Disclaimer: This article is not intended to be financial advice. I am not a financial planner.
Long Term outlook (multi-year): Bullish. Rising in a new bull market, which started Jan 2019.
Intermediate outlook (multi-month): Bullish. Looking for support to launch a primary 3rd wave advance and resume the current bull market.
Short Term Outlook: Bearish. Expected 2nd wave correction is playing out. See chart coverage for BTC, VET, ADA, and XRP.
Launching content now after procrastinating too long. Stay tuned for a daily chart update and more in-depth content weekly. 2nd waves in Elliott Wave Theory are often deep corrections, which is a commonality with many cryptocurrency corrections. Most cryptos tend move in tandem due to the small overall market cap and nascency of the asset class. I’m predicting that most cryptoassets will correct between 32.8% and 61.8% of the recent advance. It wouldn’t be shocking if some newer, exciting names with little trading history or usage drop 80-90%. Not being negative. This is crypto. This is normal now, but won’t be forever.
Let’s start with Bitcoin – the only real “large cap” crypto as of yet.
Bitcoin
Bitcoin: Still in correction mode. In the short term, consolidating along the 10400 range given as last week’s estimate. Tagged the head and shoulders projection at 9986 and rebounded. Looking for reversal at the prior triangle if we break under blue line.
VeChain
Vechain: So far, analysis has been spot on. Scroll to compare the chart from last week with this week (originally put these on twitter). We have wave B of what looks like a zig-zag correction in place. Now in the process of completing wave C. Working our way down from a head and shoulders pattern, which fits in perfectly with the elliott wave count also. Head and shoulders projection is .0089. Looking for bottom at .008-.009 support. Target zone is support where the prior triangle corresponds with the 61.8% retracement level, and the approximate downward projection from the head and shoulders top.
Cardano
Cardano continues to follow our expected path. Still looking to correct further toward the .08 range. Extrapolating wave A gives a target of .079. Notice the steep volume decline through the end of the rally and beginnings of correction. We’re targeting right between the 50 and 61.8% retracement levels. Both are common stopping points for corrections. Overall, we have a nice, clean 5 waves up to start this bull market. The current correction, steep as it may be, should prove to be counter-trend.
XRP (by Ripple)
XRP: Our bridge currency is working lower, and has just finished the path mapped out in the first chart. Hopefully XRP’s correction is complete. If it’s not, I would look to the 18-21 cent range for a potential bottom. Given the lower volatility XRP has experienced relative to other coins, the depth of the correction may be lower as well.
For a longer perspective, the bottom chart shows a key breakout from the 2.5 year old descending trendline. This coincides with the upward 5-wave impulse, providing evidence that we have started a new bull market.
U.S. Stock Market
S&P 500: We have 5 waves up, now dropping on rising volume. How far it goes may depend on the Fed. There is significant support at the Apr/May rectangle and 50% retracement level (red line). Too early to tell if bull market is over or just getting started. If we break below the march lows, I will consider a long term bear market to be underway. Otherwise, rebounding to a new high even after a steep correction supports an ongoing bull market for at least the next several months. For now, I’m not convinced that primary wave 5 is over.
Pure speculation: The Fed will open the floodgates if we drop too far. I wouldn’t be surprised to see Trump break away and band with the Democrats to support a fiscal spending bill to support asset prices and increase odds of re-election if necessary. Something like a student loan bailout would be sufficient to launch a massive primary 3rd wave advance due to a resultant consumer spending increase from millennials.