by Nico Isaac
Updated: September 10, 2018
It's like something out of a daytime soap opera. The world's favorite "It" crypto coin was shot down last week as it hemorrhaged a massive 13% sell-off in a mere 24 hours.
According to the mainstream "police," the armed gunman was none other than Wall Street giant Goldman Sachs. Or, more accurately, a September 5 Business Insider report that Sachs was ditching its plans to open a crypto-trading desk due to "factors beyond [its] control."
Confirmed a September 6 Fortune article:
"Bitcoin Bloodbath: News from Goldman Sachs is Behind Today's Plunging Prices. As is sometimes, but not always the case -- the reason is pretty clear... The latest crash began Wednesday after the Goldman news broke, but it accelerated into Thursday."
Suspect identified. Smoking gun. Case closed!
Or, not. It's a fitting explanation -- but like other similar explanations based on market fundamentals, this one is one step behind the market. For traders and investors, it's much more important to identify price turns in advance. On that, Elliott wave analysis often is a better alternative.
On September 4 -- one day before the Sach's report broke -- our Cryptocurrency Pro Service identified a bearish Elliott wave setup on Bitcoin's price chart:
"While there is no evidence a top has been established, the pace of the rally has slowed to a crawl and that might signal it is mature. The proximity to the [Fibonacci] 61.8% retracement target sends a similar message. Weakness beneath 7229.94 would hint a reversal has occurred."
The next chart moves forward in time to illustrate the "bloodbath" that followed:
As you've just read in the analysis excerpt above, this forecast was more than just a lucky guess. The market often reverses when it hits Fibonacci price targets, plus the Elliott wave picture was showing a mature rally as early as September 4.
All market forecasting is about weighing probabilities; there are no guarantees. Yet, Elliott wave analysis will always help you see in which direction the weight of the evidence tips the scale.
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EWI's FX analysts provide intraday and daily cryptocurrency coverage. Investors who follow and trade Bitcoin, Ethereum and Litecoin can see what is most likely to happen next -- on multiple degrees and in both directions.
To our best knowledge, The Elliott Wave Theorist was the first financial publication in the world to discuss Bitcoin. Bitcoin began at a price of one cent in 2009. When it hit 6 cents in September 2010, amidst obscurity, skepticism and disinterest, our Theorist explained the digital currency to subscribers and said it had the potential to become the world's currency. As everyone now knows, Bitcoin surged to trade near $20,000 in December 2017.
Most traders get run over by big market swings. High volatility markets like Bitcoin present plenty of risks—and plenty of opportunities. EWI’s analysts keep their vigilant eyes on the waves, on the lookout for moves most people won’t see coming. Will they call every move? Of course not, no forecasting service does. But for traders excited to enter these waters, there is no better perspective available to make sense of the cryptocurrency market.