BTC: ROAD TO 50K ? NO, TO 100K - HALVING UPDATE #3 - MUST READ
Hello, this is a MUST READ for all the people that want to have a different perspective about the Long term and not just being pushed and pulled here and there by minimal market fluctuations of 200usd or 1000usd BTC price . This will be my bible for next months/years, of course I am open to hear your ideas and listen to every objection, which are as I always say, more useful than approvals. Please zoom out the chart as I am aware there are many others drawings, and the analysis starts in 2011 which is not immediately visible in the chart as it is presented to you by default.
Few months ago I published an idea of what halving could bring in terms of price (the second chapter of the first idea from 2018, which was actually pretty close to what happened in 2019-2020 even if I missed some points that I realized just now- you can find it linked below) but as new info are added to the historical data now we can get a clearer picture of what it could be in the following months/years.
To sum up, I came up with three targets we can identify merely with calculations over price movements or over time patterns:
1- 350,000 ish for 1 bitcoin
2- 100,000 ish for 1 bitcoin
3- 50,000 ish for 1 bitcoin
Bear with me, I will explain in a second how I got those numbers.
First, two things to notice. By looking at the graphs, I identified two different kind of BULL RUN, both of them seems to hold as we have just 2 past halvings available, so data are not enough to establish a recurring pattern and which one is wrong.Maybe it is a mix of them, only time will tell us.
Let's see what they are:
1- TEMPORAL LINKED BULLRUN : it exclusively depends on time, we have a minimum before a halving roughly 1y before roughly and the max post halving roughly 1-1.5 year after. We just need a trendline and see where time hit it to determine the price.
2- PRICE LINKED BULLRUN: time is not considered. Just before the halving, a trendline is defined that defines the next top 2 halvings later: in 2011 a rising trendline was created that perfectly caught the top of 2018!
The same way, in 2015 a LT trendline was formed that can identify the top for the upcoming halving bullrun. SInce it is dynamic, we do not know where the price will hit it, so we need an additional variable to get it. Here is where maths and historical data comes in our help as we will see later. The 2 trendlines are the red ones.
Another thing to notice is that once the trendline was broken, in Jan 2015, the price fluctuated just above the 200MA for almost one year. In 2018-2019, the price broke the new trendline but after just a couple of months it went above it again. (I highlithed these two moments with red circles). I think this last one was the anomaly as there was an overanticipation of the upcoming halving (more than 1y) due to more awareness towards the BTC as a store of value and much more people willing to invest since they saw with their own eyes that it could reach 20k level.
So, the anomaly was the 14k pump of mid 2019: indeed, the price (even before covid 19) didn't take much to go below the trendilne again. Like it or not, this is more or less the fair value right now: between the trenline and the 200weekly average. NOW we are in a more "normal" situation. And like it or not, that pump was paradoxically detrimental to BTC as it slowed don the whole process. I honestly was surprised by the pump from3k to 14k in 2 months, but from this angle everything is clearer now, isn't it?
But let's finally talk about the targets:
1- The first target, 350k, was obtained by simply calculating from the fibonacci extension (better to say retacement) from post-halving high and following retracement and sensequently adding the % rise left to the top to reach the NEXT halving high. It is a little tangled procedure, so let's just take the result: 350,000 per bitcoin. According to the trendline, we would reach that level in Dec23.
2- The second one is obtained by calculating the % from the previous after halving top to the post halving one: we got 7,000% in the first case and 1,700% in the second. Doing the proportion the next one is 400%, so 5x from 20,000 -> 100,000. According to thetrendline, we will reach that level in August 2022.
3- 50,000 is the result I obtained in my other idea linked below.
Here is where our reason must help us to indentify which is the possible one. Indeed, TA and pure math can give us some data, but then it is up to us to interpret them at best and use our brain to understand if they are plausible or complete crazyness. Even if would be great to think of a 350k target, I opt for the second one, 100,000usd per bitcoin, for two reasons:
1- Bitcoin moves exponentially in bubbles but logaritmically in price over time, asyntotically converging towards its upper limit. Hence I think it is wrong to use a linear proportion as we did in the 350,000 scenario, the second one suits the best (a decreasing rate of growth, as it is intrinsic in BTC code and laws also).
2- Gold comparison: market cap of Gold (reasonably assuming it represents the 100% of store of value asset, even if not, we compare BTC with gold as it shares the same features) is currently 9,000Bn (9 trillions). Dividing for 21,000,000 bitcoin (there are 18,300,000 right now, but the market already discounts for 21mn since we already know the maximum number that will ever exist) we get 430,000usd for 1 btc. Here is where many make a mistake: this would be the value BTC will have just if it completely SUBSTITUTES gold, (e.g. if it gets the 100% market share of store of value assets). I think it will be max 50%, let's say 30% to be conservative, more reasonably 20% at least within the timeframe we are analysing (next 1-2 years) - that would be a great result. As far as awareness and adoption will increase in the next decade, we could also approach 50% level, but we are reasoning bewteen now and 2024.
