Recently, Ramki Ramakrishnan, an international banker and treasury manager, who is also a contributor at Forbes, technically analyzed bitcoin’s recent fall with Elliott Waves.
Bitcoin’s Recent Correction
On Thursday, all the top 25 cryptocurrencies, including bitcoin, Ethereum, and Ripple, experienced a huge price fall. The average value drop exceeded ten percent in almost all cases. Both Ethereum’s and bitcoin’s market cap fell by billions of dollars, with BTC dropping to $37.4 billion and ETH to $28.9 billion.
However, one day later, on Friday, bitcoin recovered from $2,150 to $2,521, and is currently standing on $2,640 (as of Saturday 6:40 PM). Some people credited bitcoin’s tumble to Bitmain’s announcement saying that the network of bitcoin is at a high risk of being split. Although, analyst Nicola Duke predicted such a correction in May for both BTC and Ethereum. The analyst stated that bitcoin could experience a correction of 46.5 percent. Duke predicted that BTC’s price will go as low as $1,470, however, that drop did not happen (yet).
According to Ramakrishnan, bitcoin experienced its biggest correction in two years. The banker had seen the opportunity in the fall to show traders and investors a technical analysis “to demonstrate to you how traders can benefit enormously by paying attention to technical factors.”
“Elliott Wave Analysis is based on a theory put forward by Ralph Nelson Elliott back in the 1930s. He figured out that all bull cycles are made up of five waves, and once the five waves are complete, we will experience a correction that will bring the price down in three waves. The first wave is counted from a significant low, as shown here. The first and third waves are often related to each other by a standard ratio. And one of the three waves going upwards is extended to travel a distance that is much longer relative to the other two,” Ramakrishnan explains.
The banker explains that, in his analysis, he started a wave count from a significant low in 2015. In the below chart, one can see that Wave 1 was corrected by Wave 2. The third wave surged quite high, exactly 361.8% of the first wave.
Once bitcoin reached the third wave, the cryptocurrency started in a correction move (as seen in the chart below). Ramakrishnan explained that Elliott Wave practitioners often look for such correction to relate to “the prior impulse wave by a Fibonacci ratio.” In the current case, Wave 4 reached the 38.2% measure of the previous wave.
For a real-time bitcoin price chart, click here.
Featured image from Shutterstock.
Bitcoin Sets Six-Day High Above $9K (Then Dips Again)
Bitcoin (BTC) is trimming gains, having set a six-day high above the $9,000 mark early Saturday, according to CoinDesk's Bitcon Price Index (BPI).
The cryptocurrency ran into bids at $8,608.62 at 0
Dfinity raises $61 million for platform that rivals ethereum
Dfinity, a new product that rivals ethereum, just raised $61 million by well-respected investors Andreesen Horowitz and Polychain Capital, which has investors ranging from Sequoia Capital to Union
Greed is bad? 5% monthly gains aren’t a 'God-given right,' says Bespoke’s Paul Hickey
Investors should view the historic pullback in stocks and bitcoin as a lesson on the dangers of overconfidence, according to market watcher Paul Hickey. Hickey, co-founder of independent research
Bitcoin is for 'toy collectors,' Minneapolis Fed President Neel Kashkari says
Bitcoin is not for serious investors, the head of the Minneapolis Federal Reserve said Thursday. "If you live in any modern advanced economy, I would stick with the dollar, I would stick with the
Your first trade for Friday, February 9
The "Fast Money" traders shared their first moves for the market open. Tim Seymour is a buyer of the iShares MSCI Emerging Markets ETF. Karen Finerman is a buyer of Apple. Dan Nathan is a
US colleges are starting to teach bitcoin and blockchain
BERKELEY, Calif. â While the price of Bitcoin has dropped since Christmas, the virtual currency boom has shown no signs of cooling off in the more august precincts of Americaâs elite universities.
On Valentine’s Day, scammers steal more than your heart
Few things can kill the mood like financial fraud. Yet Valentine's Day, and the days leading up to it, is the peak season for scammers who prey on the heart strings, and purse strings, of those
Snap is trying to lure Instagram advertisers by offering them free ads
Snap wants to attract new advertisers â specifically, it wants to attract advertisers who are spending money with its biggest competitor, Instagram. To lure them over, Snap is reaching out to