Bitcoin is recovering from what was its largest dip this year. Should investors expect the rally to be stronger in the coming days or price will dig deeper? The 26 December Bitcoin price prediction from Elliott wave perspective below gives some insights.
26 December, AtoZForex - The second half of this month was a testing period for Bitcoin investors. Warnings against the Crypto coin continues to fly from regulatory and institutional bodies. Bitcoin made its largest drop so far this year dropping 43 % (-$8500) from close to $20000 to $11200. Some analysts including myself still believe that price is in a corrective stage. In one of my earliest views, I had warned of a big dip coming after price got to $19000. According to my Elliott wave forecast, the strong rally in most part of this year was the 3rd minor wave.
Looking back into the year (2017), despite the strong price boom, there were four notable periods of 'dips'. Between the 1st and 2nd week in January (a period of 7 days), price dropped 34%. From 1st week of March, price dropped 34% in 20 days. From 11th June to 16th July (25 days), price dropped 38%. Finally in the 1st two weeks of September - 15 days- price dropped 40%. This means that the drop range this year was between 34% and 40%. In each case of course, price recovered and continued upside even stronger. 43% (current drop) seems to also be reasonably within 2017 Bitcoin corrective behavior. But, is there a chance that this drop will be bigger that this?
Back to Elliott wave theory. In the last update, I used the chart below to explain the possibility of more dips before the rally resumes.
Bitcoin Elliott wave analysis, H4 (click to zoom)
Price is already about hitting the first bearish target at $12000. It could go deeper to $10000 or $8000 before the rally resumes. Anything less than $8000 would mean a big crash is coming. The rally could continue at the end of the correction.
When the fast drop happened, I expected price to make a recovery upside before dropping further to around $8000 to complete the minor wave 4. Could it be that is what's happening now? The chart below shows a well labelled Bitcoin Elliott wave forecast.
26 December Bitcoin price prediction: BTCUSD Elliott wave forecast
Bitcoin Elliott wave analysis, H1 (click to zoom)
What I expect next
Price is making a short term recovery to $16000 as expected but the correction does not appear to be over yet. A new 5-wave drive could be seen downside to extend the drop from 43% to probably 55% as the minor wave 4 ends around $8000-$9000. After this, the bullish move could be on its way to $50000 in 2018. Stay tuned for the next update.
Do you have other views in contrast to the ones listed or you want to compliment them further? let’s know by your comment below.
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