Bitcoin rallied a bit on Friday, initially falling before rising late in the day to form a bit of a hammer and closing the daily candle around $49K as we head into the thinly traded weekend markets. This is a somewhat bullish turnaround as Bitcoin exhibited a bit of strength going into the weekend, showing resiliency as weekends can be volatile or even opportunities for people to accumulate quietly before markets explode higher Monday morning in Asia.
(March 5, 2021 7:30PM EST)
Short-Term:
Bitcoin continues to struggle a bit around the $50K level in the short-term, not yet giving us a clear direction Bitcoin is yet to take: straight up or back down to a double-bottom/new bottom before resuming up again. We'll have to wait and see but I'm inclined to give the more bullish view my primary view, but will be waiting to buy the dip should Bitcoin revert back down to form a double-bottom or form a new bottom around $44K or $40K, respectively.
It's interesting to note that, when comparing the previous 2017 Bitcoin cycle to this one, this current pullback suspiciously mirrors the deep pullback from March 2017 as shown below, which also followed another bull market correction just a couple of months earlier, as we experienced this January. If this is any indication as to what we may be able to expect, then this significant dip may be perhaps the last medium-term accumulation opportunity to enter long positions before Bitcoin takes off to a new higher range and the parabola accelerates vertically. Anyone who was around (or cares to look) remembers that Bitcoin started off around $1,000 early in 2017, and after a few significant corrections throughout the year, in which it formed higher highs and higher lows, eventually worked up towards a blowoff top later in the year. Seasonality is lining up this time again and may be pointing to another late-year blowoff top in which BTC exceeds that of $100K or possibly even $200K.
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Long(er)-Term:
After Bitcoin decisively puts in this W2 bottom (or perhaps ABC corrective pattern down), Bitcoin should grind back higher as it begins a larger W3 higher (potential W3 of W3). A conservative measured move of 1.612% of the micro W1 that just terminated around $58K measures up to the 2.272% Fibonacci extension level around $99K. A more aggressive move measuring 2.612% of the recent W1 would send Bitcoin up closer to $125K (literally off my chart above). Bitcoin will likely not only hit our projected price targets but exceed them due to higher than anticipated inflation and government Quantitative Easing on a huge scale, especially starting H2 2021. I think $100K is not only on the table but a high likelihood in late 2021. Even the Stock to Flow Model for Bitcoin is well on track, pointing to a $100K - $200K Bitcoin, and the S2FX model points to a nearly $300K BTC end of this cycle.
Support:
1st support: $45K.
2nd support: 50% fib around $43,800.
Floor: $40K.
Resistance:
Immediate-term = roughly $60K.
