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Category Archives: Bitcoin Futures

Bitcoin Intraday Rally Update

This is the February contract. There is so little interest any any of these futures contracts that I may come to a point where I no longer can provide decent wave counts. If this doesn’t improve soon I may be forced to stop wave analysis on these charts. In the last day or so, the total Cryptocurrency capitalization base has  gained back about $156 billion. The total Crypto ICOs are sitting at 1448  with no change today.

You may have noticed I used a “W” wave in Intermediate degree, which I will use just as a temporary unknown position. I want to stress the fact that when I use any WXY thinking, then the “W” wave I use has a very strict rule. This rule is that any first “W” wave we think we see “Must” be a single zigzag!  It can’t be a flat,  as a flat would tell us that we are somewhere in a diagonal wave structure.

The Gold/Bitcoin ratio also crashed in a spectacular fashion, making Bitcoins very cheap when we use the gold cash price to compare to. Just the shear fact that this Gold/Bitcoin ratio crashed is sending Bitcoin prices northward, at least in the short term.  Will we get another zigzag type bullish phase?  This is very uncertain at this time. In the bigger scope of things the Crypto meltdown is what happens when a perceived asset class gets out of control.

Crypto Crash! Bitcoin Sinking To New Lows

Early this morning Bitcoin futures chart plunged to a new record low of 11,900. There should be more downside coming, but so far it has been a choppy decline that looks like it may be a diagonal “C” wave. Usually there is a much bigger pattern difference between the “A5” wave and the “C5” wave.  For all this Bitcoin Mania to be in this true blue price bull market that so many claim is going to happen, we need a strong visible zigzag or flat correction.

I won’t even throw out the triangle pattern as any correction will just about do. Sure, a big jump could happen at any time, but Bitcoin seems to be on a downward spiral that nobody knows when it will end. Cryptocurrencies are being attacked around the world so I can see the lack of bullish enthusiasm for the Bitcoin price.

What happened to buying on the dips of this no brainer bull market? After all, isn’t the Bitcoin price supposed to go to a $1,000,000?   Back in the 70s the experts were all forecasting the $2000 gold price, yet it never reached that price level. Instead gold turned into a 20 year bear and a crushed price.

Investors didn’t learn anything at that time and they sure did not learn anything this time.  Most price forecasts are a figment of one’s imagination, as they are just numbers picked out of thin air.

A quick scan of my Crytocurrency list shows the “majority” of all the Cryptocurrencies took major price hits this morning as well. It’s not just a Bitcoin problem.  There are 1450 cryptocurrencies posted, with a total market capital soaring to over $720 billion US dollars. Well, this morning about $140 billion of it went up in electronic smoke. All those investors that just borrowed money to jump into this mania are now holding worthless paper. We can’t even call cryptocurrencies  “paper”, but it still took paper dollars to buy into digital coins. In todays world, it’s electrons that go up in smoke much easier than paper can, at least with paper dollars you can use it as toilet paper once it crashes. These numbers are changing very fast as latter this week $200 billion could be lost. There is a lot of money somewhere in the “Lost and Found” department. Good luck finding it as the, “Pot Of Gold” at the end of the Rainbow contains no digital coins.

Bitcoin Still In A Bearish Phase.

Bitcoin’s price surge looks more like Amazon.com than Pets.com – MarketWatch

There is never any shortage of wild optimism in stories about the perceived Bicoin bull market. The perception that Bitcoin is going to soar is misplaced, as the charts tell us the opposite could be happening. South Koren clampdown on Crypto trading has certainly helped to keep a lid on Bitcoin prices.

CryptoWatch: Cryptocurrencies see $100 billion hit amid South Korean clampdown – MarketWatch

Meltdown and Spectre: what you need to know – Malwarebytes Labs | Malwarebytes Labs

With the recent discovery of chip vulnerabilities, across all  platforms, including Apple products. I consider this a huge issue as Meltdown and Spectre seems to allow direct access, to the ram memory of many devices.  I understand it’s a chip problem and many are scrambling to find a fix.

All I can say is, “stay on top of your updates, and update as soon as they are issued”.

My two parallel lines box in a diagonal move, complete with an expanded wave 4 counter rally. I switched this sideways pattern to a potential 4th wave counter rally with the 5th wave presently in progress. This present counter rally could drop like a rock as another zigzag needs to complete the 5th wave. On the count above, I skipped one wave and only labeled the second wave structure in a sequence. When this breaks to the downside we should be getting close to a new wave 1 but in Minuette degree.

