"I Wouldn't Touch Bitcoin, Risk of Collapse Too Big"
Bitcoin's 50% crash was not entirely unexpected

By Elliott Wave International

"Wild" doesn't begin to describe Bitcoin's price action. This spring, it traded as low as $1200. Last week, BTC futures topped $20,000.

Yesterday (December 21), in an article by newsmax.com, Elliott Prechter warned about Bitcoin's future:

Elliott Prechter: I Wouldn't Touch Bitcoin, Risk of Collapse Too Big
Thursday, 21 Dec 2017 10:38 AM

"We provided the first financial publication in the world that discussed Bitcoin when it traded at 6 cents in 2010. Amidst obscurity, skepticism and disinterest, we explained the currency and said it had great potential," says Prechter.

Today, however, he says if you aren't already in the game when it comes to bitcoin, you might be better off sitting this one out.

"Bitcoin had great potential in 2010, but not in 2018. With today's elevated prices, manic psychology and weak fundamentals, I wouldn't touch it. The risk that it could collapse is too great."

Prechter says bitcoin could prove to be as fragile as a flower, or more specifically a tulip, comparing the bitcoin phenomena to the 1600s tulip mania in the Netherlands.

Then, the next day, Bitcoin crashed (just as Prechter had warned), reaching a low of $10,400 on cash exchanges.

When powerful new technologies emerge, they attract droves of investors. We saw it with the internet sector in the late 1990s. At the time, we described it as a bubble in the making.

Obviously the internet survived the bubble--and now thrives. But many investors' portfolios didn't.

We expect the same with Bitcoin. The blockchain technology that's behind it and other cryptocurrencies holds great potential. But unprepared investors, oblivious to the big picture, will see -- and have already seen -- their positions get run over.

That doesn't have to be you. You can be among the few prepared investors who understands what truly drives price swings in the crypto market.

We have two ways to help. The Theorist continues to cover the big-picture cryptocurrency trend -- and in fact, a Financial Forecast Service subscription, of which the Theorist is a part, will continue to show you exactly how the Bitcoin bubble is a preview of the still-larger financial markets mania.

And for speculators who dare to dip their toe in these fast-moving waters, we've just launched Cryptocurrency Pro Service. It delivers daily and intraday Bitcoin forecasts, with plans to add more cryptos soon. Learn more about Cryptocurrency Pro Service.

One thing's for sure. When there's this much volatility in a market, the opportunities -- and risks -- are huge. More than ever before, you need to know what the Elliott waves are saying.

Whatever your level of interest in Bitcoin and cryptos, we've got you covered.

This article was syndicated by Elliott Wave International and was originally published under the headline I Wouldn't Touch Bitcoin, Risk of Collapse Too Big. EWI is the world's largest market forecasting firm. Its staff of full-time analysts led by Chartered Market Technician Robert Prechter provides 24-hour-a-day market analysis to institutional and private investors around the world.

Bitcoin: Here's Why the Push Above $20,000 Was in the Cards

By Elliott Wave International

Now You Can Get Bitcoin Updates Daily and Even During the Day -- and Get in Front of the Waves EWI's FX analysts now provide cryptocurrency coverage. Now, investors who follow and trade Bitcoin can see what is most likely to happen next -- on multiple degrees and in both directions. And the CME and CBOE just launched Bitcoin futures, so you can participate on stable exchanges. To our best knowledge, The Elliott Wave Theorist was the first financial publication in the world to discuss Bitcoin. Bitcoin began 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 recently traded at $20,000. The majority of traders get run over by big, unanticipated market swings. Those who follow Elliott waves can be calm, prepared and ready to take action before the next, most likely turn. 4 ways EWI's Cryptocurrency Pro Service lets you make decisions with more confidence You Get Analysis Through the Day Your Cryptocurrency Pro Service subscription puts a team of Forex experts in your corner. Their goal is to make sure that day-by-day, you have the latest Elliott wave coverage for Bitcoin. To start, we will provide Bitcoin coverage several times a day. As demand proves out, we'll increase our frequency. If other cryptocoin futures become available, we'll cover them. You Get "Opportunity-Now!" Alerts on Currency Pairs As a Cryptocurrency Pro Service subscriber, you also get opportunity alerts in currencies. Your Pro Services Forex team scours all FX markets for dramatic setups for you. That's when a market has reached a low-risk, high-reward juncture in its wave pattern. You'll find the alerts in the Opportunities section of your Pro Services portal. You Get Essential Weekly Perspective On Currencies Once a week, your currency analysts prepare a video to help you prepare for the week ahead. Sit back and watch as our analysts reveal the markets that are on their radar and should be on yours -- including Bitcoin. Then, each day, market veteran Murray Gunn posts his Currency Insights column. The inimitable analyst calls your attention to an overlooked but powerful wave-generated undercurrent moving FX. These videos and columns are required viewing and reading for all serious currency followers. You Become Part of an Exclusive Community of Savvy Elliott Wave Traders If you have a question about the Wave Principle or our analysis, just send us an email. An FX team member will get back to you. We know that we're successful when you are successful. We do what we can to make sure that happens. Special Introductory Offer: We considered waiting to launch our Cryptocurrency Pro Service until January 1. That would let us iron out every kink, including data access and format. Instead, we decided to give you the choice: Order now and get 2 months of our new Crypto Pro Service for the price of 1, or wait until January 1 and pay the normal rate. It's your call. Start Your Subscription Now for $49 This offer is good until 12 midnight, Eastern time, on December 31, 2017. Starting January 1, we go to full price.

