How high will Bitcoin go?
For most investors the question uppermost in their minds must be “How high will Bitcoin go?” This is the hardest money asset on the planet, so surely a few multiples of the current price should be in order before Bitcoin falls into its customary year-long bear market?
Current Bitcoin price action is par for the course
As things currently stand, holding Bitcoin cannot be much fun. If you are an investor who jumped onto the Bitcoin bandwagon when the king of the cryptocurrencies was around its high of $73,600, you have watched it go sideways for about two and a half months so far.
However, this period of consolidation and accumulation is par for the course, and the case for Bitcoin moving upwards at some point in the near future is a reasonably solid one. The current price of just over $68,000 is only about 8% from the all-time high, and breaking this and confirming above will be the signal that Bitcoin is going to go higher.
When the price breaks above an all-time high it then goes into what is called “price discovery”. This means that there are no longer any resistance levels from previous price action, so technical analysis becomes a bit like feeling around in the dark as to where the price might go.
The amazing Fibonacci sequence
That said, there is one tool left in the box of the technical analyst which is incredibly powerful. It is based on pure mathematics and has been around for centuries. This is the Fibonacci sequence.
When used on previous price action for Bitcoin (or for absolutely any asset) the Fibonacci sequence levels are amazingly accurate at confirming or predicting major support or resistance areas.
Source: TradingView
For example, if one draws a Fibonacci from bottom to top of the last big price surge, the most important Fibonacci level of 0.618 shows the area of major support, and looking left across the chart to the 2021 price action, this lines up perfectly with a major support level there as well.
As well as giving support levels, the Fibonacci tool can predict the resistance levels going out into future price discovery. So this is what we will use to see where Bitcoin might go.
Possible Bitcoin targets
Source: TradingView
Zoomed out in the same time frame, we can see the Fibonacci extension levels. They do generally appear to coincide with the target levels that are bandied about on social media.
The conservative target of $102,000 is the next level at the 1.618, and then we have $156,000 at 2.618, $210,000 at 3.618, and $243,000 at 4.618. Of course there are others that are higher than this, but most of these would probably please most investors.
One final thing. The Bitcoin price is currently still struggling to get above the 1.0 Fibonacci. Is there a possibility that the price could continue to roll over from here, and that this is the top? Unlikely, but nothing is impossible in markets. It’s always best to never discard any scenario.
Happy investing.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
Credit: Source link