Once that is actually confirmed, then we should expect another counter rally that can come back hard, as the bears get into another bear trap. From nearly $20,000 per Bitcoin to our present $14,000 price level, billions of Bitcoin value disappeared in an electronic puff of smoke.

I was dead wrong about new ICOs slowing down, as they took a rest during the holiday season. In the last week ICOs came back with a vengeance.  Hackers and crooks are attacking many Crypto exchanges and billions of Bitcoins disappear. The example of Cryptos taking a $100 billion hit is an example how Bitcoin value can disappear

There are presently 1408 cryptos out, with more still coming. The total capital of all Cryptos just surged past the $700 billion milestone and it sure still seems to have momentum behind it. At this rate the total capital will soon hit a trillion US dollars. Even $700 billion is impressive, which is pretty good for something created out of thin air.

The last thing I will do is create any intraday trade setups as this is what the majority are already doing. Anybody can create mindless numbers and letters in a computer, but knowing what they mean is a different ball game. From my perspective when the EWP is just used for short term trade setups, means they have no clue where the bigger trend is heading. I believe this is a very inefficient use of the EWP.

Bitcoin Intraday Swan Dive Update.

After a near perfect double top, Bitcoin succumbed to the bears and proceeded to implode. How deep Bitcoin can crash down on this trip remains to be seen, but if the inverted flat has any teeth to it, then the $11, 500 price level will not provide any long term support. All these Cryptos are used for speculation, and it’s only extreme leverage why these Cryptos make such wild moves. I’m not against any speculation, but when markets go down, they produce all sorts of fears. When fear dominates, then irrational decisions become obvious.

Last year saw a massive explosion of different Cryptos coming online, but early in 2018 it seems like new ICOs issues have hit a brick wall.  The last number to beat is 1385, related coin offerings. It will remain to be seen if 2018 remains bullish with many more ICO offerings, but sooner or later the weeding out process will start.

It’s still far too early, for any Gold/Bitcoin ratio calculations to be taken seriously, but spot checking the ratio every few weeks will help.

Bitcoin Intraday Bullish Phase Update

Bitcoin has now moved well past any potential 4th wave rally in Minute degree, which means we have to start another wave count but from a different peak.  Could this present rally turn into the next bullish phase up? It could, but if that’s the case, then we have a long way to go with Bitcoin staying within the two trend lines.

It’s pretty hard to keep bulls caged up just by drawing pretty trend lines, but for any bearish move to continue, the bottom trend line must get sliced.  Also, any $11,500 price level will never hold, as bearish moves always need lower lows, to keep the Bitcoin bears happy. Even now, Bitcoin can produce another major double top, just to make it more miserable to count waves.  Volumes are not really exploding, so interest in Bitcoin futures is not exactly the greatest thing to get all excited about.

From my perspective, Bitcoin and all other Cryptos are just speculative asset classes, that many are calling Bitcoin an “investment”.  Any currency is just a medium of exchange to measure and compare, like any desktop ruler or measuring tape. Buying or owning a bunch of “rulers” has no intrinsic value. Sure, we can have numbers on these currencies, but in reality currencies are constantly shifting in value, but the numbers on the bills never change.

When currencies implode,  they just print something with an extra zero in front of the decimal point, and the semi full of cash can now fit into your basic wheelbarrow.  The longer Bitcoin takes in developing a new direction, the more impatient Bitcoin traders will get.

As of this morning there are now 1384 Cryptos on the list, and when new Crypto issues start to slow down, then this list should stop growing as well. The worst case scenario would be that the Crypto list starts to shrink or stagnate. This week I noticed the first possible sign of stagnation, but that could be just due to the holiday season or even a misprint.  I would like to have more evidence of this potential stagnation, which still could take weeks to clear up.

It now takes 12.26 gold ounces to buy one Bitcoin, which compressed a bit, from the 15.9:1 ratio I once calculated.

Bitcoin Futures Update

So, you think that the Bitcoun bear market is over? Short term you may be right, but we could also just get the next leg down. This is the Cobe Bitcoin futures and until more volume shows up in the CME Bitcoin futures, I will stick with the Cobe futures charts. On December the 22nd, Bitcoins bottomed at $11,300, and have now surged back to a $16,500 high.

