Crypto traders and investors alike are interested in predicting the direction in which the leading digital asset will go as a consequence of the shifting price of Bitcoin (BTC) in the market over the last several months.
Technical analysts Kevin Wadsworth and Patrick Karim of Northstar & Badcharts spoke with Kitco News on August 16 to discuss their anticipated price objectives for Bitcoin.
Wadsworth provided a perspective on BTC when it reached the goal price of $20,000, stating with percentages that, according to technical analysis, Bitcoin may fall as low as $10,000.
“Looking at the Bitcoin chart we find ourselves in an inverted arc, the opposite of a cup pattern. We have been rising in a bit of a bounce off that $20,000 area and it’s taken us up and formed a bearish rising wedge-hitting resistance.”
He specifically added:
“There are a number of technical analysis techniques and features of this chart that make it more probable it’s going to break to the downside and head down towards that $10,000 – $12,000 target. I would assess the odds at around about 70% to 80% likely that we break down to see these lower lows and about 20% to 30% probability of moving to the upside.”
It’s possible that Bitcoin may climb higher in the future.
It’s also important to note that Wadsworth says, “We can’t rule out that move to the upside,” but investors are better prepared if they are aware of where the support and resistance levels are for BTC.
The arc patterns provide further information about the prospective price goal. In his opinion, Wadsworth pointed out that Bitcoin is going in the direction of either the 200-day or 30-week moving averages, which are both extremely comparable on this:
“That’s somewhere just above $30,000 – $33 000 that kind of area by the time we move up to meet it, I guess we could be somewhere around $29,000 or $30,000. So that is the upside target and that’s the highest I would expect it to get. We may well start to run out of momentum before then.”
According to the market expert, several cryptocurrencies have already started to lose momentum and look to have reached their highs for what he refers to as “a bear market rally.” Wadsworth said, “We’re either at or very near to those uh, peaks at the moment.”
BTC headlines hopium
With the ‘hopium’ headlines in the market and people like Anthony Scaramucci and Mike Novogratz stating that Bitcoin would ultimately hit $500,000 and $300,000, respectively, it looks that many major institutional investors are still positive in the long term.
According to their analysis of the charts and the long-term forecasts the aforementioned investors had made, the technical analysts do not have a medium-term price goal of over $30,000 in mind.
Given the strong correlation between the Nasdaq chart and Bitcoin, Karim said “it’s extremely difficult to imagine greater objectives for BTC.”
The two experts concur that BTC and other cryptocurrencies are a bet on tech equities. Because cryptocurrencies haven’t been around for very long, this is due in part to that.
As a consequence, it is difficult to predict their behavior, as well as whether and when the stock market would experience a much deeper and longer decline.
