Most Popular
1. It’s a New Macro, the Gold Market Knows It, But Dead Men Walking Do Not (yet)- Gary_Tanashian
2.Stock Market Presidential Election Cycle Seasonal Trend Analysis - Nadeem_Walayat
3. Bitcoin S&P Pattern - Nadeem_Walayat
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
4.U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - Raymond_Matison
5. How to Profit from the Global Warming ClImate Change Mega Death Trend - Part1 - Nadeem_Walayat
7.Bitcoin Gravy Train Trend Forecast 2024 - - Nadeem_Walayat
8.The Bond Trade and Interest Rates - Nadeem_Walayat
9.It’s Easy to Scream Stocks Bubble! - Stephen_McBride
10.Fed’s Next Intertest Rate Move might not align with popular consensus - Richard_Mills
Last 7 days
Why President Trump Has NO Real Power - Deep State Military Industrial Complex - 8th Nov 24
Social Grant Increases and Serge Belamant Amid South Africa's New Political Landscape - 8th Nov 24
Is Forex Worth It? - 8th Nov 24
Nvidia Numero Uno in Count Down to President Donald Pump Election Victory - 5th Nov 24
Trump or Harris - Who Wins US Presidential Election 2024 Forecast Prediction - 5th Nov 24
Stock Market Brief in Count Down to US Election Result 2024 - 3rd Nov 24
Gold Stocks’ Winter Rally 2024 - 3rd Nov 24
Why Countdown to U.S. Recession is Underway - 3rd Nov 24
Stock Market Trend Forecast to Jan 2025 - 2nd Nov 24
President Donald PUMP Forecast to Win US Presidential Election 2024 - 1st Nov 24
At These Levels, Buying Silver Is Like Getting It At $5 In 2003 - 28th Oct 24
Nvidia Numero Uno Selling Shovels in the AI Gold Rush - 28th Oct 24
The Future of Online Casinos - 28th Oct 24
Panic in the Air As Stock Market Correction Delivers Deep Opps in AI Tech Stocks - 27th Oct 24
Stocks, Bitcoin, Crypto's Counting Down to President Donald Pump! - 27th Oct 24
UK Budget 2024 - What to do Before 30th Oct - Pensions and ISA's - 27th Oct 24
7 Days of Crypto Opportunities Starts NOW - 27th Oct 24
The Power Law in Venture Capital: How Visionary Investors Like Yuri Milner Have Shaped the Future - 27th Oct 24
This Points To Significantly Higher Silver Prices - 27th Oct 24
US House Prices Trend Forecast 2024 to 2026 - 11th Oct 24
US Housing Market Analysis - Immigration Drives House Prices Higher - 30th Sep 24
Stock Market October Correction - 30th Sep 24
The Folly of Tariffs and Trade Wars - 30th Sep 24
Gold: 5 principles to help you stay ahead of price turns - 30th Sep 24
The Everything Rally will Spark multi year Bull Market - 30th Sep 24
US FIXED MORTGAGES LIMITING SUPPLY - 23rd Sep 24
US Housing Market Free Equity - 23rd Sep 24
US Rate Cut FOMO In Stock Market Correction Window - 22nd Sep 24
US State Demographics - 22nd Sep 24
Gold and Silver Shine as the Fed Cuts Rates: What’s Next? - 22nd Sep 24
Stock Market Sentiment Speaks:Nothing Can Topple This Market - 22nd Sep 24
US Population Growth Rate - 17th Sep 24
Are Stocks Overheating? - 17th Sep 24
Sentiment Speaks: Silver Is At A Major Turning Point - 17th Sep 24
If The Stock Market Turn Quickly, How Bad Can Things Get? - 17th Sep 24
IMMIGRATION DRIVES HOUSE PRICES HIGHER - 12th Sep 24
Global Debt Bubble - 12th Sep 24
Gold’s Outlook CPI Data - 12th Sep 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

What’s next for Bitcoin Price – $56k or $16k?

Currencies / Bitcoin Jan 24, 2021 - 02:49 PM GMT

By: Chris_Vermeulen

Currencies

Bitcoin traders and enthusiasts are riding the wave after the incredible rally from $9,000 to $42,000 throughout Q4:2020.  It certainly was an incredible run – more than quadrupling in value in less than three months. Now we find ourselves in an early 2021 corrective phase which will end in either another Breakout/Rally attempt or an Excess Phase (Blow-off) Top.  This article highlights both potential outcomes because at this stage it is difficult to determine a single high-probability outcome.

Before I continue, I urge readers to review our How To Spot The End Of An Excess Phase article from November 27, 2020. You can re-read it at www.thetechnicaltraders.com/how-to-spot-the-end-of-an-excess-phase-part-ii/. This is an excellent primer for the content of this current research article.


What A Bitcoin Breakout Would Look Like

Let’s take a look at what a Breakout/Rally technical setup in Bitcoin would look like in the near future.  Looking at the chart below, price must hold above critical support near $27,800 as any new lower low would constitute a continuation of the Bearish downtrend.  Therefore, any renewed rally attempt would likely initiate from levels near $28k (or just below this level). 