If the bearish scenario remains true, then this $16,500 price level should hold. Since the peak we had a $9000 drop in 5 days, followed by a $5000 rally in 5 days. This does not sound like a stable platform for any real world application, except for speculation. I will not keep a running wave count, but may wait until short term extremes are reached.

This Crypto Mania thing,  is nothing but pure speculation, and we have been warned over and over about the risks involved.

Heed Warren Buffett’s warning: bitcoin is pure FOMO – MarketWatch

Warren Buffett has been warning us about Bitcoin, and he has seen many Manias in his lifetime.

SEC.gov | Statement on Cryptocurrencies and Initial Coin Offerings

The SEC is also warning us about the Cryptocurrency Mania.

The biggest fraud that Bitcoin hype artists are making is that Bitcoin has “intrinsic value”! Bitcoin started out worthless and I’m sure that one day it will return to a “worthless” condition. The crazy notion that, “it’s different this time”, is all pure bullshit.  There have been many “Manias” in the past, and this Bitcoin Mania has a very close resemblance to the Dotcom Mania of the late 1990s.

There are now close to 1373 Cryptos on the list, and I don’t see that slowing down anytime soon. When it does, then the weeding out process will start and this crazy Crypto list will start to shrink.

At one time it took close to 16 gold ounces to buy one Bitcoin, which is now sitting around 12.2:1. We have no way of knowing what the extreme cheap side of the Gold/Bitcoin ratio can get to, because this could all just be a, “One hit wonder”. Bitcoins could end up with a flat line, like the Tulip prices did back in the early 1600s.  The cheap ratio I do have is about 1.74:1 which is a far cry away from any 12:1 ratio that we have now.

Bitcoin Crash, Gold 2.0 Myth Busted

I increased the degree level to where the start is now a Minute degree. During the last 5 days Bitcoin crashed about $9000 and has now recovered a bit. From my perspective, I have not run into a set of good looking declining 5 waves in a very long time. Any little 5th wave acted like a diagonal, which makes Bitcoin wave counting an excellent experience. There could be more of this counter rally to go, but sooner or later the counter rallies will get bigger and take longer to play out.

I started the 1-2, 1-2, 1-2 count quickly, and so far have not had to change it, but may have to at a later date. Three sets of visible 1-2 waves will certainly give us a wave three extension, until the next 5th wave decline starts. If the last  5th wave contains many choppy wave structures, then that will help to confirm a new higher degree will be forming. Also, any 4th wave triangle that may form will also help in confirming our location.

Bitcoin plunges again, now down more than 28% since Sunday’s all-time high – MarketWatch

Unless I can see a clear zigzag or flat starting to set up, there will be no telling how deep Bitcoin can crash. We heard the stories about the myth that Bitcoin is Gold 2.0 which has now been exposed as pure bullshit. At one point $200 billion worth of Bitcoins evaporated in a puff of electronic smoke.

This Bitcoin crash changed the Gold/Bitcoin ratio form a peak of 15:1 to a bit under 11:1. This is not even close to the 3:1 ratio we did have at one time. Also, there is no guarantee that Bitcoin will ever rise from the ashes again.  At a 3:1 ratio Bitcoin would have to fall to $3800 USD, which is very close to the cost of mining one Bitcoin.   As of today, the Crypto count is about 1377, with no end in sight just yet. When the list stops growing or even starts to shrink, then this Crypto party is over.

Below, we look at gold and how it reacted to the Bitcoin crash during the same 5 days.

Gold, dipped a bit, but in most part gold completely ignored the crash of Bitcoin. Gold kept chugging along, pushing higher every step of the way. I think gold has more room to make gains in the short term, but it’s starting to form a nice spike on the daily charts.  I didn’t touch my bigger wave count as I just couldn’t find a more convincing alternative at this time. Either way this gold bull market has a long way to go in time, and price.  It’s not the top projected price that’s important, but the mood that will be present, is far more important. Also, the Gold/Hui, and gold ETF ratios should become very expensive.

Bitcoin, Breaking Records On The Way Down

They use the Cobe futures contract for the CME Bitcoin futures. Each contract contains the price of 5 Bitcoins and is always the cash settlement price. They never have to take delivery once the contract expires.

I believe it is the secondary top, that I have that is the real top, followed by a declining  set of 5 wave sequences. I always start with my smallest degree level, which now contains a Miniscule set of 5 waves. Miniscule degree is the bottom of the barrel from a degree stack of 15. I can adjust the degree levels up or down if need be, but right now we would be heading down to a wave 1 in Minor degree which still could take weeks.

