ASX Watch: Scenarios for Bitcoin’s Next Move

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A 143% rise in just over 100 days. That’s what bitcoin has done lately.

Is this the start of the next great run? Or are you at risk of walking into a trap?

Confession: I’m not sure I know either way.

But I’m excited in the short term for the price to keep rising.

It’s to do with some of my proprietary trading signals.

Remember, I’m a technical analyst. I’m less interested in taking a fundamental view compared to what the charts are saying right now.

You may have heard of technical analysis. Most investors have in some way. But have you heard of time counts?

I doubt it. But you should do some study on these.

Here’s the short version (and a common assumption in the context of technical analysis): Previous price action influences the market now, and in the future.

A time count gives us a pre-determined date of when a share — or, in this instance, a cryptocurrency — has a high probability of changing direction.

A rising market could start falling…or vice versa… A falling market could reverse and start trending higher.  

A time count is based on historical data, and any trader or investor can identify these dates well in advance.

Once we pinpoint the dates when the market is expected to change direction, we simply count forward in time (time count) and pinpoint the next date.

Easy, right?

Well, it does take a bit of practice. I may delve into this a bit more in the future.

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Alright, back to bitcoin!

What’s next for bitcoin?

I’ve found time counts very useful in understanding bitcoin’s trading moves. They seem to work very well.

Bitcoin tends to move in bursts that average approximately 11 days.

You can find these dates by marking each major high and low on your chart.

Once you have marked these major turning points, look at the dates.

You will find that these dates tend to show up repeatedly.

There’s the secret.

Let’s look at how things are shaping up as of now…

Source: Optuma

The bulls’ forecast!

Pay special attention to the green vertical strip.

If you’re bullish on bitcoin, this is going to interest you.

In an ideal situation, the price of bitcoin will rise for the next six days. It will then hit resistance around the 38.2% retracement level, marked by the bottom red line on the chart.

The market could sell off here, for approximately two days, to form a higher low (hopefully around the green vertical strip). Then the market could continue to rise.

I expect bitcoin to dip, but not too much.  We’ll be watching to see if it goes below the previous low point.

I’d say bitcoin will keep rising if it doesn’t fall too much.

I know that may have been a bit confusing, so I have highlighted a potential scenario for you below.

Source: Optuma

Let me explain what’s happening in this chart.

I have highlighted what I believe could be the price action of bitcoin over the next week. I anticipate bitcoin to rise and hit the red line. Following that, bitcoin may fall into the time count (marked in the green rectangle). This fall may be minimal and could set up bitcoin for its next run.

So, there you have it. That’s how you use time counts to make forecasts in the bitcoin market.

This article is not a recommendation to buy or sell BTC. It’s an update only. I hope you found it helpful.

Until next time,

Jim Rickards Signature

Jonathan Evans,
Analyst, Profit Watch

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