Bitcoin Reaches ~3200 Target as Cycles Bottom in mid-Dec. ‘18. How High Could 3 – 6 Month Advance Reach?
Bitcoin Reaches ~3200 Target as Cycles Bottom in mid-Dec. ‘18. How High Could 3 – 6 Month Advance Reach?
12/14/18 The Bridge – Currency Wars & Cryptos: “For the first 6 – 9 months of 2018, Bitcoin had the same primary downside objective. That was expected to hold until (at least) cycles turned negative in late-Sept. 2018 – after which they would remain bearish into Dec. ‘18. In the July 13, 2018 The Bridge, the following assessment was published with regard to Bitcoin:
“Bitcoin has fulfilled its 3 – 6 month downside price objective – attacking the critical 5,500 – 5,800 support level multiple times… Bitcoin has also fulfilled multiple cycles – daily, weekly & monthly – that have anticipated a low in late-June – mid-July 2018…
From a time and price perspective, Bitcoin is in the ideal range for a multi-month bottom to take hold. The first confirmation of that would be a rally above – and daily close above – 6,800. That would then project a rally back to ~7,800, the second level of pivotal resistance…
If Bitcoin convincingly breaks below 5,500, it would reflect an even more bearish structure and could trigger a blow-off decline to ~3,200.”
That 3,200 target (the price range actually extends down to 2950), in Elliott Wave terms, is the ‘start of the extension’ in Bitcoin’s overall uptrend (see chart on page 2). When Bitcoin was trading around ~3,000, that was the last time that somewhat-rational or cooler heads prevailed.
After that, the speculative fervor intensified to a fevered pitch as all the Beanie Baby buyers were sure they had found the ‘secret’ route to Easy Street and an early retirement.
Another corroborating factor is the principle of ‘resistance turned into support’. Until late-July ‘17, 3,000 was decisive resistance in Bitcoin. It had rallied right to that level – in mid-June ‘17 – and then consolidated below it, dropping back as far as ~1900. In early-August, Bitcoin blew through that resistance and quickly surged to ~5,000.
A breakout like that often results in a retest of the breakout level (‘resistance turned into support’) before a parabolic advance ensues. Bitcoin dropped back to ~3,000, testing & affirming that support in Sept. ‘17, and then began its frothy ascent.
Markets seek equilibrium. And that ~3,000 level is a type of equilibrium between a reasonable uptrend (which was returning 50 – 100% per year or more during that 2014 – 2016 period) and a parabolic mania that inevitably leads to a resultant crash…
It is similar to what the Nasdaq 100 experienced after its 1998 – 2000 (dot-com) bubble. That index exited a rational uptrend, went parabolic from Oct. ‘98 into early-2000, and then crashed into late-2002.
Its extended uptrend began from its early-1997 low around 800. And by late-2002, the Nasdaq 100 had returned to that same point of equilibrium – bottoming around 800. It surged from mid-1997 to early-2000 (about 2.75 years) and then plummeted for the same amount of time, into 4Q ‘02.
And when it crashed, the Nasdaq-100 returned to the uptrending channels in which it had traded during the middle half of the 1990’s.”
Bitcoin reaches major, 6 – 12 month & 1 – 2 year downside target at ~3,200 (see July 13, 2018 The Bridge) – returning to long-term trend support and its overall equilibrium point. This is occurring as cycles bottom in mid-Dec. 2018.
At the same time, the Dollar is peaking – setting what should be a 3 – 6 month or 6 – 12 month top (Nov./Dec. 2018) – ushering in a prime opportunity for Bitcoin to enter a 3 – 6 month (or longer) advance. At the same time, Gold remains positive and is projected to see an overall advance into late-Feb./early-March ’19 and potentially into June/July ’19. That is also hinting that the Dollar’s gains – on a 6 – 12 month basis – are mostly complete.
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