Reprint of post from Iain Sherriff May 6th
Bitcoin price could experience a 47 percent price correction at $2,800 one bitcoin analyst predicted after witnessing a record $2,791.70 high Thursday, according to an analyst. The correction will only be temporary, said analyst Nicola Duke of Forex Analytix speaking to CNBC, who predicted the price will continue its upward movement through 2018. Bitcoin’s price is at $2,473 at press time, giving it a market cap of $40.4 billion, according to data from CoinMarketCap.
Possible price corrections notwithstanding, the number of investors betting on bitcoin to climb higher has jumped 18.2%. Those taking short positions have fallen 10% since early this week. Investors are getting more bullish, according to the Bitfinex exchange.
The Resistance Point
Duke said the $2,800 point will mark a resistance point, after which the price will drop.
An analysis called the Fibonacci retracement examines the peaks through different periods of up and down movements to determine future asset prices.
In “wave two,” in the fall of 2013, bitcoin bottomed out in January 2015 before rebounding for several months and then declining again. It rebounded again in January of 2015.
Duke said bitcoin is now in a third wave. After reaching $2,800, Duke predicted it will fall and reach as low as $1,470, marking a 46.5% drop from the current price.
Bull markets, according to Fibonacci analysis, experience a pullback that ends when it retraces a key portion of a prior move higher. Such percentages are based on “Fibonacci ratios.” One such ratio is 61.8%.
A Rally Will Follow
Duke expects the fourth wave will see bitcoin stay at 61.8% of the time the second wave lasted. This means the rally following the correction will begin in January.
The stock markets also typically experience a correction in January, Duke said.
Following the correction, another rally will take bitcoin to $3,350, and then to $4,480 in 2018, according to Duke.
Bullish Forecasts Galore
Duke’s forecasts for bitcoin are less bullish than some other veteran observers’.
Aurelien Menant, CEO of Gatecoin, said bitcoin could hit $6,000 by year’s end, amending his earlier $3,000 forecast this year.
Rising interest from investors in Asia and a resolution of the scaling debate have driven interest in bitcoin, Menant said.
Wences Casares, CEO of bitcoin wallet Xapo and member of PayPal’s board of directors, said bitcoin would hit $1 million before the next ten years while speaking at the Consensus 2017 conference in New York.
Casares’ was the most bullish prediction for bitcoin prices yet. Certainly more than early Snapchat investor Jeremy Liew and Blockchain CEO Peter Smith who predicted bitcoin prices to hit $500,000 by 2030.
One prediction made last year that has already proved right saw Danish investment bank Saxo predict bitcoin prices to rise by 165% (bitcoin was trading around $750 at the time), to leap beyond $2,000 in 2017.
Source: Bitcoin Price Could See 47% Correction at $2,800, Claims Analyst