Bitcoin Crash Predictions
Bitcoin is up 1,666.66% year-to-date, which is a phenomenal run toward higher prices. The problem with this run is that the price action has been parabolic in nature, and parabolic trends are unsustainable. Based on the parabolic trend currently in development on the Bitcoin price chart, I can only assume that once Bitcoin has exasperated its move toward higher prices, a crash will follow.
I am sure I am not the first to suggest that this parabolic move will end badly, and I am sure many pundits provided and outlined their Bitcoin crash predictions. I am in that same camp, and I have seen enough parabolic trends to know that they all end in tears. The questions on my mind, and perhaps others like myself, are “When will it end?” and “Will Bitcoin crash in 2018?”
Bitcoin Crash History
Bitcoin is known for its incredible runs and its painful corrections that have been created in the process. The magnitude of these corrections is in crash proportions, where large a percentage of value has been lost in a short amount of time. The following is a list of these painful corrections/crashes.
- On August 16, 2012, Bitcoin prices hit a high of $16.41, and three days later, on August 19, the BTC price hit a low of $7.10, which translated into a correction of 56.74%.
- On April 10, 2013, Bitcoin prices hit a high of $259.34, and two days later, on the April 12, the BTC price hit a low of $45.00, which translated into a correction of 82.65%.
- On December 4, 2013, Bitcoin prices hit a high of $1,138.58, and 14 days later, on December 18, the BTC price hit a low of $612.51, which translated into a correction of 46.20%. This was the beginning of a much larger correction where Bitcoin shares finally bottomed a little over a year later on January 14, 2015, at $152.40, which represented a correction of 86.62% from peak to trough.
- On November 4, 2015, Bitcoin prices hit a high of $502.00, and seven days later, on November 11, the BTC price hit a low of $294.00, which translated into a correction of 41.43%.
- On June 18, 2016, Bitcoin prices hit a high of $778.70, and five days later, on the June 23, the BTC price hit a low of $540.17, which translated into a correction of 30.63%. This was the beginning of a larger correction where Bitcoin shares finally bottomed on August 1, 2016, at $465.28, which represented a correction of 40.25% from peak to trough.
- On January 4, 2017, Bitcoin prices hit a high of $1,139.89, and eight days later, on January 12, the BTC price hit a low of $751.34, which translated into a correction of 34.08%.
- On June 12, 2017, Bitcoin prices hit a high of $2,980.00, and 34 days later, on July 17, the BTC price hit a low of $1,830.00, which translated into a correction of 38.60%.
- On September 2, 2017, Bitcoin prices hit a high of $4,979.90, and 13 days later, on September 15, the BTC price hit a low of $2,972.01, which translated into a correction of 40.32%.
- On November 8, 2017, Bitcoin prices hit a high of $7,888.00, and four days later, on November 12, the BTC price hit a low of $5,555.55, which translated into a correction of 29.57%.
- On December 8, 2017, Bitcoin prices hit a high of $16,666.66, and the next day, on December 9, the BTC price hit a low of $12,701.05, which translated into a correction of 23.79%.
These examples illustrate that one can easily expect volatility and large corrections that make it feel like the Bitcoin price is crashing. These abrupt selling events can occur at any moment, and at any time. So it’s not a question of if, but more like when a Bitcoin crash is going to occur.
Will Bitcoin Crash in 2018?
I have the inclination to believe that Bitcoin will experience a tremendous correction in 2018, which will be on par or worse than the previous corrections. The reason why I am confident in this Bitcoin price prediction is that the price ascent has become parabolic, and parabolic trends are unsustainable. This parabolic trend is illustrated on the following Bitcoin price chart.
Chart courtesy of TradingView.com
This price chart illustrates a parabolic trend. Parabolic trends are unsustainable because, in order for them to continue, the price must continue to appreciate at an accelerated rate, which requires an increasing rate of buying pressure. Once the buying pressure subsides, a crash usually follows. This crash will likely be on par with some of largest corrections incurred in Bitcoin, where 80% of the value will be shed.
The silver lining I have to share is that I do not believe that the Bitcoin price will crash from its current price point of $16,000. Parabolic trends end in blow-offs, where the BTC price reaches heights not even the most optimistic investors would have ever thought were possible.
When Is Bitcoin Going to Crash?
I believe that Bitcoin will crash only after it moves beyond the $60,000 mark. The reason why I believe so is that the entire Bitcoin price chart has been constructive in nature.
This constructive price action is illustrated on the following BTC price chart.
Chart courtesy of TradingView.com
Constructive price action is made up of an alternating two-wave structure containing impulse waves and consolidation waves
The impulse waves, which are highlighted in green, define the stage in a bullish trend where the asset’s price makes a sustained move toward higher levels.
The consolidation waves, which are highlighted in purple, define the stage in a bullish trend where the asset’s price corrects and refrains from advancing. This price correction is necessary in order to unwind any overbought conditions that were created during the impulse wave that preceded it. This sets the stage for a new impulse wave to develop.
In April of this year, Bitcoin prices broke out of the consolidation wave and a new impulse wave has been in development ever since. These impulse waves have been parabolic in nature and, therefore, I am expecting a parabolic blow-off to occur.
The great thing about this wave structure, aside from just suggesting that higher prices are in development via an impulse wave, is that it can also be used to create a Bitcoin price objective.
The theory behind this wave structure is that consolidation waves act as midpoints in a trend and, therefore, the impulse wave that is currently in development should mirror the length of the impulse that preceded the consolidation wave. The caveat, of course, is that instead of using a linear scale for the length, a log-based scale is used. Under this premise, the impulse wave currently in development can reach heights north of $60,000 before everything is said and done. At which point, I fully expect a Bitcoin price crash to follow.
I believe Bitcoin will suffer a crash in 2018, but my BTC crash forecast suggests that the move toward higher Bitcoin price has not yet run its course. Therefore, higher BTC prices will be reached before Bitcoin finally blows off and the crash that everyone is anticipating finally occurs.