• Press Releases
    • Submit a press release
    • Read All
  • Advertise
  • Contact us
Crypto.com Logo Crypto.com Logo
Bitcoinist.com
No Result
View All Result
  • Bitcoin
    • News
    • Price
    • Businesses
    • Acceptance
    • Technology
    • Investment
    • Regulation
    • Reviews
    • All Bitcoin News
  • Altcoins
    • News
    • Price
    • Ethereum
    • Ripple
    • Litecoin
    • EOS
    • NAGA
    • All Altcoin News
  • Tech
    • Blockchain
    • Security
    • FinTech
  • Industry
    • Press releases
  • Price
    • Bitcoin Price
    • Ethereum Price
    • Litecoin Price
    • Binance Coin Price
    • Monero Price
    • MimbleWimbleCoin Price
  • How to
    • Buy gift cards/mobile Top Ups with Cryptos
    • What Is Bitcoin?
    • Best Bitcoin Wallet
    • Bitcoin vs Ethereum
    • Why Use Blockchain Technology?
    • Bitcoin Cash ABC vs. Bitcoin Cash SV
    • How to Buy Cryptocurrency
    • Bitcoin Mining
    • Best Bitcoin Brokers
    • Best Bitcoin Forex Brokers
    • How To Earn Bitcoin
    • What is Facebook Libra?
    • Ripple and XRP: The Complete Guide
    • Bitcoin Casinos – Where, What and How to Play
  • Play Games
  • BET&WIN
  • Bitcoin Casino Reviews
  • Bitcoin
    • News
    • Price
    • Businesses
    • Acceptance
    • Technology
    • Investment
    • Regulation
    • Reviews
    • All Bitcoin News
  • Altcoins
    • News
    • Price
    • Ethereum
    • Ripple
    • Litecoin
    • EOS
    • NAGA
    • All Altcoin News
  • Tech
    • Blockchain
    • Security
    • FinTech
  • Industry
    • Press releases
  • Price
    • Bitcoin Price
    • Ethereum Price
    • Litecoin Price
    • Binance Coin Price
    • Monero Price
    • MimbleWimbleCoin Price
  • How to
    • Buy gift cards/mobile Top Ups with Cryptos
    • What Is Bitcoin?
    • Best Bitcoin Wallet
    • Bitcoin vs Ethereum
    • Why Use Blockchain Technology?
    • Bitcoin Cash ABC vs. Bitcoin Cash SV
    • How to Buy Cryptocurrency
    • Bitcoin Mining
    • Best Bitcoin Brokers
    • Best Bitcoin Forex Brokers
    • How To Earn Bitcoin
    • What is Facebook Libra?
    • Ripple and XRP: The Complete Guide
    • Bitcoin Casinos – Where, What and How to Play
  • Play Games
  • BET&WIN
  • Bitcoin Casino Reviews
Bitcoinist.com
No Result
View All Result
Nexo

Can Elliott Waves Really Predict the Price of Bitcoin?

Bitcoinist by Bitcoinist
8 years ago
in Bitcoin, Knowledge Base, Markets and Prices, News, News teaser
0
Advertisement

Elliott Waves are a popular yet controversial technical analysis indicator. This post will explore the relevance of Elliott Waves for bitcoin trends.

Introduction to Elliott Waves

Elliott Waves are a technical analysis indicator to predict future price trends. The principles of Elliott Waves are founded on the belief that markets follow predictable sequences of optimism and pessimism.

5 BTC + 300 Free Spins for new players & 15 BTC + 35.000 Free Spins every month, only at mBitcasino. Play Now!

The sequence of a bull market follows the below pattern. A bear market follows an exact opposite sequence. To learn how to apply Elliott Waves,watch this tutorial by DanV, a very popular Trading View bitcoin chartist.

Bitcoinist_analyses

In a market largely driven by psychology and speculation, one can expect Elliott Waves to be applicable to bitcoin. However, Elliott Wave theory was developed in the 1930s to predict stock prices — can it really be used to predict the price of an asset that would have been inconceivable to the creator of the theory?

