Crypto Train Leaving the Station

In late December, bullishness in the crypto market reached an intense fervor. Many who had never entered a crypto trade, were coming to the market for the first time. And, they seemed most excited about Bitcoin.

Bitcoin had roughly tripled in two months and the masses were chasing a hot trade. Yet, at that time, Zac Mannes and I warned that the 18,000 to 19000 area could bring our next top.

We had long awaited a properly deep correction, a wave iv in this 5th of our primary third. Yet it had eluded us, until we hit 19,700 region (depending on the exchange) on December 19, 2017 and dropped nearly 30% within hours. This ushered in the beginning of the wave iv.

Along with our warning, we were taking profit in the model portfolio of our Cryptocurrency Trading service at ElliottWaveTrader. We had seen many great trades exceeding 500% and even one amazing trade in Verge logging 2428% in two months.

On February 6th we almost hit our long-term support target at $4700, which represents a 38.2% correction of our third wave of the fifth of primary third. We didn’t quite get there with a bottom at $5920.

Have we bottomed or will we have a deeper C wave bottom in our support zone? The slightly shallow bottom leaves this question open. As of writing we are not sure. We are tracking both possibilities. Regardless, we still count this price area to be a multi-month opportunity in cryptos.

If you’ve thought about getting into this market but have shied away, consider this: We believe this will be the last rally before "crypto winter" sets in, our nickname for an expected multi-month to year or more correction.

Not only Bitcoin but many of our large cap coins -- Ethereum, Litecoin, Dash, Neo, and Monero -- are expected to see a major top. Even with a top looming there is great risk to reward from this region:

  • Litecoin with a current price of $210 should top just north of $1000
  • Ethereum with a current price of $855 should top north of $3100
  • Neo with a current price of $121 should top north of $300
  • Dash with a current price of $613 should top north of $2100
  • Monero with a current price of $352 should top north of $700

Even larger potential gains exist in the small-cap coins we’re tracking, such as Verge, Bitshares, Redd Coin, Doge and others. However, small caps are quite volatile and are hair-raising trades.

As mentioned, we still need to watch for a B wave top and subsequent deeper C wave in wave iv in Bitcoin. Over the recent high at $11,805 on February 20, that B wave top becomes less likely. As of writing that is only $400 from here. And, we’ll see further confirmation the rally has begun over $18,500.

To anyone coming in now, we suggest starting small and leaving some cash to scale in lower if we start to see this rally fail. As we get through further confirmation, one can add on shallow retraces, or a deeper wave 2 retrace that is expected after the next degree 5 wave move.

If you have considered taking your first baby steps into crypto trading, now is the time. Once the expected rally takes hold more firmly, the market will not give much opportunity to get in, and in a few months it may be over. This express train may not stop where you want. Are you onboard?

Ryan Wilday, with over 17 years experience trading equities, futures and options and 5 years trading cryptocurrencies, hosts our Cryptocurrency Trading service at EWT.  Those already registered on the site can add the service here.  Newcomers to the site please register in the right column.

Avi Gilburt is founder of ElliottWaveTrader.net.