Parabolic Gains Ahead for Cryptocurrency
Updated
There are several factors supporting this hypothesis, including wave theory, technical analysis, fundamental analysis, and macroeconomic factors.
Wave Theory: Based on the Two Day chart above, it looks like we're in a diametric and should be nearing the end of wave-(D) because it is time similar to the other waves, and the internals of that wave seem to have formed into an irregular failure flat. If so this would be an ideal end for wave-c because it is 80% of wave-a in price, and half of the time of a+b. An irregular failure flat implies that wave-(E) should be stronger than wave-(C). In the longer term, we have likely completed wave-[F] and are at the beginning of a bull run that could continue until next year.
Technical: There are several normal and hidden bullish divergences forming on multiple timeframes. We have also had several significant long-term moving averages turning bullish on many major cryptocurrencies which haven't happened since early 2017. There are also bullish divergent bars beginning to form on several timeframes. There are also very bullish breakouts on several cryptocurrencies, including Bitcoin which broke right through the 6-7k resistance zone, and now that resistance has turned into support, indicating that we will continue to see higher prices from here.
Fundamental: The on-ramps for cryptocurrency, and in particular for institutional clients, have been ramped up in the last few months, allowing a lot of new money to flow into the market. In 2017, most major exchanges shutting their doors to new customers was a major factor in the bull run running out of steam because new money couldn't come into the market. Now they will be able to handle a much larger customer base. The new SEC commissioner is very pro-crypto and has stated she thinks the SEC is being too strict by not allowing a cryptocurrency ETF, so most likely under her guidance we will see an ETF being approved soon. With Facebook launching a new cryptocurrency it will allow a lot of retail investors to get into the market through Facebook which has billions of users and a familiar interface. There have also been several major marketing pushes by several companies and cryptocurrency foundations which will bring new money into the market. Many major companies and banks are also starting to integrate cryptocurrency and blockchain technology into their daily operations.
Macroeconomic: Several macroeconomic factors play into this potential parabolic bull-run. In 2017 when we went parabolic we had strong gold, strong EURUSD, high USD inflation, low yields, and increasing trade war fears. Throughout 2018 and some of 2019 we have had the opposite situation. However, now we are seeing strong gold again, the ECB remaining neutral and the FED softening which will likely lead to higher EURUSD prices, high USD inflation, crashing yields, and China and US starting to escalate the trade war again.
Based on all of these factors I think the stage is set for people to begin rushing into cryptocurrency, and as price goes higher people will begin to rush in faster because there are few more attractive alternatives, and the media will be picking up on the price increase heavily, especially after we break 10k, causing prices to go parabolic in a very similar fashion as they did in 2017. Which also means that many top cryptocurrencies will outperform bitcoin again because of BTC's lack of scaling.
Wave Theory: Based on the Two Day chart above, it looks like we're in a diametric and should be nearing the end of wave-(D) because it is time similar to the other waves, and the internals of that wave seem to have formed into an irregular failure flat. If so this would be an ideal end for wave-c because it is 80% of wave-a in price, and half of the time of a+b. An irregular failure flat implies that wave-(E) should be stronger than wave-(C). In the longer term, we have likely completed wave-[F] and are at the beginning of a bull run that could continue until next year.
Technical: There are several normal and hidden bullish divergences forming on multiple timeframes. We have also had several significant long-term moving averages turning bullish on many major cryptocurrencies which haven't happened since early 2017. There are also bullish divergent bars beginning to form on several timeframes. There are also very bullish breakouts on several cryptocurrencies, including Bitcoin which broke right through the 6-7k resistance zone, and now that resistance has turned into support, indicating that we will continue to see higher prices from here.
Fundamental: The on-ramps for cryptocurrency, and in particular for institutional clients, have been ramped up in the last few months, allowing a lot of new money to flow into the market. In 2017, most major exchanges shutting their doors to new customers was a major factor in the bull run running out of steam because new money couldn't come into the market. Now they will be able to handle a much larger customer base. The new SEC commissioner is very pro-crypto and has stated she thinks the SEC is being too strict by not allowing a cryptocurrency ETF, so most likely under her guidance we will see an ETF being approved soon. With Facebook launching a new cryptocurrency it will allow a lot of retail investors to get into the market through Facebook which has billions of users and a familiar interface. There have also been several major marketing pushes by several companies and cryptocurrency foundations which will bring new money into the market. Many major companies and banks are also starting to integrate cryptocurrency and blockchain technology into their daily operations.
Macroeconomic: Several macroeconomic factors play into this potential parabolic bull-run. In 2017 when we went parabolic we had strong gold, strong EURUSD, high USD inflation, low yields, and increasing trade war fears. Throughout 2018 and some of 2019 we have had the opposite situation. However, now we are seeing strong gold again, the ECB remaining neutral and the FED softening which will likely lead to higher EURUSD prices, high USD inflation, crashing yields, and China and US starting to escalate the trade war again.
Based on all of these factors I think the stage is set for people to begin rushing into cryptocurrency, and as price goes higher people will begin to rush in faster because there are few more attractive alternatives, and the media will be picking up on the price increase heavily, especially after we break 10k, causing prices to go parabolic in a very similar fashion as they did in 2017. Which also means that many top cryptocurrencies will outperform bitcoin again because of BTC's lack of scaling.
Note
Seems like Wave-E has ended and we're in Wave-F now. Should stay in this range for a couple weeks or so before heading towards ATH.
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