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: 08/02/2021 1130GMT 0630EST

NEXT 10 DAYS

INDEX 10D

V=4 C = 4              Conditions: trend
F=2  I=1 T=3  S=4   Strategy: long

Bitcoin has blown off to 42k in what should be a long wave 3 rally from the 2020 lows. This now looks complete and has transitioned into a wave 4 consolidation that could trade a 29k-42k range for some time to set up the next stage of the rally. A triangle / contracting range is common for wave 4 so we have penciled in this pattern and this calls for a further drop to 30k before a sideways drift.

A wave 5 rally to new highs is still due and we will calculate targets based on the size of wave 1 once it is underway.

EVIDENCE

NDX comparison
10D E1

NEXT 3 MONTHS

INDEX 3M

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.