Bitcoin’s Future Can Be Predicted
The hubris and grandiosity of the title is meant to grab your attention. Technical Analysis, specifically Gann analysis, can forecast future price behaviors with relative accuracy.
What has been will be again,
What has been done will be done again;
There is nothing new under the sun.
– Ecclesiastes 1:9
Among traders and/or analysts who practice Gann theory, this particular Old Testament Bible verse is a popular one. Gann used that verse in his work and writing because it reinforced his belief that markets are not random, that they are fixed to a certain pattern and that they repeat. Gann theory is, perhaps, the most esoteric and enigmatic form of Technical Analysis. His work involves the realm of extreme logical reasoning as well as a belief in God. To Gann’s reasoning and logic conclusion, a belief in God was essential to understanding the powerful order that was inherent in Nature. In Gann’s time, as well as our contemporary time, many people believe that the secular and the supernatural are opposing sides of thought and deduction. For whatever reason, ever since the Age of Enlightenment, Mankind has devolved into the unspoken idea that to believe in God is to abandon logic, science and reasoning. To Gann, only a Creator could create such order in Nature – even among those environments that appear to have none.
Ok preacher, what does this have to do with Bitcoin?
In a nutshell, Gann teaches that time is the reason for trend changes. Gann’s work is teeming with time cycles, importance of anniversary dates, repetitive price patterns and astronomical cycles. I would encourage any reader to analyze some of the contemporary Gann experts such as Michael S. Jenkins, Constance Brown, Alan Oliver and many others. Some of these authors predicted the most recent bear moves of the last 40 years – many years ahead of time. And you can read them in books published well before things like the dot.com bust or the 2008 housing crisis. But this all applies to Bitcoin as well. And it’s something I want to show you.
The image above is the daily chart for Bitcoin, specifically the swing high before the Mt. Gox debacle. It extends from that November 2013 high all the way to the end of the screen, which brings us to the end of June 2015. Now, let’s look at the move from current all-time high near $20,000 in December of 2017 to now (May 11th, 2019).
The two images above look fairly similar, do they not? In fact, let’s put the November 2013 to June 2015 price action just below the December 2017 to May 2019 price action as a comparison.
Shocking, isn’t it? What if I told you that this behavior is present on any chart in any market? Let’s see what happens if we copy the price action from November 2013 all the way to the current all-time high in December of 2017.
I know, it seems uncanny. It seems a little unbelievable too. To many new traders and analysts, you thoroughly believe in the randomness of markets – this is known as the EMH (Efficient Market Hypothesis) and the random walk theory. I think many traders and analysts find comfort in the theory that there is little order or structure in markets. The idea that there is a fixed pattern in all of Nature that can be reflected in financial markets is a major cause of anxiety and panic. It is much more comforting to believe in the unknown and random and to believe that there is no control. But to discover that there is no randomness, to discover that there is a pattern inherent in Nature that manifests itself in financial markets is deeply troubling to others – so unsettling that the very idea needs to be dismissed and discarded.
I have no idea what the all-time high of Bitcoin will be. But what I do know is that Gann’s work tells us that the next panic cycle happens in 2020 – likely late 2020. And this panic cycle, I theorize, will be currency based – not commodity based (housing, food, oil, gold, etc). This panic cycle has already begun and is going to spiral into a major currency collapse. Right now people around the word are abandoning their sovereign currencies for one currency:
The U.S. Dollar
Did you think I was going to say Bitcoin? That will happen in tandem with the rise of Bitcoin. It appears that the only major surviving sovereign currencies that will exist in any major fashion of value in the world by the end of 2021 will be the US Dollar, British Pound, Australian Dollar and Israeli Shekel. But by that time, Bitcoin will be its own source of value, no longer dependent on a sovereign currency.