BitStarz Player Lands $2,459,124 Record Win! Could you be next big winner?
Get 110 USDT Futures Bonus for FREE!

This post will analyse the suitability of Elliott Waves for bitcoin traders wishing to get ahead of the market.

Statistical validity

In 2001 an eighteen month study was led by a programmer and market trader called Rich Sanwell. The aim of the study was to determine which patterns worked, and whether the overall principle of Elliott Waves could be proven to be accurate predictors of market trends.

What is the best crypto casino in July 2022? Read our comprehensive comparison! We made deposits, played and reviewed 80+ crypto casinos to choose the best one.

The key findings were:

  1. Elliott Wave, as a theory, was statistically sound. This means that market movements can be predicted using sequences of investor psychology.
  2. However, in 65% of assets, Elliott Waves were deemed too unreliable to be used for trading predictions. Therefore, to be successful with Elliott Waves, a trader must find one of the 35% of assets that move according to patterns outline by the general principles of Elliott Waves.
  3. Those assets likely to follow Elliott Wave sequences have lots of liquidity/volume and are clearly influenced by greed/fear cycles. The Dow Jones matches this criteria and has been famously predicted by Robert Pretcher with Elliot Waves:

Bitcoinist_predicting the price of bitcoin

 

 

 

 

 

 

 

 

 

 

Thus, a bitcoin trader considering using Elliott Waves must question whether or not bitcoin can be classified as ‘liquid’, and whether or not the price is driven by investor psychology.

Does bitcoin have enough liquidity for Elliott Wave analysis?

Unfortunately, no hard number has been set to define what level of liquidity is required for an asset to be predictable with Elliott Waves. However, Steven Poser, Vice President in the Strategic Analysis and Market Data Group at NYSE Euronex, writes in his Elliott Wave book:

“shares of companies that trade by appointment must be avoided… there must be a crowd for technical analysis to work properly.”

According to this definition, yes bitcoin does have sufficient liquidity to apply Elliott Waves and other technical analysis tools. An evidence of this liquidity is the ease and speed of opening/closing position on exchanges using BTC.sx.

Bitcoinist_price_chart
Now one must consider the question of investor psychology.

Is bitcoin driven by greed/fear cycles?

The short answer to this is: mostly yes.

Bitcoin appears to go through periods of relative stability and then enter a phase of parabolic growth, followed by a sharp correction. This correction ends at a level higher than the pre-hype price, after which the cycle eventually begins again.

This is a textbook greed/fear cycle and a simple chart comparison shows a high degree of fit:

Price_chart_Bitcoin_Bitcoinist

Price_Bitcoin_Bitcoinist

However, one must appreciate that the price of bitcoin is also influenced by mining difficulty and supply.

If the price drops low, eventually it becomes unprofitable to mine (as miners must pay for equipment and electricity bills). Consequently, supply is reduced and the price goes up.

If the price rises too high, there is a large profit to be made mining. Consequently, more people start mining, increasing supply and lowering prices.

Despite this, investor psychology appears to have a much larger influence on bitcoin’s price.

Now that is established that, in theory, Elliott Waves can be used to predict bitcoin’s price, let’s take a look at whether this is possible in practice.

Has anyone accurately predicted bitcoin’s price with Elliott Waves?

Theory and practice are very different things. And only the latter will generate profits.

To assess the real-life returns traders have made from Elliott Waves, the only accessible data are Trading View charts. These allow traders to make predictions, and then chart the price movement against these predictions. Thus, greater accuracy should equate greater profits — assuming the chartist is honest about their prediction.

The most respected bitcoin trader on Trading View is DanV. DanV also happens to like Elliott Waves. Hence, if anyone can make a profit trading bitcoin with Elliott Waves, it is DanV.

But his past charts have mixed results:

https://www.tradingview.com/v/qm7cnu9V/

Price-bitcoinist

Conclusion

In summary, it is possible to predict market trends with Elliott Waves for some assets. Although no formal study has been done, it is likely that bitcoin falls within the 35% of assets that can be analysed accurately with Elliott Waves.

