around. True enough, but here’s the deal… BTC is limited to a fixed quantity of only 21 million ever, and several million of those have already been lost!
Coins that come out with billions and are fast transactionally are great, but they will never be the store of value that BTC is, and they will not supplant BTC if your intention is to grow your money over time. So my take is hold BTC for appreciation as debt money implodes. Yes, we can trade alt-coins to make money, but individual alt-coins will only outperform BTC in the short run.
Does that mean others can’t have higher market caps than BTC? No. They can, but those transactional coins minted by the billions will never be worth what 1 BTC is or will be. Again, only 1 in every 500 people can ever mathematically own a whole bitcoin – that’s the math that simply cannot be ignored. So the naysayers are going to be eating crow as BTC makes a new primary high by the end of this month. Then the next target is the $40,000 range, I think, sometime in the first half of this year. And I’m sticking to my prediction that it will touch $100k before the end of the year, although may not finish there (and I do expect very large and scary 50% or more corrections along the way).
NOTHING MOVES IN A STRAIGHT LINE
Everything, and I do mean everything, is comprised of waves. Free markets move in primary and sub waves on many different levels of size. The primary direction almost always moves up in 5 waves, and corrections are 3 waves – ABC. Ever since the Bear market bottom at $10,400 we’ve been making 5 wave moves higher, and 3 wave corrections, telling us that the bear is over and a new primary uptrend has begun.
Waves are energy! Waves must pull back in order to have motion. If they don’t pull back, then they can’t move forward, they would be like a lake with a mirror smooth surface on top, no movement, no waves. If you understand the waves, then you won’t get caught up in the emotions of each, and you can observe them as an unbiased observer. This will lead to fewer mistakes and much higher profits.
I now expect wave 3 to start out rather slow, then develop speed and force as it proceeds. Why does it happen that way? Because as wave 1 up starts, it runs into the first small degree wave 2. Then it proceeds, then runs into a larger subwave wave 2. Wave 2s are the most powerful corrective waves, whereas wave 4s tend to be more flat affairs, all having to do with investor psychology (fear giving way to greed).
Once all the wave 2s are over, then wave 1 of 3 starts powerfully. Then wave 2 of 3 sets it back. Then wave 3 of 3 moves with the most force of all, shocking those who were still bearish.
Watch the psychology of wave 3 progress. We have fear and a lot of naysayers now – including those who don’t do math who think Bitcoin is going to go to zero or that it’s a tulip! Those voices will give way in 3 of 3, and by wave 5 of 5, you will hear vast euphoria with a few more voices calling it a bubble.
The bubble talk will, and is already giving way to the correct understanding that the true bubble is the Dollar. This is the reason the stock market is melting up, it IS the “everything bubble,” and it is going to lead to a change of WHO is behind the production of our money! It is also going to change the power structure of governments all over the world, supplant banking as we know it, change how multiple industries operate, displace many old companies, and this technological wave will even reveal reality and raise our consciousness.
Bring on wave 3, I’m positioned and ready! Are you?