Using Gann's 50% Retracement Rule to Predict Bitcoin's Future Price Movement
Bitcoin (BTC) is a highly volatile asset, and predicting its future price movement is notoriously difficult. However, some analysts believe that Gann's 50% retracement rule could be used to make predictions about Bitcoin's future price movement.
Gann's 50% retracement rule suggests that after a significant price movement in a financial market, the market tends to retrace approximately 50% of that move in about half of the time it took to make that move. In other words, if a market makes a significant move, the price is likely to retrace about half of that move, and the time it takes for the price to retrace that move is likely to be about half the time it took to make the move.
This rule has been observed in Bitcoin's past price movements. For example, after the 2017 high of nearly 20,000, it took around 364 days for BTC to hit a bottom at 3,000. It then took about 189 days to retrace to the 50% level at 11,500. After the 2019 high of around 13,000, it took approximately 259 days for BTC to hit a bottom at 4,000. It then took only about 49 days to retrace to the 50% level at 11,500.
More recently, after the 2021 high of nearly 64,000, it took around 98 days for BTC to hit a bottom at 29,000. It then took only about 49 days to retrace to the 50% level at 47,000. Based on this rule, if the recent bottom is in, BTC should retrace to 42,000 before or around May 2023, which is roughly 50% of the distance from the 2021 high to the recent bottom.
While Gann's 50% retracement rule is not a foolproof method for predicting Bitcoin's future price movement, it is one tool that traders and analysts can use to inform their decision-making. As always, it's important to conduct your own research and due diligence before making any investment decisions.
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