Bitcoin Ready for $30,000. What?
To say that the Bitcoin price action on Wednesday has been crazy would be somewhat of an understatement. For those who missed the memo, BTC found itself up 20% at some point yesterday, carving out a foothold for itself in and around the $13,800 price point, a key long-term resistance.
Then, within the span of some fifteen minutes, Bitcoin collapsed by 14%, depending on what exchange you refer to, then rallied by 7% within another 15-minute time span. As CNBC’s “Fast Money” recently quipped, “this is what volatility trades like.”
Despite the uncertainty on behalf of bears, one trader recently brought up an interesting fractal, which reveals that the current rally is just getting started. Optimistic, I know, but let’s take a look.
Ayan Dasgupta shows that over the past few months, Bitcoin has been experiencing patterns in its price movement, marked by larger gains (1.62x) and longer epochs (1.2x). If you look at the chart below, this surely is the case. Each rally has been larger than the last, but the gaps between each large surge have gotten longer.
Anyhow, Dasgupta’s fractal suggests that Bitcoin could hit $29,890 by August 21st — a mere 50 odd days away. He does note, however, that if this move came to fruition, traditional indicators, namely the Mayer Multiple (price over 200-day moving average), would enter unprecedented regions.
Indeed, Trace Mayer, the creator of the aforementioned Multiple, has claimed that the ongoing rally may be somewhat unsustainable if we consider historical precedent. In a recent tweet, which was made when BTC was at $10,600, the long-time cryptocurrency investor (angel investor: Kraken, Armory, others) noted that his sustainable targets for BTC would be $15,000 by September, $21,000 by December, and potentially $30,500 by the time the halving rolls about next May/June.
With Bitcoin historically being higher than its 200-day moving average by only 14.79%, the current overextension is obviously a sign that bulls may soon lose steam, resulting in a short-term yet large retracement.