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Sunday, August 16, 2020

Bitcoin to USD 2,000 or 200,000?

Bitcoin to USD 2,000 or 200,000?

Bitcoin / U.S. dollar BITSTAMP:BTCUSD

The black line in the beginning is the missing bitcoin price data (beginning with zero from 2009/2010 onwards to the high in June 2011 of 31 USD) in order to get a full picture to count Elliott waves "correctly".

The first primary impulse (I) went from 2009/2010 to Nov. 2013 and formed the first wave of the bigger cylce (I to V) of which we are either already in wave (V) (= positive outlook: green square) or still in wave (IV) (= negative outlook: red square). By that, we are able to build the upward channel.

Primary impulse wave (4) determines the final target price range of the following correction wave (means (C) for each (II) and (IV)). Therefore I used fib retracements (see yellow dashed line ranges) from the primary impulse wave (4) to the primary correction wave (A) in order to determine the price range of the corresponding primary correction wave (C). We reached that once in January 2015 and in December 2018.


To determine the target zone(s) of the following impulse (I to III and III to V) I used trend-based fib extensions (see pink dashed line ranges) which give us a hint of the next support level and the final target zones:

  • first impulse: 1,163 (= high at Nov. 2013) / 86 (= top of fib extension) = multiplyer of 13.5
  • first impulse: 19,666 (= high at Dec. 2017) / 3,230 (= top of fib extension) = multiplyer of 6.1
  • 13.5/6.1 = next determined multiplier: 2.71
  • 53,650 (= top of fib extension) * 2.71 = next determined target: around 145,390 USD

After breaking out of the downard channels (see yellow circles) there has not been much resistance to reach the corresponding targets and if we look closely, we see that the last downward channel is slighty steeper than the one before which speaks for an even higher target. If we look even closer, we can observe that before an upward movement takes place the chart leaves its former upwards channel and ended upwards on the bottom of it (I did picture the the former ones as to keep everything understandable).

So, for the positive side: history seems and is ready to repeat itself as we actually are in the same situation.


From a pure technical perspective, there are some things that bogus me:

The nearly identical form of wave (II) and wave (IV) which contradicts Elliott Wave Theory. According to it, both waves are alternating (means: if wave (II) is short and steep that wave (IV) should be long and flat and vice versa). Therefore, we could still be in a longer wave (IV) with a target at around 2,000 to 3,300 USD which would mean that the actual breakout is a false one (bull trap). Furthermore, wave ( III ) cannot be the shortest one, which means that as ( III ) is already shorter than (I) then wave (V) has to be shorter than wave ( III ). So, according to the time range, there is much room left for wave (IV). Nevertheless, final wave (V) will eventually follow but according to my fundamental understanding of the (inherental) failiure of Bitcoin (technical: scaling, energy consumption, centralization; practical: missing unique(!) selling point, costs, self-training before usage, ...) it could likely end as a truncated fifth and we will not see another all-time high.


We have to keep in mind that most are not aware of Bitcoins problems and still understand it as the only existing crypto, as "digital gold", a deflationary "store of value" (whats not a "store of value" will remain a mystery) or even as anonymous currency (good luck on that).

As prices are determined by mass psychological effects and we live in "interesting times", I think fundamentals are once more ignored and we will probably see a copy of wave ( III ). After that, Bitcoin will more or less disappear and become a historical marginal note, which once paved the way for better technologies.

from Trading Ideas
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