46 Days It Took Bitcoin To Jump From $ 6900 To $ 20,000 In 2017, Is The Story Repeated?
Bitcoin has managed to sweep all the forecasts of the most conservative and detractors of the ecosystem, by achieving a jump from levels of seven thousand to just over eight thousand per unit, a jump of just over $ 800 in just 24 hours that has taken speculate to many how far this new bullish rally of the leading cryptocurrency could go.
At the time of writing, BTC quotes at a spot price of $ 8160.63 with a profit of + 10.06% in the last 24 hours and a capital market that is worth $ 144 billion.
The market has also benefited and presents a profit of almost $ 3 trillion dollars on the last day that allowed it to anchor at the level of $ 240 billion with a BTC dominating the scene with almost 60%.
This upward movement has generated again the momentum that many expected to be encouraged on the one hand to ignite the miners, which has generated an increase of the hashrate to maximum levels of all time; and on the other the possible cautious entry of institutional money to the ecosystem that has generated this support for higher prices, given the news of Bakkt to launch tests this summer combined with the growing tension of the Sino-US trade war. That originated this week collapse of the world markets, being the Gold and the Bitcoin the safeguard of value for many in difficult times of the world economy.
Today, we’re pleased to update you on the launch of bitcoin futures contracts developed by Bakkt in collaboration with ICE Futures U.S. and ICE Clear U.S. https://t.co/8G3YcFbPl2
— Bakkt (@Bakkt) May 13, 2019
Short-term investment horizon
In the short term let’s analyze how far BTC could go. According to the 1H graph for the cryptocurrency, its upward trajectory started on April 22 is at its highest in months, going from $ 5230 to the current price of $ 8100 in less than a month, + 54.8%.
According to this graph, this rally could be briefly stopped for price correction and liquidation of positions taken by the generated FOMO, and thus the ‘whales’ strengthen positions.
According to the EMA 30 vs. 100 day cross, this correction could take place next Thursday, May 16, which would lead BTC to retreat in its bullish rally to positions close to S1 ($ 6890).
This sentiment is supported by the RSI indicator, which after the maximum overbought generated (RSI> 80), is generating a lower maximum in recent days.
To counteract this possible scenario, let’s look at the indicators and their behavior in the same time horizon analyzed.
In this case, the Bollinger Bands have begun to close, decreasing the amplitude of their dispersed cloud and this indicates the end of price volatility, at least in the short term. In addition, the last sales have failed to break the upper band, which projects a possible exit break to the lower band.
Aroon Uptrend begins to fall, as well as his counterpart that is traveling faster to the bottom, to then resume positions in a possible bearish cross.
The Stochastic indicator has made a crossing at its extreme downward, which could indicate that profit withdrawal is on the way for many cautious investors. However, its levels are still high, and there is nothing certain, given the volatile extreme close to overbought levels ((bull run).
To conclude with this investment term, we analyze the possible correlation between the swing of maximum-minimum-maximum prices and the respective values of RSI that allow us to project a behavior of the cryptocurrency based on the foregoing.
To do this, we analyzed the behavior of the RSI values and their time-lapse taken for any sudden change in Bitcoin prices in the last month since the uptrend in short.
The previous chart shows the important changes in RSI vs PRICE for BTC in the last 30 days, to try to confirm the projected behavior. By averaging, we find that the possible large change in values will be approximately 5.5 days, as the chart indicates.
Thus, BTC according to EMA CROSS and RSI could generate an ELLIOT WAVE pattern according to the projected ABC wave (purple line). That is, BTC could reach the maximum of R1 ($ 8468.30) and then fall back to point B or close to S1 ($ 6900) before completing the last wave at higher levels of R1.
Of course, all this theoretical movement is subject to no abrupt changes in external factors that lead to increase the volatility of Bitcoin.
Medium term investment horizon.
Bitcoin the last time he managed to pass the $ 6900 barrier was in 2017 when he had an upward rally that went from that value to a cap about $ 20,000 in just 46 days. This rally was started on November 1, 2017, and ended in mid-December of that year, before the crash of the cryptocurrency.
If this scenario is extrapolated to the current situation, it is worth asking if the story will be repeated so that Bitcoin has a jump of just over 220% in its price that takes it to the end of June to the much coveted twenty thousand dollars of value.
For this, we will try to analyze if this pattern is possible, and nothing better than observing the direct correlation of the buying-selling sentiment (RSI) that drives an asset price versus its historical price changes equivalent to the takeoff similar in percentage terms to the projected.
RSI vs Price.
Historically there are three important percentage change events similar to what many have speculated to occur since crossing the $ 6900 barrier, this is historical profit BTC breaks greater than 220%.
- 06/30/2013 to 11/16/2013. In this period of 136 days, Bitcoin managed to take off 225.55% in its price. In this period the RSI rose from 18.7 to 95.96 (+ 413.15%).
- 03/15/2017 to 06/10/2017. In a period of 83 days, BTC had an overall of 219.11% in its price. RSI changed from 33.47 to 85.53 (+ 155.54%).
- 10/15/2017 to 12/08/2017. On this occasion, BTC took off 221.42% in a period of 54 days. In this case, the change in the RSI was seen from a low of September of that year at 30.17 to a maximum of the period at 93.95 (+ 211.4%).
- Also, as we have seen before, BTC DURING the last crossing of the $ 6900 barrier to the final rally with $ 20,000, its push was up to 190% and a change of RSI from 66.84 to a maximum of 93.96 (+ 40.57%)
- With these data and extrapolating, we find that the next big run bull up to levels of 20k could happen is in 91 DAYS for a takeoff of prices greater than 220% and an RSI> 94, which allows since it started THIS May 10, 2019, the current tendency to catapult to previously raised levels.This scenario coincides with another one occurred before the 20k, and it is that BTC took two months to arrive from 5000 to 20,000 in the year 2017.
Time will tell us once again if Bitcoin is possible to estimate its behavior through numbers and we are lucky or fall into the bottom trap.
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