Author: Katherine Ross, Blockwoeks; Translated by: Deng Tong, Jinse Finance
Buckle up, we’re going to dive into some technical analysis.
On Monday, Bitcoin fell below $60,000. Although the price has since recovered to that level, speculation remains about the next support line, with some wondering if the price could fall further.
John Glover, chief investment officer at Ledn, talked about some technical levels to watch. He said the next support level will be $55,000 or $56,000 ; prices we last saw at the beginning of May.
If Bitcoin falls below this level, $49,000 is in focus.
Despite the volatility, Glover remains optimistic about the overall environment.
“I think there will be inflationary pressures in the fall, which will drive bitcoin higher. I think the [Securities and Exchange Commission] will approve a [spot ether ETF], which could happen in the late summer, which will drive prices higher,” Glover said.
“And then there’s going to be some exogenous shock that we don’t even know about, but that I think could drive prices back up. But really, we all have to recognize that we’re in the early innings of Bitcoin adoption by the larger investor market,” he continued.
His analysis is based on the Elliott Wave Principle, which studies recurring, long-term price patterns that result from changes in investor psychology and sentiment. The theory states that markets move in predictable, volatile patterns that reflect the collective mood of investors. If you’re a nerd like me, it’s a fun way to gauge the long-term outlook by watching how history repeats itself.
The Elliott Wave Theory assumes there are five waves in total. Based on Glover’s assessment, we are most likely in wave three of five. As the chart shows, Bitcoin did go through waves one and two. Wave three usually indicates that another pullback is needed before Bitcoin can gain momentum higher.
The general consensus is that once we get past the summer, things might go more smoothly from there (keyword: might).
In the Empire newsletter, we have previously discussed Bitcoin’s move above $80,000 by the end of the year based on multiple analyst predictions.
“My core thesis is that I believe BTC will hit $85,000 to $95,000 by the end of the year, but I don’t think there will be a catalyst for that until sometime in late summer, which would be the SEC approving an Ethereum ETF, which would drive all asset prices higher,” Glover said.
We may see these ETFs approved in early July. An updated registration statement was filed last week.
Glover’s predictions can be seen in either wave below.
Glover’s Elliott Wave Analysis of Bitcoin
Glover noted that at this stage, Bitcoin is trading like a tech stock. Think Meta or Tesla a few years ago. He said we will see it pull back, but then recover like it did earlier this week.
But Glover’s focus isn’t limited to Bitcoin. He also talked about why we haven’t seen the explosive growth in Altcoin that investors have become accustomed to in past cycles.
This can be attributed in part to the changing investor mix in this cycle, with highly speculative retail investors in the minority. Clearly, institutions and large companies like BlackRock have taken center stage with their products. This is not particularly surprising given the events of 2022.
Glover ultimately believes that, outside of the top five or so, Altcoin may not rebound this cycle.
“Traditional investors aren’t buying Altcoin, it’s just retail investors who are buying Altcoin, and a lot of them got badly hurt in 2023. I think a lot of the people who were very willing to speculate like crazy in the Altcoin market aren’t there anymore, and they got badly hurt, and now they’re like, ‘I don’t want to feel that pain again.’ So I think it’s just a matter of volume, and that’s correct,” Glover said.
So buckle up as we brace ourselves for a brutal summer. If we can make it through this, there may be better days ahead.