This article was syndicated by Elliott Wave International and was originally published under the headline Bitcoin: Here's Why the Push Above $20,000 Was in the Cards. EWI is the world's largest market forecasting firm. Its staff of full-time analysts led by Chartered Market Technician Robert Prechter provides 24-hour-a-day market analysis to institutional and private investors around the world.

A Method Traders Can Use to Confirm an Elliott Wave Count

By Elliott Wave International

When you are watching a pattern develop on a chart, how can you be sure that your Elliott wave count is correct? Elliott Wave International's Senior Analyst Jeffrey Kennedy spent years designing his own technique to improve his accuracy. He came up with the Kennedy Channeling Technique, which he uses to confirm his wave counts. The following excerpt from Jeffrey's Trader's Classroom lessons offers an overview of his method. Get more trading lessons from Jeffrey in his popular free eBook, The Best of Trader's Classroom.

---

My theory is simple: Five waves break down into three channels, and three waves need only one. The price movement in and out of these channels confirms each Elliott wave.
Base Channel
Figure 61 shows three separate five-wave patterns with three different channels drawn: the base channel, the acceleration channel and the deceleration channel.

The base channel contains the origin of wave 1, the end of wave 2 and the extreme of wave 1 (Figure 61A) [waves 1 and 2 connect with a line, then draw a parallel line along the top of wave 1]. Of the three channels, the base channel is most important, because it defines the trend. As long as prices stay within the base channel, we can safely consider the price action corrective. Over the years, I've discovered that most corrective wave patterns stay within one price channel (Figure 62). Only after prices have moved through the upper or lower boundary lines of this channel is an impulsive wave count suitable, which brings us to the acceleration channel.
Acceleration Channel
The acceleration channel encompasses wave 3. Use the extreme of wave 1, the most recent high and the bottom of wave 2 to draw this channel (Figure 61B) [draw the line from the top of wave 1 to the top of wave 3, then draw a parallel line starting at the bottom of wave 2]. As wave three develops, you'll need to redraw the acceleration channel to accommodate new highs.
Once prices break through the lower boundary line of the acceleration channel, we have confirmation that wave 3 is over and that wave 4 is unfolding. I have noticed that wave 4 will often end near the upper boundary line of the base channel or moderately within the parallel lines. If prices break through the lower boundary line of the base channel decisively, it means the trend is down, and you need to draw new channels.

Deceleration Channel
The deceleration channel contains wave 4 (Figure 61C). To draw the deceleration channel, simply connect the extremes of wave 3 and wave B with a trend line. Take a parallel of this line, and place it on the extreme of wave A. As I mentioned before, price action that stays within one price channel is often corrective. When prices break through the upper boundary line of this channel, you can expect a 5th-wave rally next.
In a nutshell, prices need to break out of the base channel to confirm the trend. Movement out of the acceleration channel confirms that wave 4 is in force, and penetration of the deceleration channel lines signals that wave 5 is under way.
[Elliott wave patterns are fractal, meaning they occur on small and large scales. Therefore, it is also possible this entire pattern could all occur within a much bigger trend channel.]

14 Critical Lessons Every Trader Should Know Since 1999, Jeffrey Kennedy has produced dozens of Trader's Classroom lessons exclusively for his subscribers. Now you can get "the best of the best" in these 14 lessons that offer the most critical information every trader should know. Find out why traders fail, the three phases of a trader's education, and how to make yourself a better trader with lessons on the Wave Principle, bar patterns, Fibonacci sequences, and more! Don't miss your chance to improve your trading. Download your FREE 45-page eBook today!

Our Forecast BEFORE the 47 Percent, 12-Month Gain

By Elliott Wave International

Learn How to Apply the Wave Principle to Improve Your Trading and Investing No matter what markets you follow, this 10-lesson tutorial will help you begin applying Elliott waves so you can find opportunities like this one in EEMA. You'll learn: What the basic Elliott wave progression looks like Difference between impulsive and corrective waves How to estimate the length of waves How Fibonacci numbers fit into wave analysis Practical application tips for the method Get instant access!

