Using Bitcoin historical prices to try to asses the current price potential of BTC

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

 

With "a string of numbers known as BTC" having gone from "less than a penny to $40,000"... and with institutions and rich people subject to FOMO just like RH players.... there may be no upside maximum. TO THE MOON... which is higher than "sky's the limit"!

 

It has nothing to do with reality. Price is being heavily manipulated with fake tethers. Cash is being pulled from system rapidly. Institutions doing OTC.

interesting day to watch is January 15th. This is when BitFinex must submit documents to NY attorney general office.

my prediction - it will crush spectacularly this year.

 

Google the bitcoin stock to flow model, criticism of it and the gold stock to flow model failure.

 

Just like banks in the 30's lost peoples savings, with no insurance it could happen with bitcoin.
It could be hacked and destroyed for a total loss, unless the fed will back the accounts

It is a black swan risk like no other financial instrument

 

Yes it is. But until then, potentially & partially, it can be used as a thing to absorb inflation (by multiple countries), without raising interest rates.


That's BTC alone, while there's an ocean of other alt/shitcoins/derivatives etc.

Fake money into a fake asset, - reasonable enough.

Say they raise rates, and few weeks later, ban this thing, the falling knife of SnP would fly to the highs of 2008 & bit lower. Add some war into the mix and that would be a small replica of 30's for the market.

 

Thats why its Black swan, If we could fathom the events it would not be
I think the weak link is with the coin owner
Maybe Robinhood gets hit, passwords get corrupted
If the public experiences theft it could quickly become a confidence issue

I feel the public is only accepting payment in bitcoin because it is rising
Once it starts dropping public demand will collapse.

If it drops by half the public will be hurt then the politicians will need to react...thats the end