One of the questions we got this week from our readers is to provide our take on the price of Bitcoin. We would formulate the question as “how high can the price of Bitcoin rise”.
The ‘easy’ thing with Bitcoin is that is moving independently from other markets and assets. We have not found any correlation, so far, with assets like stocks, gold, commodities, bonds, etc. Moreover, Bitcoin is not part of a complex, like precious metals or commodities, in which several assets should be looked at before deriving a conclusion. In other words, the Bitcoin price chart is the only chart to analyze.
However, the more fundamental factors driving the price of Bitcoin are rather unknown, at least as far as we can see. Bitcoin is a clear supply/demand driven asset, which then confirms again that analyzing the price chart is the only and most obvious thing to do.
Bitcoin price forecast based on the long term chart
Bitcoin’s long term chart is simple: after a parabolic rise, it has fallen and is now rising in a more steady (read: healthy) way. Bitcoin seems ready to test all-time highs. We expect a lot of resistane around $1100, so it’s not likely that it will take out the $1100 level with the first attempt. Again, that’s what we anticipate, it’s the most likely scenario though things could turn out differently (lower probability scenario). The most obvious scenario is that a sharp fall will take place (most likely to the 800 level), followed by a new attempt to test all-time highs.
So we personally believe that the next sharp correction would trigger a buy signal.
This is what the chart tells us currently. Whether it will turn out exactly how we forecasted it or not remains to be seen. The scenario we outlined is simply the most obvious one with the current chart which has a text book setup.
We remain firm that the Bitcoin penny stocks we discussed recently will rise sharply in the coming weeks and months. We hold to our holdings, and consider adding to them.