Bitcoin’s Next Stop: $14,000 Or $37,200

After the incredible rally in Cryptos recently and my team’s recent research articles about how to spot a “Blow-Off Peak”, the recent downturn in Bitcoin prices has raised a valid question – is this the start of a new “Blow-Off Top” for Bitcoin? In our recent 2-part research article on Blow-Off Tops, we suggested there are five phases to a Blow-Off top setup. The first is an incredible rally attempt – usually somewhat similar to a parabolic price advance. We can certainly say that Bitcoin has seen a huge price advance from near $4000 in early March to over $19,000 recently (+$15,000). Is this it? Is this a major price peak or will it continue higher?

When taken in the context of what has transpired over the past 12+ months with COVID-19 and various global lock-downs, it does make sense that many more displaced workers across the globe may have become actively involved in Cryptos and alternate assets.It also makes sense that a rush into the recent upside trending in Bitcoin, starting near early October 2020, may have prompted a rush for Crypto traders/investors. Everyone loves it when their investments rally 80% or more in less than 60 days.

Yet the question remains – will Bitcoin go higher or is this the intermediate-term peak in price? Historically, the recent highs are similar to the highs set in December 2017:$19,666 in December 2017 vs. $19,490 in November 2020. Technically, this is a Double-Top setup.

DAILY BITCOIN ANALYSIS

If our five phases of a Blow-Off Top starts to set up and execute in Bitcoin, the next phase will be an immediate downside price correction that sets up the sideways “FLAG” formation in the pattern.This is the initial attempt to support the current rally mode in the markets after reaching a price peak. Usually, the FLAG formation fails with a breakdown in price that sets up the “FINAL SUPPORT DEFENSE LEVEL”.We also see a clear Divergence between price highs and technical indicators recently. This is a moderately clear indicator that price levels have reached over-extended levels recently. We’ve drawn what we believe may happen on this Daily Bitcoin chart (below).

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