Using a Fibonacci Price Extension, we can see the $46,280 (0.618) and the $56,190 (1.0) Fibonacci Extension levels are key potential upside price targets if a breakout/rally resumes.  We are measuring the most recent bottom, in late November, to the current high price level, then aligning the Fibonacci price extension bottom to the current price lows (near $30,260).  This allows us to see future potential price target levels if this rally/uptrend continues.

Again, it is critical that the support level near $27,800 holds and price lows do not breach this level.  Any breach of this support level would constitute a “new lower low” in Fibonacci Price Theory – which suggests a downtrend is continuing.

What A Bitcoin Breakdown Would Look Like

The opposite aspect of this recent peak is that it may be setting up as an Excess Phase (blow-off) Top, as we can see the #1 (extreme rally) and #2 (sideways flag) setup in price recently.  The completed Excess Phase pattern consists of five total processes:

  1. The extreme upside price rally
  2. The TOP, followed by a moderate downside price trend that sets up the FLAG
  3. The breakdown of the FLAG trend, which then targets a broader support level
  4. The breakdown of that support level, which then targets the ultimate bottom/momentum base level
  5. Once the ultimate bottom/base is established, then a new momentum/bottom begins and trend usually attempts another rally attempt.

Be sure to sign up for my FREE webinar that will teach you how to find and trade my BEST ASSET NOW strategy on your own!

Obviously, when you look at the Bitcoin to USD chart (below), it is fairly easy to identify the #1 and #2 setup of the Excess Phase Top.  The next question is will price breakdown and attempt to move below the $27,800 recent low support level or will it hold above this level, prompting another rally attempt.  If price breaks below the $27,800 support level (near recent lows on January 11, 2021), then we need to be very cautious of the broader Excess Phase Top process continuing and a continued breakdown resulting in lower price trends.  If the $27,800 support level holds, as we suggested in the Breakout/Rally example above, then there is a strong chance that $42k to $56k could be the next upside targets.

I understand that readers and traders want to have more clarity on the direction Bitcoin will go, but ultimately, we need price to complete the next phase of this process. It all hinges on the current $27,800 support level right now.  As long as that support level holds, then there is a very strong possibility that another upside price rally will begin at some point in the future.  If it is broken and the Flag Breakdown continues, then it would appear the Excess Phase Top has moved into Phase #3 and will likely continue to unfold.

Why wait for Bitcoin to begin a new trend – Stock sectors are moving

Even though we will wait and see on Bitcoin, we see a wide variety of other sectors to play instead of holding out for the right Bitcoin trade. We have seen some explosive trading opportunities in sectoral ETFs despite the pullback in Bitcoin and other assets. One of our Best Asset Now Hotlist ETFs has grown by 23.55% since we identified its trigger a short 9 days. Some of our subscribers that traded options on that BAN Hotlist trigger did really, really well!

If you love Cryptos or not, don’t miss out on the opportunities that are setting up in the broader, global market and stock sector ETFs with our BAN strategy. If you want to improve your own trading strategy and win-rate, then you need to subscribe to BAN Trader Pro to get my daily BAN Hotlist, my pre-market video walkthrough of the charts every morning, and my BAN strategy trade alerts.

Stay safe!

Chris Vermeulen
www.TheTechnicalTraders.com

Chris Vermeulen has been involved in the markets since 1997 and is the founder of Technical Traders Ltd. He is an internationally recognized technical analyst, trader, and is the author of the book: 7 Steps to Win With Logic

Through years of research, trading and helping individual traders around the world. He learned that many traders have great trading ideas, but they lack one thing, they struggle to execute trades in a systematic way for consistent results. Chris helps educate traders with a three-hour video course that can change your trading results for the better.

His mission is to help his clients boost their trading performance while reducing market exposure and portfolio volatility.

He is a regular speaker on HoweStreet.com, and the FinancialSurvivorNetwork radio shows. Chris was also featured on the cover of AmalgaTrader Magazine, and contributes articles to several leading financial hubs like MarketOracle.co.uk

Disclaimer: Nothing in this report should be construed as a solicitation to buy or sell any securities mentioned. Technical Traders Ltd., its owners and the author of this report are not registered broker-dealers or financial advisors. Before investing in any securities, you should consult with your financial advisor and a registered broker-dealer. Never make an investment based solely on what you read in an online or printed report, including this report, especially if the investment involves a small, thinly-traded company that isn’t well known. Technical Traders Ltd. and the author of this report has been paid by Cardiff Energy Corp. In addition, the author owns shares of Cardiff Energy Corp. and would also benefit from volume and price appreciation of its stock. The information provided here within should not be construed as a financial analysis but rather as an advertisement. The author’s views and opinions regarding the companies featured in reports are his own views and are based on information that he has researched independently and has received, which the author assumes to be reliable. Technical Traders Ltd. and the author of this report do not guarantee the accuracy, completeness, or usefulness of any content of this report, nor its fitness for any particular purpose. Lastly, the author does not guarantee that any of the companies mentioned in the reports will perform as expected, and any comparisons made to other companies may not be valid or come into effect.

Chris Vermeulen Archive

© 2005-2022 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in