Bitcoin is the original and by far the largest cryptocurrency. Since its introduction in 2009 it has grown exponentially and spawned many competing cryptocurrencies. Opinion is mixed as to its true worth, but speculation and huge interest has created a volatile - and potentially very rewarding - trading environment.

Updated: 15/05/2019 1030GMT 0530EST



V= 1 C =4            Conditions:  Reversing Higher
F=1  I=2 T= 3 S= 4  Strategy:  look for longs

Fat Finger Channel

Bitcoin's downtrend came to an end nearly one year after it started. The spike of our 3392 target and strong, trend-like reversal tells us the long-awaited recovery is underway. This will either take it to new highs, or will correct the entire year long downtrend; either way a significant move higher should now have started.

Bitcoin crashed to 6175 overnight after coming up just short of our 8700 target at 8400. The long wave 3 is over and this should now be a wave 4 consolidation to set up a further high to around 9000. The 6175 low actually came right on the channel. This channel may look odd as it cuts through price and does not contain the trend cleanly, but it represents price/time equality with wave 2 (circled) and shows both wave 2 and 4 are perfectly equal corrections. We are therefore confident Bitcoin should hold 6175, even 6500 for a consolidation range to set up further highs in this sequence.





Gold 1980s comparison
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Gold 1980s comparison ZOOMED
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V=4 C = 3              Conditions: recovery
F=2  I=1 T=3  S=4   Strategy:  two way trading

Bitcoin has very likely bottomed at the 3135 low in a capitulation much like the early 2015 low and a longer-term pattern similar to gold in the 1980s. While it is unusual for an instrument to recover from a bubble and crash, it does and can happen. Gold and the Nasdaq are good examples, as is Bitcoin itself from earlier periods. All recovered from a crash to trade new highs. Certainly Bitcoin's trend sequence calls for a final wave 5 rally as long a 1169 holds and this should take it above 20k. This should be much slower than the 2017 advance and lead to momentum divergence. We will track the smaller moves on the 48H commentary.




NDX comparison
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V=4 C =2               Conditions: SLOWER  UPTREND
F=2  I=2 T=4  S=5  Strategy: LONG

The eventual path depends on how cryptos develop - if Bitcoin becomes an alternate to gold and a store of value for a new generation, and can hold 1135 got new highs to form a trend sequence above 20k, then the outlook is very bullish. This will have huge implications in the longer term as we could then expect at least another multi-year, proportional rally to the first 5 wave sequence after a long period of consolidation.