The following is a very rudimentary price prediction for bitcoin. I wouldn't use it to make decisions but rather just use as another input in a multi data input decision making model. That is more robust than making decisions solely on historical data, especially in an emerging technology
Looking at the Bitcoin price data from 2010 to Present I was able to identify 5 major bull-bear cycles (with the 5th being the present one)
The first one was when BTC went from a low of 5 cents (the earliest I could get data was 18/07/2010 00:00)to a high to $29.60 or 592x in 326 days. Then it dropped -93% in 164 days to a low of $2.05. It then started to rise to $230 a 112x fold increase over 509 days
It then crashed -71% in 88 days to $68.36. Then it rose to $1,124 over 149 days a 17x increase. Then it crashed -84% in 411 days, as nasty bear market given how long it lasted.
It bottomed out at $177, and then it went into the major run most are familiar with, the one that topped at $19,300 in 2017. A 109x return over 1067 days. After the peak, it dropped 83% over 364 days to $3194.96
From that there is some data that can be useful to look at, in terms of drawdowns, the average peak to through drop is -82.75% over 256 days.
In terms of rises, it can be a little tricky because the first rise was so monstruous (592x), so if I remove that one (to avoid skewing the data) and average the others, the average rise is 79x. The low of the last cycle was $3194 in Dec 2018. If the price rises by 79x that leads to a price of just over $250,000 a coin, which is also consistent with other forecasts such as stock to flow models.
Of course, every cycle needs more buying power (money) to drive the coin higher. The question is, is the buying power present to produce such outcome? With institutions adopting bitcoin and more importantly, engaging in a herd like mentality of 'so and so bought it, i guess I need to buy it too' and also facing pressure from investors to make money in crypto I suppose the answer is positive (0% rates is also driving their buying).
But lets assume half of the rise to be more conservative. so BTC would go to $125,000 and then proceed to have an average bear market (-82.75% over 256 days). If this model is correct, BTC will go from the current $41k to ~$125Kish and then drop to $21,500k at the lows
Looking at the Bitcoin price data from 2010 to Present I was able to identify 5 major bull-bear cycles (with the 5th being the present one)
The first one was when BTC went from a low of 5 cents (the earliest I could get data was 18/07/2010 00:00)to a high to $29.60 or 592x in 326 days. Then it dropped -93% in 164 days to a low of $2.05. It then started to rise to $230 a 112x fold increase over 509 days
It then crashed -71% in 88 days to $68.36. Then it rose to $1,124 over 149 days a 17x increase. Then it crashed -84% in 411 days, as nasty bear market given how long it lasted.
It bottomed out at $177, and then it went into the major run most are familiar with, the one that topped at $19,300 in 2017. A 109x return over 1067 days. After the peak, it dropped 83% over 364 days to $3194.96
From that there is some data that can be useful to look at, in terms of drawdowns, the average peak to through drop is -82.75% over 256 days.
In terms of rises, it can be a little tricky because the first rise was so monstruous (592x), so if I remove that one (to avoid skewing the data) and average the others, the average rise is 79x. The low of the last cycle was $3194 in Dec 2018. If the price rises by 79x that leads to a price of just over $250,000 a coin, which is also consistent with other forecasts such as stock to flow models.
Of course, every cycle needs more buying power (money) to drive the coin higher. The question is, is the buying power present to produce such outcome? With institutions adopting bitcoin and more importantly, engaging in a herd like mentality of 'so and so bought it, i guess I need to buy it too' and also facing pressure from investors to make money in crypto I suppose the answer is positive (0% rates is also driving their buying).
But lets assume half of the rise to be more conservative. so BTC would go to $125,000 and then proceed to have an average bear market (-82.75% over 256 days). If this model is correct, BTC will go from the current $41k to ~$125Kish and then drop to $21,500k at the lows
