Posts Tagged ‘speculation’

Bitcoin: Caution Ahead

August 31, 2017 4 comments


With the crypto world buzzing about Bitcoin approaching the 5000 level, its progress has seemed unstoppable. However, there are some signs of frothiness. In my own local community the owner of a computer networking and repair business has started giving classes on investing in Bitcoin, Ethereum and Litecoin. The locals are discussing investing in crypto currencies, wondering which ones are the best to profit from.

But, more importantly than anecdotal evidence that there may be some temporary frothiness in the market are cyclical concerns. In fact, as Bitcoin nears the 5000 to 5500 level, the risk increases that the price will dip to around the 2500 to 2700 level.

Not that you should necessarily get your crypto currency advice from Goldman Sachs but there is this:

Bitcoin is now within reach of the $4,827 near-term price target that Goldman Sachs analyst Sheba Jafari quoted to clients in a research note earlier this month. Once it hits that level, the cryptocurrency could be due for a corrective selloff, perhaps as low as $2,221, Jafari estimated.

Which conforms pretty nicely with my non-bankster analysis from the Bitcoin Price Road-map:

Given the current price trajectory of Bitcoin (and some underlying knowledge of how Murrey Math Cycles work) a target price of $5,000.00 would be well within reason.

After this, especially if you are speculating use caution as the Bitcoin Price Road-map suggests the possibility of a 50% decrease in price from $5,000 to $2,500.00.

There are two big picture variations of price levels below. The first is based on Murrey Math and its rules for constructing a price grid.

8/8 – 10000

7-8 – 8750

6/8 – 7500

5/8 – 6250

4/8 – 5000

3/8 – 3750

2/8 – 2500

1/8 – 1250

0/8 – 0

The second big picture variation is a modified Murrey Math price grid based on natural growth patterns and the base 60 rather than decimal or base 10 system.

8/8 – 10861.16

7/8 – 9503.51

6/8 – 8145.87

5/8 – 6788.22

4/8 – 5430.58

3/8 – 4072.93

2/8 – 2715.29

1/8 – 1357.64

0/8 – 0

Additional resistance can be discovered by constructing a pure base 60 grid based on the current price level of Bitcoin.

5/5 – 6703.37

4/5 – 6310.69

3/5 – 5918.02

2/5 – 5525.34

1/5 – 5132.67

0/5 – 4740

OK, that’s a lot of numbers! So, where does that get us to?

First, the long-term implication is that Bitcoin has further to go up. However, before it can move to anywhere near 10000, it is more than likely due for a sharp drop lower. If you have been “holding” Bitcoin for a long period of time, you may not be concerned. However, if you are new to Bitcoin or a speculator who has either purchased near the highs, or is considering doing so, you should proceed with caution.

The two big picture grids, combined with some knowledge of cycles and Murrey Math, can be interpreted to indicate that the 5000 to 5400 levels could bring a reversal lower. In addition, the base 60 grid points to dual-resistance forming at 5132.67 and 5525.34. So, basically, anywhere from 5000 to 5525 or so could see a reversal. Of course, the reversals could occur elsewhere or not at all. Anything is possible, but not everything is likely or probable. Somewhere near 5000 would be where the cycle would normally reverse the price trajectory downward.


With Bitcoin taking center stage and locals taking to Facebook to ask which crypto currency is the best to turn a profit on, there is anecdotal evidence that the market has some froth. Cycle theory combined with Murrey Math is pointing to the same conclusion – as Bitcoin nears 5000 it may be wise to exercise caution and not take any undue risk or speculate with any money that you can’t afford to lose.

Update: Since writing this post Bitcoin traded above 5000, and then promptly started to see its price erode. As this update is being written (9-4-17) the Bitcoin price is below 4300. Cycle analysis would point to the price to move to near or below 2500 before it rebounds and begins a move that is expected to take Bitcoin to somewhere around 10000. Stay tuned.

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