The global macro director at financial giant Fidelity, Jurrien Timmer, says he’s noticing a pattern that suggests Bitcoin’s price has not yet hit a bottom.
Citing the Elliot Wave Theory, a technical analysis method which forecasts price fluctuations by mapping out repeating patterns of waves, the Fidelity executive predicts Bitcoin could hit a low of $23,000, in the worst-case scenario, or slightly below $30,000.
“Looking at the chart pattern since the recent high of $64,870, I can’t help but notice that a textbook 5-wave decline may be unfolding…
Let’s apply this to the Bitcoin chart. So far it looks like wave 1 down was from $64,870 to $47,079 for 11,791 points. Wave 2 went up to $59,588, which is a 70% retracement of wave 1. Wave 3 was an impulsive 29,571 points down to $30,017, which equates to 1.66x wave 1.
So far the recovery from the wave 3 low looks like a 4th wave zigzag retracing 37% of wave 3. In other words, everything about this wave pattern so far appears to be textbook, which suggests that a wave 5 decline could still lie ahead.
If wave 5 = wave 1, it projects down to $23,076 as a final low. If it’s only 0.618x wave 1, we may only slightly undercut the current low and bottom at $29,872. So to me that’s the range of outcomes for a potential 5th wave sequence.”
The senior Fidelity executive says he thinks BTC’s ultimate bottom will be above the $23,000
“…my hunch is that the low will be closer to $30,000 than $23,000, per the head and shoulders price target below. The distance from the head to the neckline was $17,000, which measured from the neckline is $30,000.”
Timmer also adds that his theory could be invalidated if Bitcoin appreciates by about 10% from the current levels. At the time of writing, Bitcoin was trading at $37,300.
“What would negate the 5-wave sequence? A sustained rally above $41,000 should do it, in which case we could think of the current retest as a ‘failed 5th.’”Don't Miss a Beat – Subscribe to get crypto email alerts delivered directly to your inbox
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