Cryptocurrency - Bitcoin

Hi William,
I think ‘nice visual trigger’ is less important than ability to test a model. So I use “composite” to test my models with past data. I agree that using more than 1/2 of the smallest cycle (model) is not safe. Occasionally models stability can lead to complacency just when things are about to change. One way to extend the forecast is go with higher time frame and increasing forecast time horizon by sacrificing forecast precision.

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Bitcoin is breaking the yesterday daily low. More obvious it is creating a cup also. Not superb.
I will buy again when it reaches the low. Not going to sell. The lowest level i am going to buy real bitcoin hold up to 2020. :rofl: I think these timings are correct. I have modified the semafor software to have support level and resistance level and from the level easy to see the timing.

Long term timing


St timing.

It certainly is an anemic category C action if that’s what this is, but if that’s five legs up, I would guess there is more bullishness in store near the end of the month.

That may turn out to be a significant trendline break, particularly if it closes below the prior low. The 20 week price wave is projected to peak in a few days which will obviously be a lower high. The 40 week price wave is down and the price action has broken the 40 week up trendline. It is not looking good for the “Cryptonian” bulls!

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Hi William,

I’m watching for a break of the same VTL in the equity markets. Trying to figure out if Bitcoin leads stocks. Sometimes it does. Below are a few general questions about your filter approach.

Without seeing the 20w and 40w price waves on your chart, it’s hard for me to visualize them. Can I assume 8 of the 2 1/2-3 week waves shown equal the 20w wave? (I know you said harmonics using your price wave filters are not always the same as when using traditional Hurst cycle analysis.) This would mean 2/9 was the 20w low from the August 18 month low (24 actual weeks). However, how do you know this new 20w wave is due to peak in a few days? Maybe some of my confusion is attempting to compare your price wave analysis for Bitcoin to traditional Hurst analysis for stocks. They look to be essentially the same though.

It’s interesting how the smoothing in your bandpass filter positions double bottom troughs. I have found choosing the first or last low can throw my phasing off at times. Using the middle point helps make better sense of the big picture. Then you can drill down to the detail on the right edge of the chart.

Curt

This is how they do it Bothers. I stopped using Tor a few years back as something did not smell right. Now we find out all these years latter why. It was funded by guess who???. They do what all intelligence agencies do in that they give you an option that you think is safe and out of sight from there prying eyes. But the whole time it’s there creation to begin with and they’re watching you the whole time.

I can’t help but feel this is the exact same story in cripto currencies. We have just been shown form the above article how they do it (a blue print if you will). Get the underground tech nerd community to think they are setting something up to rebel against the system. While the whole time your in fact helping the government set up the new system they want to implement in the future.

My intuition is never wrong it’s screaming that cripto currencies are something the government wants for the future. The best implementation plan is exactly the way there doing it now in that you make the mass’s think it’s there creation…!!!

Just for the record I think that the block-chain itself (as apposed to the cripto currency) will change the world in ways we cannot even comprehend …a real game changer in so many industries.

Cheers.

Hi William. You’ve attached the 21 day price wave. Let us know what is going on with the 40 and 20 week price waves.

Thanks
Jonathan

Hi Curt.

Firstly, the dominant frequencies in the equity markets and bitcoin are highly correlated, almost identical. The phasing is different of course due to the differences in the amplitude coefficients and the amount of modulation. There is no cause and effect relationship between the two in my opinion, but bitcoin appears to lead in terms of the phasing of the price waves.

The price wave in the prior chart would ostensibly be characterized as the “40 day wave” using conventional Hurst classification due to its approximate 4 to 1 harmonic relationship to the 20 week wave. However in this particular instance the harmonic relationship is not a simple harmonic relationship by a factor of 2, resulting in a complex harmonic relationship in the filter output as you should be able to discern from the charts.

I misspoke in my prior post. I should have said a few “weeks” not days. It is approximately 3 weeks. The standard deviation of the average period of each leg of the price wave shown in the chart below (20 week wave) is slightly more than 9 days which creates a nice projection time window. Once the price action gets inside you can use your favorite Hurst action signal to enter the trade.

One of the primary differences in using a filter to extract the price waves versus ST’s approach is that the filter output does not necessarily always phase to the absolute low close. As you can see from the chart it sometimes phases closer to the high close. The “double bottom troughs” you are observing are easily picked up by the shorter price waves using an intraday sampling period.

Hi Wrandall

The filter method and program you use to formulate the above chart.

Q: Is this your own proprietary work or is it something I can learn about and purchase in order to formulate my own charts?

Sincerely
Dom

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William,

Thanks for the comprehensive answer. I didn’t mean to imply there was a cause and effect relationship between Bitcoin and stocks. I just hadn’t spent much time looking at the cryptos and after reading your post was struck by how similar the dominant frequencies are.

Mixing apples and oranges (or cryptos and stocks) was my bad. Mixing Hurst’s spectral price wave and traditional visual cycles approaches was also probably not a great idea given the complex harmonics that are happening in this case. I’m hoping some day to be able to use both methods as a confirmation (confusion?) tool. Not there yet.

Phasing to the high close in the area of a trough isn’t always a bad thing. I have seen many cycles with complex troughs, especially when three harmonically related cycles interact at their mid-point.

Curt

Hi Dom.

Those particular charts are created in Excel and are very easy to create. The filters can run the gamut from a simple moving average all the way up to a high resolution digital filter like the Ormsby filter Hurst used in PM.

The filters shown in the above charts are just modified moving averages that have been smoothed and extrapolated through the lag period and projected into the future. There many different ways to accomplish the task.

I highly recommend that you learn the various techniques yourself in Excel. You will have a much greater appreciation and understanding of the application and flexibility of bandpass filters than if you just purchased someone else’s software.

Hello

Thank you for the response, really appreciate it.

Cheers

Hi Curt.

My cause and effect comment was just an aside on my part.

When I first became aware of the frequency similarity, I would superimpose the waves to get a clearer look at the timing correlation. But as to be expected, the correlation was not consistent enough for my taste to be useful.

Since cryptos do not have any intrinsic, fundamental value, it might be argued theoretically that 100% of their movement is periodic in nature as opposed to the 23% for equities. The two or three that I have looked at all have the same spectral signature and the dominant frequency is the same as the S&P 500. Go figure.

I think you may have misunderstood my statement regarding the “high close.” I was referring to the cyclical high of the price wave and the high close in the price action. For example if you look at the absolute high close in the price action on 12/16/2016, it corresponds exactly with the cyclical high of the price on the same date. It’s rare (on daily data) but it does occur periodically.

Also as of this writing the price action has closed below the 2/25/2018 close, further confirming the weakness. The subsequent 21 day price wave high and the upcoming 20 week price wave high are projected to peak almost simultaneously at the end of the month. Shorts anyone?

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https://www.mvis-indices.com/indices/digital-assets/mvis-cryptocompare-digital-assets-100-large-cap

Digital Assets. I found these indices very useful, they reveal a broader picture than just cryptos and hype.

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Thanks Srid.

The data on that site just confirmed my suspicion that all cryptos have basically the same spectral signature. It would be nice if there was an instrument allowing one to trade a basket of cryptos like that, long and short of course.

Hi Jonathan,

Here is a look at my 40 week wave.

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They can all go to zero together like a basket of internet stocks from 2000-2003.

If we can short it we will all be knocking on the door of the Forbes 400!

http://cfe.cboe.com/cfe-products/xbt-cboe-bitcoin-futures

Try @XBT#