Any wave count I produce is strictly experimental in nature, but practicing in counting 5 declining wave structure is like a warmup for the stock markets when they start on their journey south.  I am not an expert on Cryptos by any means, but not counting a declining mania, is too hard to pass up. The new record low that hit this morning is 15,380. We have a long way to go, and at some point in time the pattern must form into a zigzag, flat or triangle “If” another big leg in Bitcoin is to happen.

Bitcoin created all sorts of records on the way up and now is set to make new records on the way down. Either way, we have the potential bursting of Bitcoin Mania,  or it’s just a huge correction. The next weeks and months will tell us more as Bitcoin price moves are very sensitive at this degree scale.

Bitcoin Mania Review

I have no plans to give my readers trade setups regarding any Cyryptocurrencies as there are over 1369 Cyrptos like ICOs out already. Whoever names these asset classes, is very creative as it even puts the Dotcom naming to shame, during the late 1990s tech boom.  In any new Crypto like product launch, it brings out the crooks and scammers, to the point where the FCC is overwhelmed with cases and no longer allows trading, until it has time to investigate.

Without the bull market in the tech sector, this Crypto craze would never have started. If the Nasdaq starts with its huge bear market, I don’t think that these  Bitcoin mining companies will keep going up in price.

I created this wave position last night, but never published it until this morning.  Even though Bitcoin made a price jump, I did not have to change my wave positions. I believe that the spike to $20,000 is not the real top, but that the secondary peak of $19,650 is the real top.  All the wave counting in the world will make no sense if we don’t have a specific position to count from. I realized very early that using a higher degree in any Crypto currency,  gives us a false picture as to the size and scope of this potential bull market.  We are lucky to be anywhere near a wave 1 peak in Intermediate degree, but worse yet Bitcoin could implode and turn to digital dust, joining all the other failed attempts in the digital graveyard.

I call the top a wave “Zero”,  as this could be the  potential start of a Bitcoin bear market.  We don’t know what the Gold/Bitcoin ratio can still do, but two readings were pushing over 15:1. Would you buy one Bitcoin with 15.1 ounces of gold?  Gold has intrinsic value, and is a medium of exchange, which no currency in the world can provide. 10 years from now, what do you think will still be around, Bitcoins or Gold?

Since the list of the new ICOs has exploded, I think it is important to watch this list for when it stops growing, and actually starts to shrink. I’m sure there still has to be a huge,”weeding out” process to come and until we know who is left standing, anything can happen.

CME Launches Bitcoin Futures Contracts

 

Cryptocurrency and futures speculation is very risky due to the extreme leverage that many futures contract have. The opinions expressed are strictly personal and are not to be considered as any “Buy” or “Sell” recommendations.  Any Elliott Wave positions I show are strictly a best guess, as it could take many years before any real wave pattern could emerge. At this time I know very little about the specs on these contracts, but they contain 5 Bitcoins per contract.

When Bitcoin futures spiked to $20,000, the contract had a $100,000 US dollar value.  For every $1 that one Bitcoin moves up or down, the futures contract jumps up or down by $5. There are stiff margin requirements, especially  when shorting. The good news is that it’s all based on cash settlement prices, which has no underlying impact on Bitcoin prices.  I have no idea how much leverage that they use just yet, but a general reference point would be 5:1 or the price of one Bitcoin.

I will not make Bitcoin commentary a big thing as there are still huge problems with most Cryptocurrencies. The chart below is a bit longer than 5 days old, so any degree levels I do have are very small.

 

As we can see, the volumes have been extremely low with a huge surge going 300 in a matter of minutes. What we did get tonight is another huge spike to the upside, leaving a huge gap in its wake. Due to the low volume overall, we could get many more gaps open up everywhere. Until this fills out more all gaps will mean little in the big scope of things.  The SP500 also spiked along with Bitcoin futures, but that also can be brushed off as a coincidental event.

When I calculated the Gold/Bitcoin Futures ratio, it worked out to about 15.4. It took 15.4 gold ounces to buy one Bitcoin. Only once have I recorded anything higher. Still,  we really don’t know where the Gold/Bitcoin ratio can max out at, so we really don’t know if it is in a price bubble even at $20,000

There are currently 1361 Crypto currencies out as of today, but I would expect for the amount of Cryptos to keep growing in the near future.

All Cryptocurrencies | CoinMarketCap

When they stop flooding the markets with Crypto ICOs, then we may get close to our first washout stage.