Where is Bitcoin likely going and where will it retrace to?
Yes, the chart is inverse. Meaning it is upside down. But that is for good reason. Look at the chart and think of it as a waterfall where water falls down the cliff and bounces off of the rocks below (levels). How far will the water (the price of Bitcoin) bounce back up? Meaning retrace back down until it ‘’falls’’ further down. This question I am going to try and answer based on historical data.
In Bitcoin’s history there has been two major bear markets. The end of those bear markets has been solidified by a parabolic move out of the downtrend. What followed was a retracement and a continuation of the bull trend.
I figured out the possible retracement as well as the upcoming high (May 15 2019) by looking at which point the parabolic move broke the 60 EMA (please see picture above the article for reference). These points are shown around, but not exactly on, the white horizontal lines. The upper two red lines show the tops of the past two parabolic break outs out of the bear market. The third (bottom) red line is my approximation of the top of this parabolic move.
When you calculate the percentage of the drop of the first two bear markets you get a feel of how much this retracement will be. The first bear market retraced roughly 54%. The second one around 60%. This gives us an average of 57%.
What I noticed is that the past two parabolic break outs each retraced to around the second green circle (crossed with the white horizontal line) when the price dropped parabolic below the 60 EMA (see pictures below). This price for the current situation is around 5531 dollars. You can see the second green dot already (first picture).
In order for this retrace approximation to be ‘’correct’’ we would need to add 57% and relate to a logical price level. So what we do is multiply 5531 dollars by 1.57. That equals 8683 dollars. And guess what? That is just above the first monthly high!
So my educated guess is that we will top out above the monthly high of around 8500 dollars and retrace back down to 5500 dollars. Accumulation will follow and we will gain traction to yet again continue to make higher highs.
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