The principle is a sophisticated form of technical analysis widely followed by traders that analyzes cycles of sentiment in an attempt to predict market performance five waves typically signals a coming downturn. <\/p>\n
Regarding bitcoin, \"under the Elliott Wave model, what we're seeing, we're making a final fifth wave from six cents,\" the younger Prechter told CNBC in a phone interview Thursday. \"It does not imply it will go to zero. It does not imply it will go to six cents. I do think it will happen to the clones [newly formed digital currencies].\" <\/p>\n
The Elliott Wave for bitcoin <\/p>\n<\/p>\n
Source: The Elliott Wave Theorist <\/p>\n
In September 2010, Elliott Prechter wrote in The Elliott Wave Theorist about bitcoin when it traded at 6 cents. Very few in the financial world seriously considered the digital currency at the time. <\/p>\n
\"It proved to be the buying opportunity not just of a lifetime, but so far of all time,\" Prechter said. <\/p>\n
Bitcoin hit a record of $3,025 in June, 50,000 times its price in 2010. The digital currency traded near $2,652 Thursday, more than twice where it started the year. <\/p>\n
Bitcoin (July 2010 - July 2017) <\/p>\n<\/p>\n
Source: CoinDesk <\/p>\n
As a result of the meteoric price surge, Wall Street has started paying closer attention to bitcoin in the last several weeks. <\/p>\n
For example: <\/p>\n
To Prechter, the forecasts for bitcoin to rise dramatically resemble calls in 1999, just before the burst of the dotcom bubble, for the Dow Jones industrial average to reach 100,000. <\/p>\n
He said the excitement surpasses the tulip bulb mania in The Netherlands in the early 1600s. <\/p>\n
As Investopedia tells it, tulip bulbs became such a prized commodity that by 1636 they were being traded on many Dutch stock exchanges and \"many people traded or sold possessions to participate in the tulip market mania.\" <\/p>\n
\"Like any bubble, it all came to an end in 1637, when prices dropped and panic selling began,\" according to the article. \"Bulbs were soon trading at a fraction of what they once had, leaving many people in financial ruin.\" <\/p>\n
\"Technology has advanced greatly, but human psychology is still the same\" <\/p>\n<\/p>\n
Source: The Elliott Wave Theorist <\/p>\n
Some analysts have also compared the excitement around bitcoin and other digital currencies to the Beanie Babies craze in the 1990s. <\/p>\n
Prechter also pointed to the challenges bitcoin and its rival ethereum are facing in order to expand their reach. <\/p>\n
Bitcoin faces an Aug. 1 deadline for developers to agree on a system to upgrade the network and prevent the currency from splitting. Meanwhile, transaction fees ran up to $5 in June and are still near $2. <\/p>\n
In June, some sales of new digital currencies clogged the ethereum network, creating a backlog of orders. Separately, ethereum prices briefly plunged from above $300 to 10 cents on one exchange before recovering. <\/p>\n
To be sure, Prechter told CNBC that a mania \"can be both a mania and a revolution at the same time.\" <\/p>\n
Like many digital currency enthusiasts, he sees significant potential in the cryptocurrencies for automating the banking and legal industries. <\/p>\n
\"The distant future of crypto is bright,\" Prechter said in the report. \"Crypto tech is like the internet in 1999: It was poised to take over the world, but the NASDAQ still fell almost 90% during the dot-com bust of 2000-2002.\" <\/p>\n
But bitcoin may not be part of that future. <\/p>\n
\"It's too soon to know if Bitcoin is Facebook or MySpace,\" Prechter said. <\/p>\n
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Continue reading here: <\/p>\n
Bitcoin bubble dwarfs tulip mania from 400 years ago, Elliott Wave analyst says - CNBC<\/a><\/p>\n","protected":false},"excerpt":{"rendered":" The principle is a sophisticated form of technical analysis widely followed by traders that analyzes cycles of sentiment in an attempt to predict market performance five waves typically signals a coming downturn. Regarding bitcoin, \"under the Elliott Wave model, what we're seeing, we're making a final fifth wave from six cents,\" the younger Prechter told CNBC in a phone interview Thursday. \"It does not imply it will go to zero. Continue reading