This article was syndicated by Elliott Wave International and was originally published under the headline Our Forecast BEFORE the 47 Percent, 12-Month Gain. EWI is the world's largest market forecasting firm. Its staff of full-time analysts led by Chartered Market Technician Robert Prechter provides 24-hour-a-day market analysis to institutional and private investors around the world.

Bull/Bear Ratio: Is "More Leverage" Better?

By Elliott Wave International

Learn to Use Sentiment to Time Your Investments Better In this 14-minute video, you'll learn how to combine Elliott wave analysis with extremes in market sentiment to reliably anticipate turning points in the markets. EWI Chief Market Analyst Steve Hochberg explains using an example in gold. Get instant access!

This article was syndicated by Elliott Wave International and was originally published under the headline Bull/Bear Ratio: Is "More Leverage" Better?. EWI is the world's largest market forecasting firm. Its staff of full-time analysts led by Chartered Market Technician Robert Prechter provides 24-hour-a-day market analysis to institutional and private investors around the world.

The Loonie Takes Flight -- BUT a "Labor Miracle" is NOT the Reason Why

One day before the jobs numbers went viral, Elliott wave analysis already called for a USDCAD decline

By Elliott Wave International

Friday December 1 was a lucky break for loonie bulls. That day, the government agency Statistics Canada revealed the nation's economy added 79,500 new jobs in November, "blowing past" the 10,000 that economists expected. As one major news source described it:

"Canadian dollar posted its biggest gain in nearly three months against its U.S. counterpart on Friday after a stronger-than-expected domestic jobs data fueled expectations for further Bank of Canada interest rate hikes early next year..."

"The labor miracle in Canada continues." (Dec. 1 Reuters)

Absolutely, a jobs number that's EIGHT times bigger than expected is a significant event for economists; some would even call it "miraculous." But here's the part we have trouble with: The spike was NOT the cause for the Canadian dollar's surge.
The reason we know that is because Elliott wave analysis foresaw a loonie rally before the jobs "miracle" was released.
On November 30, a day before the surprise numbers went viral and stirred up a media frenzy, our Currency Pro Service editor Jim Martens set the stage for a decline in the USDCAD: (a falling U.S. dollar/rising Canadian dollar)
Here is Jim's analysis from his November 30 Currency Pro Service intraday update:
November 30 2:30 PM:

"USDCAD pushed to a new high on the day. Despite the new high the rally from 1.2672 might still represent wave b of a larger flat correction. A double top with 1.2915 would best serve the flat scenario. It would lead to a wave c decline that reaches below 1.2666. -- Jim"

Jim also referenced the upcoming jobs data report:

"Unemployment Claims is the next high impact economic release due out in the U.S. at 8:30 AM ET [Friday morning]."

Obviously, Jim had no way of knowing that the jobs claims would outperform expectations eight-fold. His analysis wasn't based on the "fundamental" data, but rather on the Elliott wave pattern unfolding on the USDCAD's price chart.
The next chart shows you how the currency pair followed its Elliott wave script to a T, with the greenback plunging and the loonie rising.

What makes forecasts like these possible is the fact that Elliott wave analysis tracks and forecasts market psychology. It's the collective psychology of market players that create trends.
The loonie was poised to strengthen against the dollar regardless of what the labor report had said; there didn't have to be any CAD-bullish news, period.

Trading Forex: How the Elliott Wave Principle Can Boost Your Forex Success Learn how to put the power of the Wave Principle to work in your forex trading with this free, 14-page eBook. EWI Senior Currency Strategist Jim Martens shares actionable trading lessons and tips to help you find the best opportunities in the FX markets you trade. Get Immediate Access!

This article was syndicated by Elliott Wave International and was originally published under the headline The Loonie Takes Flight -- BUT a "Labor Miracle" is NOT the Reason Why. EWI is the world's largest market forecasting firm. Its staff of full-time analysts led by Chartered Market Technician Robert Prechter provides 24-hour-a-day market analysis to institutional and private investors around the world.

An "Unprestigious" Preview of Debt Deflation

By Elliott Wave International

Evidence: Your Bond Fund Is Riskier Than You Think Debt deflation has taken down a huge multinational builder. Pitfalls in the bond market are growing too risky for bond investors to ignore. Learn what you need to know in a free, new report from EWI's Murray Gunn -- "Your Bond Fund: It's Riskier Than You Think." Learn more and register for free!

This article was syndicated by Elliott Wave International and was originally published under the headline An "Unprestigious" Preview of Debt Deflation. EWI is the world's largest market forecasting firm. Its staff of full-time analysts led by Chartered Market Technician Robert Prechter provides 24-hour-a-day market analysis to institutional and private investors around the world.