Let's take a closer look at the situation we currently have on Bitcoin. From the hole we had in August 2015 at the level of 162 $, the BTC rate is systematically growing. This is more than two years of boom on Bitcoin. Since March 2017, when the rate reached a ceiling of over $ 1,000 and exceeded earlier ATH ($ 1,173), increases accelerated. From that moment on, the course twice reached new ATH at important levels: the first at $ 3,000 and the last at $ 4,970. We are currently over $ 5,000 after breaking the previous ATH established on September 2 this year.
That would be enough when it comes to historical data. Most certainly would like to know where the Bitcoin course is going and how long the increases will continue. This question can not be answered unequivocally. No one can predict the future. An additional difficulty is the fact that the current BTC bull market is very different from the previous bubbles we have had on Bitcoin since the beginning of this currency. Despite this, I will try to meet this heavy task and present my point of view on the current market situation.
Stock market analysts are trying to predict the future on the basis of history. As I mentioned earlier, the current increases in BTC are different from those we had in 2010 to 2013. The current bubble on Bitcoin takes much longer and is much more extensive than before.
At the beginning, we must realize that the price of a given stock on the stock exchange is shaped by the supply and demand that is generated by investors. The important thing is that investors are usually not driven by common sense and cool calculations when buying or selling on the stock exchange. This unfortunately gives birth to some speculative bubbles. What we are currently observing on the Bitcoin market is undoubtedly such a bubble.
In the above Bitcoin chart, we can see a repeated pattern of breaking and correction. The first outing was in April 2017. The rate broke previous ATH (1173 $) and reached the local summit of 3003 (increase by 156%). The next issue was in August this year, the rate broke through $ 3003 and went up to $ 4,970 (an increase of 65%). As we can see, the second run was smaller than the first one. We had the last deportation two days ago, on October 12. The rate broke $ 4,970 reaching new ATHs at $ 5,920 (an increase of 19%). Currently, the rate is around $ 5,600.
How high can the course take before we have another deeper correction? Considering the decreasing thrust, the second break was 60% less than the first, one could expect a peak around $ 6,260. This value came from simple calculations and extrapolation of previous increases, but does this mean that the rate will reach new ATH at this level and turn back? Not necessarily, I would say a very big coincidence would be if the course reached exactly $ 6,260 and set its peak there. Assuming that we have the last wave of growth, before changing the trend on Bitcoin, it may turn out that the irrationality of investors in this last phase will be seen in all its glory and the rate will go up to $ 10,000 or above.
It's nice, it's cool with so much text and no details except $ 6,260 which is just as sure as the fact that it will be snowing next month. So why all this fun at AT? It's not about predicting the future for a cent, because it's not feasible. The point is to find yourself on the market and, thanks to repeated patterns, try to estimate the potential profit and risk that accompanies it. That's why I draw lines of support and resistance because thanks to them, I know where we are and what is the strength of the market. The more inclined the line (the larger the angle), the greater the strength of the market.
Currently, the target for investors may be around $ 6,200 and after crossing it, we enter the round numbers of 10,000. dollars and 100 thousand yuan for one Bitcoin. Support is the nearest continuous purple line and dotted blue located on the previous ATH. Breaking these lines may herald a change in the trend, especially the breakdown of support at the last ATH at $ 4,970.
Summary
Bitcoin is currently in a very strong uptrend. In the last months he had two strong adjustments that did not reverse the trend. It should be taken into account that the next major correction may turn out to be the last one and it will turn into a downward trend. The higher the summit, the greater the chance for such a scenario. One should also take into account the fact that the price is a resultant of the actions of many investors whose behavior can not be predicted. This can cause irrational increases and the price of Bitcoin will reach $ 10,000 or it will break down and within a few days we will see $ 1000.