As institutions, corporations, countries, and more buy into Bitcoin, the cryptocurrency is beginning to transition from a speculative asset to a macro financial asset much like gold, oil, and others. But before that happens, the top cryptocurrency by market cap is mimicking Jesse Livermore’s “speculative chart” with incredible accuracy and precision.
This rare chart pattern known as a Livermore Acumulation Cylinder is expected to continue to develop. The Bitcoin bull wave will reach its peak. We’re also taking a deep dive into the legendary life and untimely death of Jesse Livermore himself.
Speculative Chart: Bitcoin price pattern matches Livermore Accumulation Cycle
Bitcoin price action has been up and down – literally and figuratively. Instead of reaching $100,000, where the bull markets are expected to end, Bitcoin plummeted to lower lows, around $53,000.
Gyrating price movement has made the King of Cryptocurrencies a wedge-like shape with an expanding mouth. The shape closely resembles that of a Livermore Accumulation Circular.
The 2021 BTC bull cycle | Source: BTCUSD on TradingView.com
Below is a chart that shows BTC’s price movement since today’s April high. The pattern could be valid if there is an astronomical amount of speculation volume, driving Bitcoin and other cryptocurrency to even more extreme highs and possibly the peak of this market cycle.
Related Reading | Finding Fibonacci: Is Bitcoin Beginning A “Golden” Recovery?
Before you write off “Livermore’s Speculative Chart,” juxtaposing the 2017 bull run over the same cylindrical price action below follows the rest of the pattern – even going full parabolic the moment the eight phase of the chart takes place. Nine is the end of the rally, and ten marks the beginning to trend bearish.
The 2017 BTC bull cycle | Source: BTCUSD on TradingView.com
Jesse Livermore: We Reminisce Over A Legendary Stock Operator
But who was Jesse Lauriston Livermore and why should be believe his chart pattern might still work today – some 80 years after his death? According to Wikipedia, Livermore is a “pioneer of day trading.”
“In a time when accurate financial statements were rarely published, getting current stock quotes required a large operation, and market manipulation was rampant, Livermore used what is now known as technical analysis as the basis for his trades. His principles, including the effects of emotion on trading, continue to be studied.”
Livermore’s short position ahead of the Wall Street collapse of 1929 was legendary, earning him the title the “greatest trader to ever live.” His legend doesn’t end as a happy one, however. It doesn’t start that way.
After being forced from school by his father, he grew up Massachusetts. With his mother’s support, he ran away. He began his career as a Board Boy at age 14 posting quotes for a Boston-based brokerage. His significant, regular wins had earned him a 1000% ROI by age 20. Livermore had to disguise himself and use fake names in order to continue trading.
Livermore later was the basis for the main character of the best-selling book by Edwin Lefèvre, Reminiscences of a Stock Operator.
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His short positions in panic 1907 earned him over $1 million per day. His mentor at the time, J. P. Morgan, plead with Livermore to stop short-selling – to which he agreed, and instead profited from the rebound. He earned the reputation as the “Great Bear of Wall Street” and was personally blamed for the crash – even receiving death threats and needing to hired armed bodyguards.
This kind of wealth is rare today. Livermore was the owner of a $200,000 yacht. But following this 1929 stock market crash, Livermore’s mental health deteriorated. However, his wife did not kill him. Livermore was also facing a lawsuit by a Russian mistress and bankruptcy.
In 1934 the United States SEC imposed new rules that supposedly impacted Livermore’s trading and he lost his entire fortune. The self-inflicted gunshot fatality caused him to die on November 28, 1940. He left a letter to his wife in which he apologises. Jesse Jr. and his grandson, also tragically died from suicide.
— Tony “The Bull” Spilotro (@tonyspilotroBTC) November 30, 2021
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Featured Image from iStockPhoto. Charts from TradingView.com