Sirwin
Sirwin

Quiet Before the Bitcoin Tsunami? (Weekly Forecast)

By Biz Wisdom | Crypto Daily FX | 12 Apr 2021


Bitcoin rallied a bit last week, starting the week off slow before picking up steam late into the week before reaching above $60K over the weekend, settling right around $60K at the weekly close. This is a bullish candle as BTC tests the $60K level once again, even if briefly, indicating upward pressure ready to burst.

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(April 11, 2021  8:30PM EST)

Short-Term: 

Bitcoin looks ready to break out above the horizontal resistance level around $60K for the first time, increasingly flirting with $60K intraday over the past few days with a few small breaks higher over the weekend. This type of price action typically preludes a break higher, which may happen overnight in Asia markets or in US east coast hours when NY traders are back at their desks.

Image

 

The bullish air is returning as institutional traders continue to enter the space through GBTC, the Canadian ETF, Bitcoin-backed futures, and more. It seems it's only a matter of time until a Bitcoin ETF is approved, and it's possible Grayscale's GBTC fund may even be successful in converting from a publicy-traded trust to a US ETF, an earmark accomplishment in the mainstream adoption of crypto. 

 

When you zoom out on the Bitcoin weekly chart (shown above), you can more clearly see how early we are in the current bull market cycle; not even halfway through. Having only had one real parabola from $10K - $42K, Bitcoin appears only just now to be starting its second. Judging by my current Elliott Wave Count and the market psychology of bull markets, we should soon see the beginning of the notorious 'W3 of iii' which should lead to intense price discovery and appreciation, likely up to and into the six-figures. 

 

We should see continued bullishness and a breach of $60K in the next week or so, which is not a significant resistance level so we should see Bitcoin break higher by April the latest. Once Bitcoin breaks $60K, and it's really just a matter of time (days), we should see a run-up to $70K, $80K, and over the medium-term, $100K. But to keep things in perspective, $10K moves are likely to be the norm going forward. 

 

After all, Bitcoin historically experiences seasonal weakness in Feb-March. If seasonality is any indication of what’s to come for Bitcoin, we should see Bitcoin gear up over the next few weeks for a precipitous rally to new highs in April-May but starting as early as late March. "The herd" of institutional investors is entering the space in rapid succession as we now regularly see weekly headlines from the likes of Morgan Stanley, Citi, etc. announcing 9+ figure interest in the space. 

 

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Returns by month — outliers excluded. Source: CoinMetrics, daily bitcoin price data for 18/07/2010 to 31/01/2020.

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BTC Seasonal Performance Pattern Since July 2010 (Source: Tradingview)

 

 

Long-Term: 

The confluence of my EWT Wave 3 projection and Bitcoin monthly seasonality points to a rally that could send Bitcoin to about $95K by summer 2021 and a possible cycle peak as early as Q4 2021 somewhere in the range of $125K, or possibly much, much higher.

My crude Elliott Wave count for Bitcoin on the weekly chart shows a possible $94,000 Wave 3 target for Bitcoin later in 2021. By that measure, based on the price action lately as shown above, we are well within the projection and en route to this projection, which should take some time to play out but may only accelerate as Bitcoin's market cap grows, thus enabling conservative institutions on the sidelines enough justification finally enter Bitcoin long positions. This also coincides with multiple other models, such as Plan B's Bitcoin Stock-to-Flow Model which plots a minimum $100K target that extends up to nearly $300K, as well as the logarithmic regression which projects a $115,000 - $140,000 Bitcoin price within the next year.

Weekly Newsflow:

  • Real Estate Billionaire Rick Caruso buys BTC, accepts Bitcoin for rent payment at residential and retail properties
  • Ukraine officials hold over $2.6 billion in BTC
  • JP Morgan eyeing Bitcoin's contango, releases bullish report
  • Elon tweets "Moon soon"

The bigger Bitcoin gets the more legitimacy it gains = more institutional investors can justify taking initial positions, which would only add to the disproportionate demand vs supply. 

Support: Immediate support around $55K, then $52K; Floor at $50K.

Resistance: $60K, then $70K, $80K, then $100K. 

 

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Biz Wisdom
Biz Wisdom

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