Today I'm taking a look at the O.G. cryptocurrency Bitcoin and outlining what I think the future price action may include. I will be specifically outlining 2 concepts; market structures and mass adoption.
Market structures in a chart are basically just areas of support and resistance. These areas can easily be identified by where price has been or where it appears to be going based on previous data. It is my belief that using market structures to predict price action over the long-term is essential to simplifying trading assets.
On the left chart, I have outlined the bullish channel that BTC has been making since around 2014. I am not including previous data to draw these lines simply because BTC was still extremely lucrative and un-adopted by the markets. (Something I will touch on later.) Looking at current pricing, we can see that BTC is lying smack dab in the middle of this price channel. Take a look at the peak in 2013 to the peak in 2017. We can see that these 2 points allow us to create our upper trend line as well as give us a defined time cycle peak to peak. Peak to peak took just under 4 years. This is important because we can see now that the 4 year cycle theory is pretty much invalidated since we aren't at the upper trendline at current. How do I venture to explain this? Simply put, the cycle is lengthening. Just like any other asset, the early bird gets the worm, and over time returns for later birds are diminished. The market cap is raised and it becomes harder and harder for bulls to push price up at the previous rate. This isn't to say that BTC will never reach those levels, just that it may take a bit longer.
Now then, we can all see plain as day that cryptocurrency is going nowhere, it's here to stay. This is because of mass adoption. The signs are everywhere, exchanges popping up, countries buying up Bitcoin, celebrity endorsements, etc etc. Because this is occurring, it is my belief that BTC in particular will create some sort of mass adoption floor. I see this forming between 20k-30k.
So where does price go and when? To be honest I don't know, and neither does anyone else for sure. I'm a bull, so I think we go up eventually. But I also think there needs to be some sort of test on a market structure to send us higher. The fear still exists and to send prices higher, investors (especially newer ones) need to see that BTC is holding some sort of technical level. I think that a lower trendline test can give them that. When? Time will tell. I'm pretty confident, however, in the projected path that I have set for BTC.
In conclusion, my theory on what the future holds for BTC price action takes root in market structure as well as the fundamental factor that mass adoption of cryptos is occurring. I have drawn onto the chart fibs for the previous 2 cycle peaks and lows as well as a dynamic pullback structure I think BTC could follow before moving into more ATH's.
Market structures in a chart are basically just areas of support and resistance. These areas can easily be identified by where price has been or where it appears to be going based on previous data. It is my belief that using market structures to predict price action over the long-term is essential to simplifying trading assets.
On the left chart, I have outlined the bullish channel that BTC has been making since around 2014. I am not including previous data to draw these lines simply because BTC was still extremely lucrative and un-adopted by the markets. (Something I will touch on later.) Looking at current pricing, we can see that BTC is lying smack dab in the middle of this price channel. Take a look at the peak in 2013 to the peak in 2017. We can see that these 2 points allow us to create our upper trend line as well as give us a defined time cycle peak to peak. Peak to peak took just under 4 years. This is important because we can see now that the 4 year cycle theory is pretty much invalidated since we aren't at the upper trendline at current. How do I venture to explain this? Simply put, the cycle is lengthening. Just like any other asset, the early bird gets the worm, and over time returns for later birds are diminished. The market cap is raised and it becomes harder and harder for bulls to push price up at the previous rate. This isn't to say that BTC will never reach those levels, just that it may take a bit longer.
Now then, we can all see plain as day that cryptocurrency is going nowhere, it's here to stay. This is because of mass adoption. The signs are everywhere, exchanges popping up, countries buying up Bitcoin, celebrity endorsements, etc etc. Because this is occurring, it is my belief that BTC in particular will create some sort of mass adoption floor. I see this forming between 20k-30k.
So where does price go and when? To be honest I don't know, and neither does anyone else for sure. I'm a bull, so I think we go up eventually. But I also think there needs to be some sort of test on a market structure to send us higher. The fear still exists and to send prices higher, investors (especially newer ones) need to see that BTC is holding some sort of technical level. I think that a lower trendline test can give them that. When? Time will tell. I'm pretty confident, however, in the projected path that I have set for BTC.
In conclusion, my theory on what the future holds for BTC price action takes root in market structure as well as the fundamental factor that mass adoption of cryptos is occurring. I have drawn onto the chart fibs for the previous 2 cycle peaks and lows as well as a dynamic pullback structure I think BTC could follow before moving into more ATH's.