- Bitcoin and Ethereum came into our target zone and are now bouncing nicely.
- While the low could be in, we still favor lower to come after a larger bounce concludes the upside.
- Fundamentals are interesting, but using sentiment manifested in Fibonacci price targets is the only way to determine support and entries into cryptocurrencies.
In my last article on Bitcoin, I stated that it was in the Buy Zone with a price target of $2,488-$4,175 and disclosed that we had gone long. In this article, I will provide updates to our price expectations going forward for Bitcoin and Ethereum.
Note that it is possible to count the downside structure complete in the crypto sector and that the low is now in, BUT we do not think that is likely at this stage. We are still expecting lower levels will be seen before the completion of this Minor Degree Wave 4, but not before further upside first. That said, however, we have been clear with our subscribers that the low could be in, hence our reason for taking a non-leveraged long position in BTC (BTC-USD). Below are our long- and intermediate-term expectations for price in BTC and ETH (ETH-USD).
We are positioning for a move in Bitcoin up to a minimum of $31,677, and what seems more likely, a move up to $68,697 – see Bitcoin Weekly Chart below.
The question now is whether or not the low is now in. While it’s entirely possible the low is in, we still expect a bounce up to the $5,800 region, followed by a final 5th wave of C of Minor Degree wave 4 into the $2,669-$2,233 region. See Bitcoin Daily Chart below.
No fundamental observations at this time.
We are positioning for a massive move up in Ethereum to the $3,800-$6,800 region. See Ethereum 3-Day Chart below. Like Bitcoin, it is possible the low is in, but at this time we are still expecting another low first.
After a bounce into the $199-$302 region, we expect one more low into the $69-$54 region. See Ethereum Daily Chart below.
No fundamental observations at this time.
As I stated in both of my last two articles:
Cryptocurrencies represent the proverbial “raw nerve” of crowd sentiment, and as I previously discussed, there is no better measure of crowd sentiment than applying long-term logarithmic Fibonacci extensions to the underlying wave patterns to volatile instruments like those of digital currencies. Macro fundamentals are no doubt relevant in understanding how digital currencies and block chain technology fit into how commerce will be conducted in the future. However, in practical terms of where to enter long positions, or where to exit and stand on the sidelines, a discussion of the macro fundamental merits of Bitcoin or other cryptocurrencies belongs with a glass of brandy and a comfortable chair next to a nice warm fireplace.
For our purposes, we see some great long-term swing trade opportunities setting up in Bitcoin. For those willing to participate in two key trades in the coming years, there's an opportunity to amass significant profits. This is an extremely volatile sector, so when you do invest, hold your nose during the huge value swings that will occur. The simplest way to ensure you stay the course is to right size your exposure. It doesn’t take a lot of capital to make a lot of return, so don’t feel as though you need massive exposure to cryptos, and in fact, for most I would advise against anything more than a very small portion of your capital.
It is possible the low is in, hence the reason we suggested to our subscribers to take an initial non-leverage long position. However, we do think the odds of seeing another low is still more likely. With such enormous upside at stake, we always like buying at key support in the event that the expected new low fails to show up to the party, and where we would normally expect some reaction. This is exactly what has transpired with BTC.
Shortly, we will be introducing a Marketplace service called The Active Investor, where those following Bitcoin, the S&P 500, gold, and a host of other sectors can follow along with our analysis on a daily and weekly basis. For those who like to follow the top market cap crypto currencies, we will also be introducing an independent crypto currency site as well. I will keep you abreast of further developments.