There’s a small chance that Bitcoin (BTC) may have reached its peak this cycle at around $70,000 based on the theory of veteran trader Peter Brandt. However, many other price models predict the cryptocurrency could still be far from its cycle peak and might even top out at $210,000 before the bull run ends.
It’s possible, according to experienced trader Peter Brandt’s “exponential decay” theory, that Bitcoin (BTC) may have already peaked this cycle at around $70,000.
As a researcher studying the cryptocurrency market, I’ve come across various pricing models and predictors that indicate the current price might not be the peak yet. Instead, some estimates suggest the price could reach as high as $210,000 before the bull run concludes.
On the 27th of April, experienced trader and analyst Peter Brandt proposed a perspective regarding Bitcoin’s bull markets, indicating they follow a distinct “exponential decay” pattern.
In simpler terms, this phenomenon arises when the price peak in each subsequent market cycle is roughly 80% lower than the preceding cycle’s price peak. According to historical data, this pattern was observed during the last three market cycles.
In simpler terms, Brandt expressed that approximately 80% of the energy from every thriving bull market cycle is given up.
Based on the given decay rate, Brandt’s calculation suggested that the current market cycle would yield a 4.5-fold increase from its low of approximately $15,500. This implies that the cycle peak was anticipated to be around $70,000 – a level surpassed when prices reached $73,000 in March.
Brandt expressed some doubt about this hypothesis, estimating the possibility that Bitcoin had already reached its peak during this cycle to be around 25%.
Others argue that alternate models also blow this theory out of the water.
On April 29th, Giovanni Santostasi, who is both the CEO and Head of Research at Quantonomy, challenged the exponential decay theory by proposing an alternative perspective grounded in long-term power law behavior.
As an analyst, I would comment on Brandt’s theory by saying, “Based on the given data, excluding the pre-halving period leaves us with three data points. However, if we consider the ratios, we are reduced to just two data points. With such limited data at hand, conducting meaningful statistical analysis becomes a challenge.”
Santostasi calculated the difference between price peak percentages and the long-term trend based on a power law, then identified a distinct exponential decay pattern for estimation.
As a crypto investor, I can explain that a power law refers to a particular type of relationship between two quantities. In the context of Bitcoin (BTC), it means that the price of BTC grows at a rate that is a power of the time elapsed since the beginning of the price trend. For instance, if we observe that the BTC price doubles every year, then the price growth can be modeled as a power law function with a power of 2 for time.
Based on the data derived from the genesis block, this price model estimates that Bitcoin’s price will reach approximately $210,000 during the upcoming bull cycle, which is anticipated to peak around December 2025. Conversely, the predicted bottom for the subsequent bear cycle is projected to be around $83,000, according to past trends.
“The analysis utilizes a combination of the power law trend, four-year halving cycles, decreasing peak heights that follow an exponential decay, and additional elements to develop a comprehensive model for estimating future Bitcoin prices.”
A larger number of individuals have shared their forecasts on Bitcoin’s peak during this cycle. Swyftx principal analyst Pav Hundal expressed his belief to CryptoMoon that the price of Bitcoin would reach at least double its current value by the next halving in 2028, which he projected to be around $120,000.
Larent Benayoun, the CEO of Acheron Trading and an accomplished professional in quantitative trading strategies, expects the market to reach a peak around $180,000 before possibly entering a new cycle.
Fidelity Digital Assets updated its assessment of Bitcoin on April 22, declaring that the cryptocurrency is no longer considered a bargain.
Currently, Bitcoin was priced at $62,528 during my composition of this text, representing a 15% decrease from its peak value recorded in mid-March, based on data from CoinGecko.
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2024-04-29 09:13