What We Got Wrong
On June 15, 2017, we proposed that a prior decline of –14.94% had set expectations of what Bitcoin participants were willing to accept for downside risk. That logic was turned on its head when Bitcoin declined from the high of $3,018.55 and then fell as low as $1,938.94 or –35.76%.
The revision that we’re making is that as each decline grows, participants will accept even larger declines if the expectation is that it will exceed the prior peak. So far, Bitcoin participants accepted a –14.94% decline followed by a –35.76%. In each instance, these declines were followed by new highs in the price of Bitcoin. By our rationale, Bitcoin will now fall as much as –35% and possibly more as participants become inured to the pain of loss in anticipation of new highs.
Where We Got Lucky
We can’t confidently claim to be right about the prior calls that appear to be “correct.” However, we can point out the coincidences that occurred:
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The decline from $3,018.55 to $1,938.94 was fairly close to the conservative downside target of $1,442.92.
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The recent peak at $4,425.30 was close to the $4,328.74 we set on June 15, 2017.
Upside and Downside Targets
Going forward, we have the following downside targets:
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$1,911.38
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$1,693.47
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$1,475.10
Keep in mind that we’re sticking to our original thesis that parabolic moves are resolved through dramatic declines. We believe that the conservative downside target of $1,911.83 will be achieved.
In accounting for the upside potential, we only have one remaining target which is at $5,735.49.