While many representatives of the world’s financial system have been consistently deprecating Bitcoin and cryptocurrencies, Jean-Claude Trichet, the former European Central Bank (ECB) president, dismissed the idea of cryptocurrencies as pure speculation.
While Trichet is the latest in a crowd of regulators and lawmakers to have expressed his opposition to cryptocurrencies, the anti-crypto sentiment has grown louder since Facebook revealed its plans for their own currency.
As for its price, Bitcoin seems to be in the beginning of a new long-term upward cycle — with the potential of reaching a new all-time high within the next two years.
Extremely Bearish
Even in the world of cryptocurrency, there are several prominent bears. Cryptocurrency trader Crypto Dude recently tweeted an extremely bearish Bitcoin price prediction — going against the current bullish enthusiasm on ‘Crypto Twitter.’
$BTC Price prediction by 2021-2023.
Somewhere between 900$ and 1400$. Once bulls lose support on the box it's going to be over.
Bring the hate, call me crazy – I don't give a shit. pic.twitter.com/ogarWO0KY5
— CryptoDude (@cryptodude999) November 10, 2019
This is a long-term prediction — suggesting that the Bitcoin price will fall between $900-$1400, the heights of the 2013 upward move. Let’s take a closer look and see how likely this is.
Broken Support
The ascending support line in the tweet is drawn beginning on July 2016. The line was validated three times throughout 2017 before the price broke down the next year. The current upward move — ending on $13,864 — validated this line as resistance and the price has been decreasing since.
There are several drawbacks to relying on this trend-line.
- First, since we are using a logarithmic chart, using a straight trend-line might not be the best predictor.
- Additionally, we have precedent for a similar break of support. A trend line beginning in 2012 in place for roughly two years was broken on January 2015. However, after the price validated this line on November 2015, the price continued its upward movement and eventually reached the $20,000 high on December 2017.
Bitcoin’s Log Chart
If we instead use a curved support line, we can outline the support line the BTC price has been following since 2011. If the price indeed drops to $1000, it would break this trend-line.
While this does not mean the price will not break down, very strong support would have to be broken for it to occur.
Also, the technical indicators suggest that we are in the beginning of a new upward trend, rather than at the beginning of a correction.
The weekly RSI has been oversold only twice in BTC’s price history:
- January 2015
- December 2018.
At both these times, the price has just reached the 200-week moving average, adding further credence to the possibility that the price will act in a similar manner.
Also, the price has never traded below the 200-week MA. For the price to reach $900-$1400 as indicated in the tweet, it would have to do so.
Bitcoin Block Reward Halving
Another indication about the future prospects of Bitcoin’s price comes from halving.
Prior to the first and second halvings, the Bitcoin price consolidated in the months — leading to the event before the rate of increase accelerated.
If the Bitcoin price does the same this time, it will trade around $8000 until May — before initiating a rapid move.
We would expect a price of around $100,000 between 2021-2023.
Disclaimer: This article is not trading advice and should not be construed as such. Always consult a trained financial professional before investing in cryptocurrencies, as the market is particularly volatile.
Images courtesy of TradingView.
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