BTC 2021 Bull Market Outlook - A technical Perspective
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Hi all. I am new to Reddit but not new to Bitcoin and analyzing the BTC market. Outlining my thoughts on navigating this bull market for some of the new users to understand what we can POTENTIALLY expect over the next year. I AM NOT A FINANCIAL ADVISOR, JUST A GUY SITTING ON HIS COMPUTER IN THE BASEMENT. THIS IS FOR ENTERTAINMENT PURPOSES ONLY AND SHOULD NOT BE TAKEN AS FINANCIAL ADVICE. I ALSO LOST ALL MY BITCOIN PRIVATE KEYS IN A TRAGIC BOATING ACCIDENT. CEST LA VIE. When looking at the current bitcoin bull cycle we are in I find it's helpful to understand what previous bull cycles look like to determine what we might be in for over the coming months. The last couple days have seen a pump due to some prominent individuals who are advertising bitcoin. We have retraced all those gains and i think this is A VERY GOOD THING. You see this ELON candle saw a lot of weak hands get long, likely over-leveraged and most probably lost money as they were liquidated on the way down. A LOT of money is lost, counterintuitively, in bull markets due to irresponsibly leveraged bets. The organic sustainable rises in bitcoin come from folks who are buying, and holding for the long term. Storing the scarce supply of btc and leaving the demand to gobble up what's left at higher prices. But I digress...lets zoom out. Bitcoin likes to close gaps, and these gaps help us figure out likely support zones and create targets for tops in the market. In 2017 when btc pulled back to $1,814 it missed the full retrace into the 2013 all time high (ATH) of $1,177 by ~35%. If you consider instead the secondary top in 2017 of $1319, it missed the retrace by ~28%. As of now we have pulled back to a 2021 low of $28,755, coming up short of the full retrace to the 2017 ATH of $19,764 by ~32%. this would leave a similar size gap during both bull markets... Unless we pull back to 20k at some point, I will always be worried that we will see it again (or until enough time has passed) - as I am no longer concerned we will see $1319 ever again. However, since this gap is of similar size to the one we left behind in 2017 I am confident we have seen the local low, for now. (How confident? 75%) So, where to from here? Let's take a closer look at the 2017 bull market as a clue. In 2017 we made a high of $3,000 before we dropped to $1,814, leaving the gap I mentioned above. After making this low, we saw another top at $5,000...a rise of 66% from the previous $3000 high: If we extrapolate a similar rise from 1st top to 2nd top for the current bull market, that will take us to a 2nd high in this cycle of ~$70k (42k*1.66) I expect this rise to 70k to take us about 10-11 weeks - similar in time to the 3k, drop to $1,814, and move to 5k took in 2017. Next, we are due for our 2nd bull market correction in the cycle. 2017 was BEAUTIFUL as btc closed the gap back to 3k nearly to the dollar A pullback like this one is a phenomenal buy the dip opportunity when it occurs and will serve as support in the future, as we'll see later. So in this cycle - what do I expect? Best case scenario after we pull into that 70K target, we get a correction that is supported by our current ATH of 42k: I expect this correction to be swift, 3-4 weeks, and really shake out some of the weaker hands. Once 42K, our current ATH has held as support, we are really ready for blastoff. In 2017 the move from 5k to the 2017 ATH of ~20k took 12 weeks and saw a 300% rise: So where does that leave my prediction for the blow off top in 2021? Well, I do not quite see the same level of rise that we did from 5k-20k. You see Bitcoin likes big corrections in bear cycles, and usually in the 80% range...ultimately, the 2017 bull found a low at that first ATH in 2017 around 3k (remember that ultimate support range from above?): If my theory from above holds true for the 2021 bull cycle, and our current ATH holds as support after we hit 70K, then I also see it being the ultimate bottom once we enter our bear market territory post-this bull cycle. So, if BTC is gonna correct 80% or so from where it makes it's ATH this year, with 42k holding as support, then we can calculate the ATH at this cycle projecting at ~210k (42k / .2) . Here is what that outlook looks like on my charts: I have the ultimate top for this cycle in late July and then a year long bear cycle that ends with the retest of the current 42k ATH. I would not be surprised if this timing does not turn out to be correct. As this amount of time for this cycle does seem rather compressed to me. As any technical analyst will do, I will change my mind which each new candle that we make as the days and weeks end. This could cause my outlook to change. For instance, if we break our current local low of $28,755 then pretty much all of this analysis will be invalidated and will need to be redone. To that end I will update my outlook weekly as we see where this market goes TO THE MOON! TL;DR - local low is in, 70k is next, pullback to 42k then moon to 210k. Don't over-leverage or you will lose it all. [link] [comments] |
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