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The price of bitcoin has continued to exceed expectations during these final months of 2020, and as things grow from where they were just eight months ago in March, many analysts are predicting that 2021 is going to be a year fully devoted to the world’s number one cryptocurrency by market cap. Figures such as Todd Gordon – founder of TradingAnalysis.com – believe that the asset could spike as high as $74,000 by next year.
Gordon: Bitcoin Will Soon Explode Like We’ve Never Seen
To come up with his recent prognosis on the status of bitcoin and where he thinks it will go, Gordon used what’s known as the Elliott wave theory, which he describes in a recent interview. He explains:
It’s hard to give bitcoin an intrinsic fundamental value because there’s pretty much a finite supply… It’s a wonderful way to value crypto because Elliott wave is meant to detect the herding mentality and the emotions driving the price – fear and greed – and it creates very recognizable patterns. The Elliott wave theory is based on the idea that there’s five waves in a primary trend, three [up]trends and two intervening corrections.
He says that the first major bitcoin wave occurred about six years ago in 2014. There was a massive drop the year later, though the cryptocurrency then experienced a massive uptrend until the year 2018. He says that bitcoin could potentially find itself making its way even further up the financial ladder in the coming decade.
The point of all this is a reliable relationship in the Elliott wave theory is the percent distance traveled in that first wave in 2014 is often equal to the percent change in wave five.
He says he’s taking a risk by predicting such a huge number, though considering how long the first wave lasted in 2014 and where bitcoin is now, he assumes that bitcoin will jump past the $70,000 mark in the coming year. He explains:
I can’t believe I’m going to go out on CNBC and say this, but it’s about $74,000. The Elliott wave goes very well with… Fibonacci multiples. If it does want to fall short, it can go to 61 percent of that target, which is only at $34,000.
Others Feel the Same Way
Other traders offer similar sentiment, though they are confident that the currency could potentially jump even higher. One such figure is Mark Tepper, who explained in a recent statement that he’s always felt a need to own bitcoin, which means other people likely experienced the same thoughts. He said:
I’ve always had to own some. It’s like a FOMO concept for me. If I never owned any and bitcoin hits $100,000 per coin, I’d probably cry myself to sleep every night for the rest of my life if I didn’t own some.