It’s simple to show you why Bitcoin could be heading to 5000 using one number:
Rate of Return.
If you started investing in Cryptocurrencies a month ago (which volumes indicate many did), you would be disappointed if you invested your money in “the king” Bitcoin:
NOTE: Added return for BTC this morning because the monthly return shot up almost 20% in one day in an impressive effort to make the case this post is trying to make!
You could have thrown a dart at any coin on the USDT exchange on Poloniex and made 2-10 times more money than you would have made in BTC.
But wait, that’s only over a month right? Sure, if you go back a year or longer you can defend a different story, but large increases in volumes in crypto are very recent, so a month is a fair snapshot (Or maybe you prefer I go back years to the last time BTC was trading at $1200+? that makes BTC an even worse investment–see what I mean?).
So that creates the following bullish signs for BTC (long term)
- Subpar returns compared to altcoins,
- Recent announcements of scaling agreements and more major players and even the investing public in general becoming aware of BTC with almost no mention of altcoins
- U.S. stocks trading at overbought levels on the hopes of giant tax cuts (with bearish divergence on the weekly chart we might add),
- Most “joe six-pack” crypto investors avoiding or selling out of BTC to chase fast money in very low cost altcoins.
- A very bullish long term wave cycle chart with very strong volume pattern
Doesn’t it make sense that when big money institutional investors come into the crypto market taking volumes to new levels, BTC should actually produce a rate of return that truly makes it “The King” that most think it is?
So What’s The Trade?
If you buy the bullish case for Bitcoin, should you be rushing to buy today? Hardly.
Short and intermediate patterns for Bitcoin might tell a very different story, so a lot depends on your investment time frame. But, there is plenty of evidence that longer term (not sure what that is in crypto world = Months?) price and volume patterns tell us to consider:
- Bitcoin is highly undervalued and is catching up to the market
- Altcoins are highly overvalued
- New investors will keep pushing prices higher on all higher volume cryptocurrencies
OR (always consider the other possible explanations to assess probabilities!)
- Bitcoin is a clear underpeformer compared to altcoins and is not a good long term investment.
There are no certainties in a trading market, only probabilities, but for now the patterns, numbers and many indicators say the long-term edge is clearly to the bulls.
What does this case mean for $ETH $XMR $LTC and other altcoins? That’s a different pattern analysis for a different day.
Disagree? We’d love to hear your case, feel free to share–maybe we’re missing something in the patterns. Anything is possible….
Cryptopatterns will continue to watch and study the short, intermediate and long-term cryptopcurrency patterns for subscribers to keep them informed on the probabilities for the trades and investments they choose to make.
This site is for informational and entertainment purposes only and not in any way intended to be investment or trading advice. You are 100% responsible for your financial decisions at all times. It is highly recommended you DO NOT make any investment or trading decisions depending upon what you read on this blog/newsletter!