The BTC price briefly crossed $5,000 record point, effectuated many top analysts prediction. But it fell almost immediately and tumbled almost -10% to $4500 in a few hours later.
UPDATES 05 September: Remember guys, the assumptions are still viable till 31 December. The Bitcoin and cryptocurrency under chaos dumping at the moment. Just hodl.
BTC/USD price year-long chart. data source: coinbase. RIGHT CLICK to view large image
What had been fuelling the latest record surge of BTC?
The August Segwit and possible split drama had done little damage to the network. The smooth Segwit activation had killed off the fractious debate over Bitcoin scalability. The hard fork which resulted in the birth of Bitcoin Cash (BCC) has confined impact over Bitcoin.
Moreover, Commodity Futures Trading Commission (CFTC) and SEC are taking steps closer to the formation of regulation on Bitcoin futures investment options.
Main stream media and investment community continued buzzing around Bitcoin especially during the uncertain geopolitical that is developing in the Far East. With the traditional investment assets still in fumble condition, Bitcoin, and cryptocurrency are increasingly tapped as the better investment option.
There are also rumors that few big Chinese investors converted their holdings from ICO back into Bitcoin and altcoins amid the Chinese authority tough stance on curbing ICO activities in the mainland. Altcoins also enjoyed an intense spike for the past two days led by Litecoin, Ethereum Classic, Ethereum etc.
The weekend had been habitually the less favorable for trading Bitcoin. As Bitcoin price normally performed poorly during the weekend.
The reason for the dip right after,
It could technical retrace. Bitcoin is entering short term over exuberance level. There are not really that shocking as some traders are taking profit at this level.
The psychological ‘spill-over’ effect of this crucial $5,000 mark. The talk of 5k point has been the talk since the middle of this year. So many investors view this as a core level that the price could reverse the trend. Thus, collectively that entice large the limit sell orders in this level. But the impact on BTC price is temporary.
Another major development for the past few days in the crypto space was Chinese government taking harsh move against Initial Coin Offering (ICO). These spooks the Bitcoin community in China. Many ICO-related service providers had voluntarily suspended any ICO activities temporarily. Some ICO launchings and meets had been canceled for the past few days alone. Neo and Binance are some of those that had been publicly announced action on the impending China regulation on ICO.
But in the long run, any regulation framework will benefit Bitcoins overall. These can reduce the scammy schemes on crypto. The regulation would open up doors for established investors to invest into crypto.
Where is Bitcoin price heading now?
Is Bitcoin bubble ready to burst? I tried to pen out three most plausible Bitcoin price next direction for the short term until before the year 2018.
1) BTC price rebounded from the current level and on course to test the next resistance level en route to another record high near $7,000.
Bitcoin price hitting $7,000. RIGHT CLICK to view large image
That would be mind blowing to see this price in 2017. If this materializes, this would represent a 10X increase of BTC price from June 2016. But nothing is impossible in crypto now. Chances of this: 40%.
2) BTC price crashed 30% – 40%, the price then booby trap in between $2,900-$4,500 for the rest of the year or emergence of a long term downward trending in a bearish reversal pattern.
Bitcoin price struggle at $2900 – $4500. RIGHT CLICK to view large image
Is that possible of this? I highly suspect on it. The current hype, especially in the media and investment circle, might not support this notion for too long. Too many people are eager to enter and want the success of Bitcoin now. Many previously naysayers have been starting to understand and appreciate the value of Bitcoin and the blockchain technology that behind it.
But these see-saw BTC price might not be as disastrous but it could slow down the interest on crypto quite a bit. Just maybe. Chances of this: 45%
3) BTC in standard impulsive ABCD Elliot Wave bullish trend. The price corrected to $4,400 or marginally lower and then gradually rise back to $4800 in a tight range trading. And the price shot up sharply to reach $5,000 – $5,500 in almost one go,
Bitcoin price ping-pong in between $4400 – $4800. RIGHT CLICK to view large image. *note I am using a shorter 30-minute chart to illustrate the short term ranging market.
The price could move in the similar pattern from the previous two short lived bearish trend. This proposition probably is the most popular among us. We could see the current strong support at $4500 level, The descending triangle forming also gives a strong hint of possible sharper price hike soon. Let’ us see how the price would be play out this time. Chances of this: 60%
Just my naive assumption, anything is not too shocking at the Bitcoin sphere at the moment. Good advice is to buy at the dip and hodl BTC. Any downturn is not affecting much if you look at the bigger picture. Bitcoin value will be constantly increasing. Any temporary downturn is expected. Now, the main question is how long it takes for the Bitcoin to mass public adoption?