Image Courtesy of Pixabay

During the past several years I have been intensely studying cycle theory. My interpretation of cycles is that they follow a surprisingly series of patterns — something like wheels within wheels. Price cycles are fractal and repeating. Price movements follow similar movements regardless of price level. So, for example, the Bitcoin price will experience resistance or support at similar levels — whether the price is $5,000, $4,000, $2,000 or below.

Cycles Are Key to Understanding Price Movements (Image Courtesy of Pixabay)

One of the most important concepts behind understanding numbers — whether presidential polls or the Bitcoin price is to consider ranges.

Using Probable Ranges Helped Me Correctly Predict President Trump Would Win the 2016 Election

2016 Presidential Election Electoral College Projection Using Probable Ranges vs. Actual Results

For example, the Bitcoin Probable Price Range (PPR) for today, September 28th was $3,845.78–$4471.88. A PPPR is much more useful than attempting to divine a narrower price such as the closing price, average price, etc. Why is it more useful? It’s more useful because you can compare it to previous PPRs and determine if price is trending. So, if we look at the Bitcoin PPR for the past three days we’ll see:

9–26–17: $3556.87–$4174.97

9–27–17: $3621.51–$4179.28

9–18–17: $3845.79 — $4471.88

This isn’t much data to work with, but we can make a few observations. First, the PPR has trended higher. Both the low end of the range and the upper end of the range are higher. At the same time, as this is being written, the price is receding from the top end of the range. Currently, Bitcoin sits near $4,100.00 having been unable to stay above $4,200.00. Often, when price moves away from either extreme of the probable range, that signals a change in the direction of price. This appears to be what is happening with Bitcoin as the upper end of the PPR has extended significantly higher than the actual price of Bitcoin seems able to reach at the moment.

Another advantage of using Probable Price Ranges is that we can compare those ranges to a larger price grid. Typically, I use Murrey Math to create a price grid. We won’t go into any great detail about how to create the price grid here, but the basics of the grid are fairly simple. For Bitcoin, the longer term price grid ranges from $0 to $10,000.00. We divide $10,000.00 by 8 to arrive at $1,250.00 intervals, which gives us the following longer term grid:

8/8 — $10,000.00

7/8 — $8,750.00

6/8 — $7,500.00

5/8 — $6,250.00

4/8 — $5,000.00

3/8 — $3,750.00

2/8 — $2,500.00

1/8 — $1,250.00

0/8 — $0

The Bitcoin price, or any price for that matter, moves in very definite patterns within the price grid. That doesn’t mean the exact same pattern. But, if you understand the basic pattern, you have a very good chance at being able to predict the future price movement. This is exactly what I did when writing the Bitcoin Price Road-Map back on August 13th.

Image Courtesy of Pixabay

Given the current price trajectory of Bitcoin (and some underlying knowledge of how Murrey Math Cycles work) a target price of $5,000.00 would be well within reason. After this, especially if you are speculating use caution as the Bitcoin Price Road-map suggests the possibility of a 50% decrease in price from $5,000 to $2,500.00. Short-term, taking a look at the “Picture-in-Picture” view of the Bitcoin Price Road-map, the expectation is that price will run up to around $4,375.00 before potentially backing off to around the $4,062.50 level. Medium-term to longer-term, once the Bitcoin price hits $2,500.00 again, then that opens the door to a move all the way up to the $10,000.00 level.

Those words are looking more and more accurate. While Bitcoin may or may not reach $4,375.00, it has certainly been headed in that direction. At or near that level would be the maximum extent that I would expect the Bitcoin price to move before dropping lower again. In fact, right before this post was started, bitcoin crossed below the $4,062.50 level before bouncing back up to around $4,085.00.

If we break down the Bitcoin price a little further we can see potential levels where the price may turn:

8/8 — $5,000.00

7/8 — $4,843.75

6/8 — $4,687.50

5/8 — $4531.25

4/8 — $4,375.00

3/8 — $4218.75

2/8 — $4,062.50

1/8 — $3,906.25

0/8 — $3,750.00

Within the $3,750.00 to $5,000.00 range 2/8 or $4,062.50 is an important number. If $4,062.50 holds, then Bitcoin still has the potential to move higher. This is not what I expect to happen, but just because it is not expected doesn’t mean it won’t happen. Should $4,062.50 fail to provide support then we need to consider the next lower Bitcoin price grid:

8/8 — $3,750.00

7/8 — $3,593.75

6/8 — $3,437.50

5/8 — $3,281.25

4/8 — $3,125.00

3/8 — $2,968.75

2/8 — $2,812.50

1/8 — $2,656.25

0/8 — $2,500.00

If $4,062.50 fails to hold, then the Bitcoin price could press down to near the 5/8 or 4/8 levels of $3,281.25 or $3,1250.00. Ultimately, the expectation is that the Bitcoin price will drop to near the 0/8 (2/8 longer term price grid) or to about $2,500.00 — $2,700.00.

Besides the 2/8 or $4,062.50 level, there is also dual-support at $3,907.00 and $3629.34. Don’t be surprised if the Bitcoin price declines to near the top of dual-support and then moves back above it temporarily before bouncing between $3,907.00 and $3,629.34. Something similar may happen once the price drops below $3,629.34 — don’t be surprised if the price drops before that level and then moves back above it for some period of time.

After Dropping to Around $2,500.00 to $2,700.00, Expect Bitcoin to Lift Off and Approach $10,000.00 (Image Courtesy of Pixabay)

Longer term, the Bitcoin price should bottom somewhere around $2,500.00 — $2,700.00 and then make a run toward $10,000.00. If you purchased Bitcoin below $2,500.00 or simply intend to hold it long-term then a dip below $3,000.00 may simply represent another buying opportunity. However, if you purchased at the top near $5,000.00 you might consider selling and buying in at a lower price in order to maximize the number of Bitcoin you can purchase.

Disclaimer: The information provided here is for informational purposes only. It should not be considered legal or financial advice. You should consult with an attorney or other professional to determine what may be best for your individual needs.

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