The current situation with the price of bitcoin worries many players in the cryptocurrency market. As is shown by the predictions of Alexei Fedorenko, ICBF asset manager, the flagman cryptocurrency is still far from a rock bottom price; we can expect an imminent drop to $4700, but the fall will not stop even there. Today Alexei analyses a graph of bitcoin’s behaviour and finds technical reasons for its drop in price:

On 12 October last year bitcoin broke through the line of resistance and a few days later set a new minimum price. On the graph this is indicated by point 2 of the Wolfe wave, from which we calculate the layering of the pattern. Note that the preceding point 1 is on the line above it. With a bearish pattern, point 3 will always be higher than point 1, whilst in the case of a bullish pattern it would be lower. Point 4 is traditionally situated in a price range between points 1 and 2, and the fifth is on the line connecting points 1 and 3. It is point 5 which crosses the price, ending up in the “sweet zone”.

In the sweet zone the bulls “played”, pushing prices up, and did not notice they had fallen into the bears’ wedge trap. This was the beginning of the end of investment in bitcoin by the “lost” bulls of the market: there were no more prices higher than the upper limit of the wedge, and a downtrend began.

On 5 March a price trap for bulls was created in an identical fashion, and the price went once more into a downtrend.

5% of the market will take their profit in the area of point 6 of the 1–4 target line of the bearish Wolfe pattern, when bitcoin will be worth no more than two thousand five hundred dollars.