Bitcoin – 10 April

bitbrain (63)in #bitcoin • 5 years ago

Since my BTC post of 6 April “BTC – movements and signals – 06 April“, I’ve fleshed out my theory of BTC price movement in the months to come. Since I seem to be sharing that information sporadically in the comments sections of various platforms, I’d rather combine it all into one coherent post and share it with everybody.

In “BTC – movements and signals – 06 April” I gave two main future scenarios, specifically:

Drop back to the low $4000s – 50% probability;
Rise to just over $6000 – 40% probability.

I won’t say that I now consider those to be wrong, in fact the opposite is true, I think they are both right (sort of). Explanation below…

Explanation

Late last year BTC steadied up in the $6200 – $6400 region. It was one of the most stable (least volatile) and enduring BTC price movements that I have ever seen, the Bollinger Bands tightened down to a needle-point before the big drop of mid-November 2018. As BTC rises in price this year, the $6200 – $6400 region will likely provide great resistance. It is likely that BTC will bounce off that level at least once, possible numerous times, before finally being able to break through.

Once it does break through then I expect that region to become a consolidation base for the start of the real bull run. This means that sideways movement within the $6200 – $6400 region is likely, but in order for that to happen, BTC has to get there first.

Made by Bit Brain with TradingView

The current climb is encountered resistance from the 0.618 Fib level at around $5150. BTC looks to have pushed through this after a few days of hard work, meaning that it will now climb further. It is likely that the 0.786 Fib level will provide similar resistance at about $5700, though I am confident that BTC will push through that too, hopefully without having to bounce off it first. When the price fell in November, these two Fib levels temporarily halted that fall, as can be seen on the chart above.

Once $5700 has been conclusively broken, BTC will climb to $6200 to begin its battle against what should be a very large resistance level. I anticipate that BTC will hit $6200 and retrace about 15 – 20%. In other words: it should drop back into the low $5000s.

From there BTC will start its next climb and continue to batter against the $6200 ceiling until it breaks (the ceiling, not BTC!). Depending on the speed of the rises and falls, BTC may have to stay at a lower price level to consolidate and build up volume between attempts at breaking the $6200 level.

The answers lie in the past

This scenario is based on my analysis of BTC’s climb out of the bottom of the 2015 market. While I don’t expect a carbon copy of that price movement, the general trends and market sentiment should be similar:

Made by Bit Brain with TradingView

Of course the price movement directly after this chart ends is the stuff of legends: the bull run kicked in hard and the price climbed by 6200% (to just below $20000). I’m not going to speculate about BTC maximum price in the next bull run yet (although I have done the preliminary calculations), that’s a story for another day.

For now take a look at the chart above and notice that a 15 – 20% drop after a breakthrough attempt seems to be the norm under such circumstances.

What does this mean?

It means that you shouldn’t panic when BTC tests $6200, fails, and then starts to fall. It’s not a reason to turn bearish. Don’t be the person who suffers from “Chicken Little syndrome” (that’s a real thing by the way). For those unfamiliar with the story: Chicken Little was hit on the head by an acorn, the consequence of which is that Chicken Little panicked and informed everyone that “The sky is falling!” – don’t be that person. I have now warned you in advance of what is to come, no panic is required.

Conclusion

I have combined my “Rise to over $6000” and “Drop back to the low $4000s” scenarios together, modifying “low $4000s” to “low $5000s” based on the higher level which the price will be dropping from (around $6200).

It is difficult to say how long this process may take and how many breakthrough attempts will be required at the $6200 level. Were we to use the 2015 market as a template, then we are looking at a process of around seven months (from now) until the bulls take over properly – meaning that consolidation above $6200 would take place in December 2019, with the bulls starting their run around Christmas 2019 (nice present!). It doesn’t have to take that long and I expect it to be shorter, but at the same time I respect what the charts are suggesting and I don’t want to be foolishly optimistic. I have already said on various occasions that I expect the bulls to return in Q3 of 2019, something I am still hoping for, though that was said before the latest BTC price run, which has somewhat changed the way that I’m looking at the market.

In conclusion, here are my latest probabilities:

BTC will follow the process described in this post: 35%
BTC will break though $6200 in the first attempt and the bulls will run earlier than anticipated: 15%
BTC will start a bull run in Q3 of 2019: 20%
Something else: 30%

That’s the best I can do for now and is probably at least as good a prediction as anyone else’s.

Footnote

I’m seeing some truly terrible crypto analysis published in the mass media lately. I’m not talking about on platforms such as STEEM or Trybe, I’m talking about the traditional online media corporations. I don’t know who they’re employing to do this analysis, but monkeys could do better. Throwing darts at a chart would be more accurate. Do not be put off / fooled /influenced by what you read in the daily papers or online forums, no matter how “professional” it may appear to be. Most of those “analysts” clearly have no idea of the workings of the crypto markets! And whatever you do don’t follow their coin recommendations – unless you particularly want to end up with a bag consisting of the top four coins by market cap (including the abomination known as XRP) and nothing else.

Yours in crypto

Bit Brain

"The secret to success: find out where people are going and get there first"
~ Mark Twain

"By this means (fractional reserve banking) government may secretly and unobserved, confiscate the wealth of the people, and not one man in a million will detect the theft."
~ John Maynard Keynes