The major headline that is the causing this flash crash as many news media outlets are reporting is that VanEck-SolidX Bitcoin ETF application was delayed for consideration for September by the U.S. Securities and Exchange Commission (SEC).
The Securities and Exchange Commission late Tuesday delayed a decision on an application for the first bitcoin-related exchange-traded-fund. The regulator said it planned on making a decision on the proposed ETF from VanEck and SolidX on Sept. 30. A decision was expected no earlier than Aug. 10, 45 days from the time the ETF duo submitted their application for the fund.
As stated by the agency in the official statement:
“Accordingly, the Commission, pursuant to Section 19(b)(2) of the Act,6 designates September 30, 2018, as the date by which the Commission shall either approve or disapprove, or institute proceedings to determine whether to disapprove, the proposed rule change.”
Consequently, the market is down with an average percentage of change among top 100 coins ranging from 7-20%.
- From yesterday’s high at 7159$ the price of Bitcoin has fallen by 10,93% and is currently trading below 6500$.
- From yesterday’s high at 410$ the price of Ethereum has decreased by 10,44% and is currently trading at 367$.
- From yesterday’s high at 0,4133$ the price of Ripple has fallen by 16,91% as its currently trading at 0,347$.
- From yesterday’s high at 75$ the price of Litecoin has fallen by 12,86% and is currently trading at 65,4$.
It looks like the last straw that investors held on to was the Bitcoin ETF. The news was so hyped out that now after the SEC announced they are postponing the decision for late September that straw broke and the straight downfall started. I think that this is going to be the final sell-off but I don’t mean that it will be over soon.
What I would expect from here on for the cryptomarket is another despair and pain period with no upside on the horizon for a while. In the following paragraph, I will elaborate on why I think that.
This was my prediction from June. I have projected that the evaluation of the cryptocurrency market cap would come to 250B levels where it will find support again as it was the prior low after which we would see another up move that would result in a lower high and finally after that a breakout from the downside below the 250 billion dollar level.
As you can see from today’s chart below that is exactly what happened and what is starting to happen, except the up move was far less stronger than what I expected to see which is why the likelihood of my projection has increased and let me tell you why.
The 250 billion dollar level was significant enough that the market participants have protected it once as they consider others will do the same as well and have seen it as the bottom. Now, however that the prices failed to create a higher high or even a proper lower high is a clear indicator to traders and investors that there isn’t an uptrend coming soon. That means that those who were willing to protect the 250 billion dollar level are no longer willing to do so and that level has no support anymore which is why the evaluation of the cryptocurrency market capitalization is now below it at around 231,000,000,000$.
Because this level doesn’t serve as support the next horizontal level I would be looking at next is the one I have labeled in my projection which is at 177,789,000,000$.
This correlates perfectly with my Elliott Wave projection on Bitcoin which I will go over briefly. As Bitcoin’s dominance increased over the lifecycle of this bear market to 48% its is reasonable to analyze its chart to draw a conclusion on where the market as a whole is heading. This was my projection from late June that is playing out in accordance, and currently, the price is even lower as this is not today’s screen shot.
BTC/USD Daily chary Elliott Wave projection from late June
I have pointed out then that after a 3 wave correction many were thinking the uptrend will continue shortly and that conclusion was alright at the time, but it became invalid at the end of March when the price first retested the 6940$ area and then created a lower low. From there on I was saying that we are in for months of sideways movement.
After the sideways correction has developed enough for me to count the wave’s properly I have labeled this WXYXZ correction and projected the Z wave spot on. Now that this correction is over I am looking for a lower low to around 4700$ and then even lower. In the following chart, I will show you why.
The third intermediate WXY correction has started or the final Y wave from a higher degree count. That final Y wave is what I consider a “final sell-off” that is not going to be over soon.
Another reason I have for thinking like this other than my own analysis is historical data. Similar correction happened in 2014 and I have labeled the equivalent prices to the current once.
The price of Bitcoin retraced back to the levels from which the all-time high was made as the wave Y ended which would today be 3000$ or less to 2700$.
How to Spot the Bottom?
The market’s bottom in two ways – its either a V/U shape bottom usually seen as a dip in a bull market or they just flatten out and form a plateau. I think that in the case of Bitcoin we are going to see the second one as there would be nothing left to hype up the price and things are going to be very quiet for a while and the pain and despair period leaving a big “cup and handle” bottom like formation.
And again don’t believe me, just look at some historical data. This is what already happened in 2014.