However, Elliott Waves is a difficult concept to apply in practice. As a result of this, it remains very challenging to make a profit trading bitcoin with Elliott Waves alone.

Investopedia describes the difficulty of using Elliott Waves nicely:

“There is a standard joke shared by technical analysts that if you were to put twelve Elliott Wave practitioners in a room, they would fail to reach an agreement on wave count and the direction in which a stock is headed”

Written by:  Josh Blatchford, Chief Marketing Officer of BTC.sx

Do you think Elliott Waves Really Predict the Price of Bitcoin?  Let us know in the comments section below.

Image Sources: Josh Blatchford

Featured Image Source:  Nobert Radoki

ShareTweetShareShare

Sign Up for Our Newsletter!

For updates and exclusive offers enter your email.

I consent to my submitted data being collected and stored.
Bitcoinist

Bitcoinist

Bitcoinist is the ultimate news and review site for the crypto currency community!

Related Posts

UNCTAD, document heading

UNCTAD Wants To Curb Crypto Adoption In Developing Countries. Of Course They Do

19 hours ago
Bitcoin Crypto

Crypto Market Sees $510M Futures Flush As Bitcoin Breaks $24.5k

1 day ago
bitcoin family

“Bitcoin Family” Loses $1 Million In Bear Market, What’s Next For Them?

2 days ago
Zipmex Opens Crypto Withdrawals After Pausing Due To Volatile Markets

Zipmex Opens Crypto Withdrawals After Pausing Due To Volatile Markets

2 days ago
Bitcoin UK Based Football Club Oxford City Embraces Bitcoin As Payment For Match Tickets

Why $10 Trillion AUM BlackRock Launched Spot Bitcoin Private Trust For Clients

2 days ago
Crypto

Crypto Obsessed: Nigeria Tops Google Trends Search For Cryptocurrency Info

2 days ago

Bitcoin news portal providing breaking news, guides, price analysis about decentralized digital money & blockchain technology.

Bitcoin

  • News
  • Price
  • Businesses
  • Acceptance
  • Technology
  • Investment
  • Regulation
  • Reviews

Altcoins

  • News
  • Price
  • Ethereum
  • Ripple
  • Litecoin
  • EOS
  • NAGA

Categories

  • Blockchain
  • Security
  • FinTech
  • Technology
  • Trending
  • Breaking News
  • Press Releases
  • How to

Pages

  • Contact us
  • Editorial Policy
  • Advertise
  • Crypto Prices from Nomics
© 2022 Bitcoinist.com. All Rights Reserved.
  • Bitcoin
    • News
    • Price
    • Businesses
    • Acceptance
    • Technology
    • Investment
    • Regulation
    • Reviews
    • All Bitcoin News
  • Altcoins
    • News
    • Price
    • Ethereum
    • Ripple
    • Litecoin
    • EOS
    • NAGA
    • All Altcoin News
  • Tech
    • Blockchain
    • Security
    • FinTech
  • Industry
    • Press releases
  • Price
    • Bitcoin Price
    • Ethereum Price
    • Litecoin Price
    • Binance Coin Price
    • Monero Price
    • MimbleWimbleCoin Price
  • How to
    • Buy gift cards/mobile Top Ups with Cryptos
    • What Is Bitcoin?
    • Best Bitcoin Wallet
    • Bitcoin vs Ethereum
    • Why Use Blockchain Technology?
    • Bitcoin Cash ABC vs. Bitcoin Cash SV
    • How to Buy Cryptocurrency
    • Bitcoin Mining
    • Best Bitcoin Brokers
    • Best Bitcoin Forex Brokers
    • How To Earn Bitcoin
    • What is Facebook Libra?
    • Ripple and XRP: The Complete Guide
    • Bitcoin Casinos – Where, What and How to Play
  • Play Games
  • BET&WIN
  • Bitcoin Casino Reviews

© 2021 Bitcoinist. All Rights Reserved.

This website uses cookies. By continuing to use this website you are giving consent to cookies being used. Visit our Privacy Center or Cookie Policy.