Bitcoin (BTC-USD) may have dropped to the point that some say this cryptocurrency has run its course, but the party for those who take this sector seriously is just getting started. In this article, I’ll discuss the chart pattern expectations for Bitcoin and how to reliably forecast price machinations in this volatile sector.
Attempting to use any kind of fundamental approach to reliably forecast price targets for Bitcoin or any cryptocurrency is nigh impossible. Philosophically, the opinions of how cryptocurrencies like Bitcoin will play a role in the financial markets vary from those who believe they are destined to fail, to the polar opposite belief that they’ll replace fiat currencies in the future. The disparity between these polar opposite views creates huge volatility and represents the heart and soul of investor sentiment.
Having used Elliott Wave and Fibonacci for many years to accurately forecast price targets of financial instruments like currencies, equities, crude oil, and virtually any other financial instrument you can imagine, there is no better set of tools to measure investor sentiment, and thus price targets, with Bitcoin and other cryptocurrencies. Elliott Wave is principally the study of mass human sentiment, and as such, Bitcoin and other cryptocurrencies are ideally suited to this analysis technique. In fact, since Mike Richards of TimePriceAnalysis has been charting the top market cap crypto’s for our subscribers, this sector has adhered virtually picture perfect to forecasted price expectations. What’s more, for those willing to expose minimal capital to either purchase Bitcoin outright, or more multi-layered strategies, based on the sentiment-driven price expectations we’ll provide herein, there are “breathtaking” opportunities for investors, with one about to arrive at your doorstep very shortly – but only if you’re willing calmly walk into what others believe is a burning theatre.
Let’s review the Elliott Wave count, as the opportunity will become self-evident. Bitcoin put in an all-time low in August 2010 of $.03. From there, it’s experienced a spectacular rise in both price and what can best be described as its euphoric sentiment. The sentiment crescendo occurred in late 2017 when it reached its all-time high of $19,918 per single Bitcoin. Since then, it’s experienced a multi-month correction that has gobbled up most of this year, where thus far it’s seen a low of $5,525. This might seem like an extreme drop to some, causing them to become disillusioned and even calling for the imminent demise of this emerging sector, but in the context of a rise from $.03 to $19,918 in 8 short years, this pullback is nothing more than a small consolidation before heading to meteoric levels.
Refer to the Bi-Weekly chart below that shows Bitcoin relative to the US dollar. The most accurate approach by using log scale fib extensions in Bitcoin shows several interesting things that support continued upside in the current price pattern. Firstly, it is still in what is referred to in Elliott Wave parlance as Primary Degree Wave 3 (green (3)) in its move up off the all-time low. Within Primary (3), it’s presently completing Minor Degree Wave 4 (blue 4), which should conclude with a price drop into the $2,488-4,175 region. This final drop should complete shortly and potentially before the end of this year.
Upon completion of this correction, Bitcoin will commence its next swing to the upside to complete all of Primary Degree Wave (3), with a price target of a minimum of $30,027 and more likely will extend to the 2.618 extension at $77,897. Upon completion of Primary Degree Wave (3), we would then expect Bitcoin to revisit the area of the 4th of one lesser degree. In English, this means we would expect a move back to whatever low it establishes on this present drop ($2,488-4,175) before heading up to complete Primary Degree Wave (5) to levels that will seem unrealistic to some, and that I’ll summarize in more detail in future articles.
Daily Bitcoin – Short-Term Analysis
It’s almost unimaginable for some to believe that these types of price movements can occur in any instrument or sector. However, before you set aside the notion that something can move to these extremes, take a few moments to imagine the implications of cryptocurrencies replacing fiat currencies as a primary medium of exchange. I won’t opine on whether this is possible or even real, as that’s not the point of this article. However, it’s not what I believe that matters, nor is it what’s real or unreal, but rather the sentiment associated with market participates who ponder these questions. This is what drives prices to extremes, and it’s this same sentiment that will continue to cause the volatility in cryptocurrencies that make their patterns predictable in a way that make investors VERY real profits.
Measuring sentiment truly is the only approach to reliably measure price movements, and with investor sentiment causing such enormous volatility in the crypto sector, there is no better approach than using Elliott Wave and Fibonacci with a multi-timeframe approach. Bitcoin is setting up some fantastic opportunities for those willing to learn something new and expose some capital. While it may be obvious to most, we would caution investors to limit the amount of capital they expose to cryptos. Firstly, you don’t need much to make a lot, and secondly, the volatility is so high that you may find yourself needing to hold through a pattern cycle.
Bitcoin truly is setting up an extraordinary ride!
Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.