This is to follow up with my earlier price prediction posts. In my last one I said that bitcoin would first correct to at least $6,600 (2/3 of my targets were hit, down to as low as $6,000) to complete wave 4 and then start a wave 5 that “could take prices well above $10,000”).
As this is precisely what happened I am now updating my scenario. Please note that I would not really assign more than a 66% probability to this one as I have a hard time to see bitcoin correct this much at this point in time. Though perhaps that is exactly the reason why it is likely to happen (after all I am just human and I suffer from the same behavioral biases as all of us).
Current situation
As you can (hopefully) see on the charts, wave 5 is in full force. I actually think we are in the process of the bubble really taking off, very similar to what happened in the Nasdaq 100 at the end of 1999. It then rose another 100% in very short time before it crashed. In the crypto world “a very short time” could well just be a few days or weeks. As this move started at about $8,300 it could mean that this wave ends above $15,000. To be honest — I have no idea how high it will rise, but I can see that the sell order books on most exchanges are practically empty. So every time the price takes a “round number” hurdle, it can easily shoot up another $500–800 without much resistance.
Outlook
Wherever this current move ends, it is likely that it will be followed by a pronounced correction. Given it would mark the end of a 15 months bull cycle, I would expect a full A-B-C correction potentially going as low as $5,500 to $7,500. It is unlikely that such a move would happen without a catalyst, but I can see the following three possibilities for that:
a) Euphoria around the launch of Futures culminates when they actually launch on CME, potentially sending the price up 25% or so on that day and then giving people enough reasons to sell in droves. Alternatively in this same bucket any kind of issues around the final authorization for CME Futures trading (note they will launch “pending regulatory approval”) could be a more negative catalyst
b) The ICO bubble bursting on harsh new SEC regulation or even the SEC bringing numerous cases at the same time and some founders facing jail if they cannot reimburse investors
c) The Tether construct blowing up in the face of a few exchanges. Other people have written enough about this topic but I can see almost no scenario in which the US government tolerates a company with known human actors to deal with their currency in this way, while I do not believe for a second that USDT “bought” for bitcoin when these are sold on an exchange actually get converted into real USD. There probably already are 5 USDT per actual USD that Tether may or may not have on an undisclosed bank account. A crash in USDT price would hurt quite a few exchanges. I even think today it should not trade higher than $0.2 per USDT…
So in summary, I think we are about to see a higher high on btc than anyone would have thought possible, but at this point in the rally I would be extremely cautious with new positions and the above is my best guess as to where we are going from here. It does remain just a personal opinion and a guess.
Finally, the usual important disclaimer: This is not investment advice, this is my personal and not my professional opinion. Any asset can go to zero.
