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: 19/11/2020 1130GMT 0630EST

NEXT 48 HOURS

INDEX 48H

V= 4 C =4            Conditions:  large rally
F=1  I=2 T= 3 S= 4  Strategy:  buy dips

Back at the High Fractal

Bitcoin is now approaching the previous all-time highs around 20k. When markets do this there is often a repeated pattern - firstly, a flush from that level top draw in shorts, secondly a recovery rally and spike through that level to draw in breakout traders, lastly a choppy range that screws both sides. This is pretty much what we expect from Bitcoin as it unwinds its long wave 3 blow off. Gold's behaviour at 1920 could act as a guide (see evidence), especially as it led the Bitcoin blow off by a number of weeks/months.

 

 

 

 

EVIDENCE

Gold at ATHs
10D E1

EVIDENCE

Silver Lead
10D E1

EVIDENCE

NDX comparison
10D E1

NEXT 10 DAYS

INDEX 10D

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

Bitcoin has followed gold to test its previous all-time highs. It should now unwind the large 2020 rally in a 16k-22k spiky range with unsustained highs and unsustained declines. This could take a number of months into 2021. We do expect one more large rally - wave 5 - later in 2021, but gold's lead should be a guide for this and there is a slight possibility BTC could top with only 3 large legs from the 2018 low.

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.