The analyst who correctly predicted Bitcoins [BTC] The recent decline to $38,000 now sees levels above $43,000 poised for fresh bullish bets on the cryptocurrency.
“As reversal indicators suggest a tradeable low has been reached, we should focus on long positions. From a risk management perspective, we should go long again once Bitcoin breaks $43,000,” Markus Thielen, founder of 10x Research, said in a note to clients on Monday.
Thielen's optimistic view is based on the Elliot Wave Theory, which posits that prices move in waves rather than simple patterns, and future movements can be predicted by observing the repeating wave pattern.
According to the theory, trends occur in five waves, of which 1, 3 and 5 are “impulse waves” that represent the primary trend. The rest are “retrace waves,” meaning a temporary stop to the primary trend.
According to Thielen, Bitcoin has been in a five-wave uptrend since the beginning of last year, with the recent drop from around $49,000 to $38,500 representing wave 4, or the temporary pullback. Now wave 5 has begun and could take the price above $50,000.
“Elliot Wave analysis also characterized this decline to 38,522 as a wave (4) with a wave (5) forecast of 52,671 – possibly by the end of the first quarter of 2024,” Thielen noted.
The optimistic outlook is in line with easing selling pressure from investors taking profits on crypto investment vehicle Grayscale Bitcoin Trust (GBTC). Profit-taking was partly responsible for Bitcoin falling into correction wave 4 following the launch of US-based spot ETFs on January 11.
“Potential triggers for a rise could include the waning impact of the Grayscale GBTC sale on Bitcoin price, the fact that shares are hitting new all-time highs, and the fact that Google is starting Bitcoin and crypto ETF promotions starting today allows, concentrate.” “said Thielen.
According to CoinDesk data, Bitcoin was changing hands at $42,160 at press time, up 0.3% on the day.
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