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Rekt Capital: Bitcoin’s four-year cycle indicates growth to $ 170,000

By the end of 2020, Bitcoin hit $ 29,500, significantly surpassing the previous resistance and 2019 high of around $ 13,900. Rekt Capital analyst says that a new four-year cycle is now beginning, the lows and highs of which he tried to determine by projecting the market behavior in previous similar periods.

 

“Without a doubt, Bitcoin halvings are a major catalyst for bull markets. The same thing happened the last time. Halving plays an important role in shaping the four-year cycles. They occur on the fourth candle of the previous four-year cycle or several months before the exponential first candle of a new four-year cycle, he explains his approach. “This suggests that Bitcoin will experience another exponential first candle in 2021.”

 

Historically, in the model under consideration, the first candlestick tended to open lower. It dropped to the same level where Bitcoin met the main resistance in the previous cycle. This level is marked with a green line on the chart.

During the first cycle, the mentioned level passed through the $ 733 mark, where bitcoin rested against resistance on the first, second and third candles, until it surpassed it on the fourth, and on the next first candle it became support. It was the same during the 2017-2020 cycle and even before the full four-year cycle emerged, when Bitcoin met resistance around $ 13.14 during 2011-2012, before it became a support for the first candle in 2013.

Thus, if the scenario of the previous two cycles repeats, Bitcoin should drop to $ 13,900 this year before heading higher. This implies a 60% drop from $ 35,000, which seems unlikely at the moment, according to Rekt Capital. Bitcoin broke the previous trend, exceeding not only the nearest resistance, but also its own historical maximum at the fourth candlestick of 2020, so the analyst also suggests focusing on $ 20,000, the correction to which will be 42%. In previous bull cycles, Bitcoin tended to retrace 21-43%.

Taking $ 20,000 as the basis for the next first candle and extrapolating the previous four-year cycle to the new one, Rekt Capital gets the following picture:

According to his forecast, after the initial decline on the first candlestick, Bitcoin can rise to the level of $ 150,000 – 170,000. It is followed by the second candlestick – bearish, the correction on which is usually 84.5%. The third candlestick confirms the low, and the fourth rallies above its high in an attempt to overcome the long-term horizontal resistance marked by the green line.

Previously, JPMorgan analysts named the long-term target for Bitcoin at $ 146,000, but, unlike Rekt Capital, they doubt the possibility of achieving it this year.

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