Why Goldman Sachs Predicted Bitcoin Bottom for ~$2300
Updated
If you saw my last Bitcoin idea (see link to related idea below) you would know that this big downward move we are experiencing right now was to be expected. I have received private messages of people asking me "How can I know where the bottom is?" and the answer is that you can't know for sure. But you can try to predict the bottom of this downtrend - and this is what Goldman Sachs probably did too. When the GS analysts made their prediction of BTC going to $2200 - $2300 they were estimating the top to be reached at ~$4830. The real top was a little higher, so we'll have to factor that in. If you look at my chart though I have set the top of the fibonacci retracement tool at the level GS was working with to better understand how they made that prediction.
Besides fibonacci levels the next important part is Elliott Wave analysis. In my last idea I said that I am not sure whether we are past wave 5 or not. At this level I can confidently say that we are most definitely past wave 5 - and that puts us in wave A. Wave A is one of the corrective waves of the big ABC correction pattern (see Wikipedia article on Elliott Waves if you are not familiar with how the principle works). After this wave A is completed we should see wave B, a wave that goes against the trend (meaning: up). It is typical for people during wave B to think that the bear market is over, so be careful once we are there and think twice before buying. Because after wave B comes wave C, another big corrective wave that can (and probably will) extend further than wave A.
On this chart I give you an example of how our ABC wave can look like. However, it is not possible for me to say how long wave A will be for sure. The same thing applies for the other two waves that will come. What we know though is that GS has predicted a bottom to be at ~$2200 - $2300. And as you can see on the chart that price range coincides with an important fibonacci level. It is typical for a market to take back around 60% of its value after a cycle ends. And this is the reason why GS predicted that price range to be the bottom of the big correction that was to come.
Conclusion: Get ready for an end of the downtrend once we reach ~$2400. Be careful when going long before that level is reached.
Besides fibonacci levels the next important part is Elliott Wave analysis. In my last idea I said that I am not sure whether we are past wave 5 or not. At this level I can confidently say that we are most definitely past wave 5 - and that puts us in wave A. Wave A is one of the corrective waves of the big ABC correction pattern (see Wikipedia article on Elliott Waves if you are not familiar with how the principle works). After this wave A is completed we should see wave B, a wave that goes against the trend (meaning: up). It is typical for people during wave B to think that the bear market is over, so be careful once we are there and think twice before buying. Because after wave B comes wave C, another big corrective wave that can (and probably will) extend further than wave A.
On this chart I give you an example of how our ABC wave can look like. However, it is not possible for me to say how long wave A will be for sure. The same thing applies for the other two waves that will come. What we know though is that GS has predicted a bottom to be at ~$2200 - $2300. And as you can see on the chart that price range coincides with an important fibonacci level. It is typical for a market to take back around 60% of its value after a cycle ends. And this is the reason why GS predicted that price range to be the bottom of the big correction that was to come.
Conclusion: Get ready for an end of the downtrend once we reach ~$2400. Be careful when going long before that level is reached.
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As you could see this idea was pretty successful - or at least the part that has unfolded so far. As predicted here we have seen an incredible bounce off the $3000 support level. It happened a little earlier and faster than expected, but the important thing is that it was expected.At this point I would like to repeat that it is not sure how far up wave B will go. It might go to just $4000 as shown above, but other levels are also possible. For example: In case it breaks $4000 there is an important fibonacci level around $4200. Those are the levels I am looking at for a reversal to resume the downtrend.
I want to thank all of you who have liked this idea and provided positive feedback!
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