Last Push For 2017
The latest spike in Bitcoin’s price is due to the recent announcement that the Segwit2x team will go ahead with the fork on December 28. The team essentially bribed traders to buy Bitcoin in return for B2x coins and some Bitcoin on top. Here is a quote from the article that first reported on the hard fork:
For BTC investors, a key appeal of new Bitcoin ‘versions’ or hard forks is the duplication of their BTC holdings in the new coin at the time of each snapshot, which essentially provides them with a supply of “free money.”
Traders drove the price of Bitcoin up from 13,500 to almost 16,500 on Bitfinex. The reason simply being the fact that they would like to capitalize on a clear cut bribe for buying Bitcoin.
Traders Looking To Cash out After B2x Issuance
As soon as traders get their equivalent B2x and some Bitcoins on top, the traders will be looking to cash out. Why you might ask? Well, its because the whole thing is a scam. There is now 4 versions of Bitcoin including Bitcoin Gold, Bitcoin Cash, and Now B2x. They initially promised us Bitcoin with a “fixed” supply, but we all know that is not true. The four versions of Bitcoin combined now total 84 million with as much as 335 billion in market cap of people’s hard earned U.S dollars. With the creation of a new coin (B2x), we expect that billions more will be ciphered from hardworking people all around the world.
Technical Chart Shows Head And Shoulders Pattern
If you don’t know what a head and shoulders pattern is, then you probably should not be trading. A head and shoulders pattern is a classical technical pattern used to predict buyer exhaustion. The pattern is based on Dow Theory’s peak-and-trough analysis. If you don’t know what Dow Theory is, then you probably should not be trading. The picture featured above shows a descending neckline of the head and shoulders pattern. We predict that the current price of Bitcoin is at (or near) the peak of the right shoulder. If the price drops below 12,000, then it would mean confirmation of the head and shoulders pattern.
Confirmation Of The Head And Shoulders Pattern
Once a head and shoulders pattern is completed, then most traders will engage in a short position at the price where the pattern was completed. This would mean that traders should technically start shorting at $12,000 USD. Once the short is commenced, traders would expect the price to drop by the same amount from the peak of the head to the neckline. This would mean a drop in the price of Bitcoin by $8000 USD. This would put the price of Bitcoin at $4000 USD.
Technical Chart Suggests A Drop Down To $8000 USD/BTC
In the paragraph above, we’ve described that Bitcoin could drop by as much as $8000 USD from the neckline. However, the chart suggests price resistance at (or near) $8000 USD. Back in early November, Bitcoin also displayed a head and shoulders pattern and dropped down to 5300 from a peak of 8000 USD. Based on that previous drop, Bitcoin would see massive resistance if it approaches 8000, and for that reason we predict that Bitcoin will drop down to 8000 USD instead of 4000.
What’s Next For Bitcoin
We believe that the bubble still has ways to go. The current market capital of all cryptocurrencies and tokens is at $616 billion, so the market is still relatively small. In comparison, the tech bubble reached a peak of 1.5 trillion USD, so we should see the cryptocurrency bubble reach a similar size since both bubbles are part of the tech industry. Some will go as far as calling the cryptocurrency bubble the second tech bubble or the second dot com bubble. In any case, we should see a similar market behavior as that seen in the late 1990s.