Hello fellow traders, in this blog post, we will discuss the most hyped cryptocurrency Bitcoin in a technical as well as psychological perspective.
From the zero line, we are calling bitcoin completed in the super cycle blue wave (a) at 17/12/17 top. From that high, the market completed the first leg of 3 of a double correction. You can see the scenarios in the picture below (blue and black). For now, it needs to be seen which path bitcoin takes. The recent drop in bitcoin is for us nothing surprising. The market just pulled back 50% from 09/15/17 low. However, the drop was too short in time. Anyway, our forecast is still for more upside, nothing has changed so far for us. It only needs to be seen whether it can make a double correction or keeps just rallying to the upside. Either way, it should extend higher.
Bitcoin Daily Chart 12/31/17
But why do mainstream Media and many other traders think this the starting of a bubble, you might think. Well, that I want to explain in the next paragraph. It has something to do with traders emotions. Let’s have a look:
Generally, speaking we can say that markets are driven by either fear or greed. Why you may think. Well, it because these are the primal human emotions and markets and algos move accordingly to them. Above you can see the overall greed and fear cycle. Because of the recent drop and mainstream media hyping it. Weaker traders are overwhelmed by emotions. And their running trades.
The objective in trading crypto and other instruments are clearly defined. It’s all about achieving profits and not suffering losses. But what you should understand is that every winner faces a loser on the other side.
The truth is that we will have to deal with losses sooner or later again and again. And that is the problem for the 95% of the traders! An unsuccessful trader can NOT deal with losses. Traders tend to get overwhelmed with their emotions. Once they face a loss. Why is it like this? Well, by winning or losing money we have earned, we mostly become emotional. Why? Because a rising account puts us in joy and euphoria. Whereas a falling account will put us in scare and anxious. Overall, we can conclude that in trading perspective it’s very clear as I write this blog.
The possibility that bitcoin make new highs are there, we only change our view when the market tells us to do so. We do not change our forecast until the market tells us to change.
Source : https://elliottwave-forecast.com/forex/bitcoin-forecast-in-a-technical-as-well-as-psychological-perspective/