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The Bitcoin boom may be just beginning.
The return of the cryptocurrency could become exponential next year, two traders said on Tuesday after bitcoin surpassed $ 19,000 and gained nearly 3.5%, closing on record highs of 2017.
Bitcoin has grown more than 166% year to date, supported by bullish sentiment linked in part to fintech companies including PayPal and Square entering cryptocurrencies.
“It is difficult to give bitcoin intrinsic fundamental value because there is practically a limited supply,” Todd Gordon, founder of TradingAnalysis.com, told “Trading Nation” on Tuesday.
Only 21 million bitcoins will ever be produced.
To try to see where the trade might be headed, Gordon used a concept known as Elliott Wave Theory.
“It’s a wonderful way to value cryptocurrencies because the Elliott Wave is meant to detect the shepherd mentality and the emotions that drive the price – fear and greed – and create very recognizable patterns,” he said, addressing a graph. of bitcoin.
“Elliott’s wave theory is based on the idea that there are five waves in a primary trend, three [up]trends and two interim corrections, ”said Gordon.
The first highest wave occurred in 2014, followed by a decline in 2015 and a long-term uptrend through 2018, Gordon said. The fourth wave has formed “something of a side triangle” over the past couple of years, and the fifth could be the last bitcoin wave up, the trader said.
“The point of all of this is that a reliable relationship in Elliott’s wave theory is that the percentage of distance traveled in that first wave in 2014 is often equal to the percentage change in wave five,” Gordon said.
Seeing as the first wave was a rally of around 658%, Gordon’s target was high.
“I can’t believe I’m going to come out on CNBC and say this, but it’s about 74,000,” he said. “The Elliott wave goes very well with … Fibonacci multiples. If it wants to fall short, it can hit 61% of that target, which is only 34,000.”
Bitcoin rose to around $ 19,045.17 on Tuesday afternoon, according to CoinMetrics.
Another trader saw even higher peaks for the cryptocurrency game.
“I’ve always had to own a few,” said Mark Tepper, president and CEO of Strategic Wealth Partners, in the same interview with “Trading Nation”.
“It’s like a FOMO concept for me,” he said. “If I never owned any and bitcoin hit 100,000 per coin, I would probably cry to sleep every night for the rest of my life if I didn’t own some.”
Until recently, Tepper traded bitcoin like any other speculative investment, owning a small enough amount not to fill his wallet if the trade went south. But that changed when PayPal and other companies started diving into space, he said.
“The thing that has always kept me from being a real bitcoin bull has really been this lack of widespread adoption. But … adoption is happening and those users, those PayPal and Square users, are buying more bitcoins. of what’s actually hitting the market on a daily basis, ”Tepper said.
“You can compare it to Tesla,” he said. “Tesla has grown more than 500% this year. In my opinion … I think bitcoin could potentially be the Tesla of 2021. It could, in my most optimistic case, reach 100,000 by the end of next year. That would be the my bull case. I think my base case is a bit closer to doubling to around 40K by the end of 2021. “
Disclosure: Gordon and Tepper own bitcoin.
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