Analysts successfully predicted a price correction, with the next high coming in 2018

On Thursday, May 25, while the price of Bitcoin was still soaring, an analyst predicted that a price correction would occur soon. As she predicted, the price of the currency fell rapidly before reaching $2,800. She also gave some other price predictions and believed that the price of Bitcoin would remain sluggish until the end of the year, but would reach a new high in 2018.

Fibonacci Retracements

Nicola Duke, an analyst at Forex Analytix, used the Fibonacci Retracement method to analyze Bitcoin's price trend and determine its support and resistance levels.

This popular technical analysis tool is based on the theory that when a trend moves in one direction, its pullback in the opposite direction will be blocked at a predictable level, and then the trend will resume in the original direction. By analyzing the highest and lowest prices or the rise and fall patterns in Bitcoin's history, it can eventually predict future trends.

CNBC explained:

According to Fibonacci analysis, the way a bull market develops is usually by getting blocked at a certain level and then returning to the previous direction of movement.

Bitcoin Price Analysis

Duke’s Fibonacci retracement analysis chart, based on weekly prices on Bitstamp dating back to 2013, was published Thursday on Tradingview.com.

Her chart shows that $2,283 is a short-term support trend; another support level is $2,800. In addition, Bitcoin has two major support levels below $2,283 - one is $2,145, and the other more likely is between $1,750 and $1,780.

Duke explained in an interview with CNBC on Thursday that Bitcoin's "second wave" of growth began in the fall of 2013, and the price of Bitcoin soared for several months before falling. In January 2015, the price of the currency bottomed out and then began to rise. Bitcoin is currently in the "third wave" of growth. According to her research:

After the price reaches $2,800, it will most likely start to fall, and then it may fall to $1,780 or even $1,470.

Duke believes that the next wave, the fourth wave, will last 61.8% longer than the second wave. 61.8% is a key figure used in Fibonacci analysis.

She believes that the recovery after the price correction could begin in January next year. She told CNBC:

We will see prices bottom out in January, and the stock market will start to correct then.

After that, the price of Bitcoin should rise to $3,350 and then $4,480.