In this episode of NewsBTC’s all-new daily technical analysis videos, we are looking at the total crypto market cap using Elliott Wave Theory.
This episode focuses on the corrective phase and where the market stands in the overall bullcycle. Check out the video.
VIDEO: Total Crypto Market Cap Analysis (TOTAL): August 24, 2022
We examine the weekly total crypto chart to see what corrections might have occurred according to Elliott Wave patterns. Ralph Nelson Elliott developed Elliott Wave Theory in 1930s. It is based upon the belief that the markets behave in certain patterns known as waves.
The motive wave is a pattern of five waves that moves in the direction of the primary trend. Every odd-numbered wave goes with it. Prices rise. Even the numbered waves can correct for the primary trend. These patterns are present in different time frames and power the primary, secondary and minor trends.
A Double-Three Complex ZigZag Correction could be completed
First, let’s look at the corrective phase. This begins with the high of 2021. A higher high usually indicates that an uptrend should be continued. But, some Elliott Wave correction patterns may be very deceiving.
This corrective phase could still be ongoing. There are two types of Elliott Wave corrective patterns possibly in play: a double-three complex correction with a nasty zig-zag that chopped up the crypto market –– or a simple expanded flat correction that isn’t finished crushing crypto into dust.
Double-three is the bulliest scenario, as it could indicate that the correction has ended. This could mean that cryptocurrency is a more mature asset than many people expect. The pattern would have ended at two crucial levels, namely at the former retest at all-time high resistance, which has been turned support, as well at the 0.764 Fibonacci level of retracement.
What is the bottom?Source: TradingView.com CYPTOCAP-TOTAL | Source: CRYPTOCAP-TOTAL on TradingView.com
A Simple Flat Expanded Correction has Another Wave to Go
Fibonacci extensions and retracement levels play an important role in Elliott Wave Theory projections. They can also help to identify the wave market is in. An expanded flat is a bearish option, which we have already noted.
An ABC correction has been added to the expanded flat, and the C-wave acts as an additional five-wave impulse correction in opposition to the primary trend. The total market in crypto has completed only waves 1 and 2, and may have completed wave 4 and will soon start wave 5 to get to the bottom.
Both of these corrective patterns imply that the overall bullish cycle in crypto isn’t finished and either a wave five, or a wave three and five are left.
Are we still in the dark ages? Source: CRYPTOCAP-TOTAL on TradingView.com | Source: CRYPTOCAP-TOTAL on TradingView.com
Do You Think There Will Be Another Crypto Bull Run Soon?
The daily chart will allow you to see what could be the beginning of a bullish trend. We could see a leading diagonal if the market finds support at this level and continues to move higher.
Bullish patterns like the Elliott Wave can deceive, as can corrective patterns. We compare price action today to determine how the bullish impulse started.
Do you think there is a new phase of bullishness? Source: CRYPTOCAP-TOTAL on TradingView.com | Source: CRYPTOCAP-TOTAL on TradingView.com
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Featured image taken from iStockPhoto. Charts taken from TradingView.com