So, if the value of gold stays the same, I think that a value between 20-30% of 430k (e.g between 85k and 125k is a good estimate for the value of 1btc.
Of course it could also double or triple, considering the situation we are going through. Simply, for bicoin to have higher value, as of now, we also need gold to increase proportionally.
To sum up, the 350,000 level is a more than best case scenario value that can be considered true in the next years only if:
1 - gold will triplicate its value in the same timeframe;
2 - a crazy bubble on BTC will form;
3 - we price in the fact that 3-4 millions of BTC are lost forever (according to a recent estimate - 75%-80% of the total), so they are existing but it is like they were not. In this case we multiply 430k by 0.75-0.80 and we get 324,000-344,000usd.
4 - we discover other uses for BTC that we are currently unaware of.
With the info and data we have now I would stick to my 100,000 prediction for the moment. Happy to be wrong if it goes higher :)
P.S.:You probably noticed that between the temporal related bullrun and the price related one I use a mix of them, but it is nice to notice that the initial calculations make sense when we apply logic.
Do not forget to let me know what you think and enjoy the BULL RUN !
Cheers
Few months ago I published an idea of what halving could bring in terms of price (the second chapter of the first idea from 2018, which was actually pretty close to what happened in 2019-2020 even if I missed some points that I realized just now- you can find it linked below) but as new info are added to the historical data now we can get a clearer picture of what it could be in the following months/years.
To sum up, I came up with three targets we can identify merely with calculations over price movements or over time patterns:
1- 350,000 ish for 1 bitcoin
2- 100,000 ish for 1 bitcoin
3- 50,000 ish for 1 bitcoin
Bear with me, I will explain in a second how I got those numbers.
First, two things to notice. By looking at the graphs, I identified two different kind of BULL RUN, both of them seems to hold as we have just 2 past halvings available, so data are not enough to establish a recurring pattern and which one is wrong.Maybe it is a mix of them, only time will tell us.
Let's see what they are:
1- TEMPORAL LINKED BULLRUN : it exclusively depends on time, we have a minimum before a halving roughly 1y before roughly and the max post halving roughly 1-1.5 year after. We just need a trendline and see where time hit it to determine the price.
2- PRICE LINKED BULLRUN: time is not considered. Just before the halving, a trendline is defined that defines the next top 2 halvings later: in 2011 a rising trendline was created that perfectly caught the top of 2018!
The same way, in 2015 a LT trendline was formed that can identify the top for the upcoming halving bullrun. SInce it is dynamic, we do not know where the price will hit it, so we need an additional variable to get it. Here is where maths and historical data comes in our help as we will see later. The 2 trendlines are the red ones.
Another thing to notice is that once the trendline was broken, in Jan 2015, the price fluctuated just above the 200MA for almost one year. In 2018-2019, the price broke the new trendline but after just a couple of months it went above it again. (I highlithed these two moments with red circles). I think this last one was the anomaly as there was an overanticipation of the upcoming halving (more than 1y) due to more awareness towards the BTC as a store of value and much more people willing to invest since they saw with their own eyes that it could reach 20k level.
So, the anomaly was the 14k pump of mid 2019: indeed, the price (even before covid 19) didn't take much to go below the trendilne again. Like it or not, this is more or less the fair value right now: between the trenline and the 200weekly average. NOW we are in a more "normal" situation. And like it or not, that pump was paradoxically detrimental to BTC as it slowed don the whole process. I honestly was surprised by the pump from3k to 14k in 2 months, but from this angle everything is clearer now, isn't it?
But let's finally talk about the targets:
1- The first target, 350k, was obtained by simply calculating from the fibonacci extension (better to say retacement) from post-halving high and following retracement and sensequently adding the % rise left to the top to reach the NEXT halving high. It is a little tangled procedure, so let's just take the result: 350,000 per bitcoin. According to the trendline, we would reach that level in Dec23.
2- The second one is obtained by calculating the % from the previous after halving top to the post halving one: we got 7,000% in the first case and 1,700% in the second. Doing the proportion the next one is 400%, so 5x from 20,000 -> 100,000. According to thetrendline, we will reach that level in August 2022.
3- 50,000 is the result I obtained in my other idea linked below.
Here is where our reason must help us to indentify which is the possible one. Indeed, TA and pure math can give us some data, but then it is up to us to interpret them at best and use our brain to understand if they are plausible or complete crazyness. Even if would be great to think of a 350k target, I opt for the second one, 100,000usd per bitcoin, for two reasons:
1- Bitcoin moves exponentially in bubbles but logaritmically in price over time, asyntotically converging towards its upper limit. Hence I think it is wrong to use a linear proportion as we did in the 350,000 scenario, the second one suits the best (a decreasing rate of growth, as it is intrinsic in BTC code and laws also).
2- Gold comparison: market cap of Gold (reasonably assuming it represents the 100% of store of value asset, even if not, we compare BTC with gold as it shares the same features) is currently 9,000Bn (9 trillions). Dividing for 21,000,000 bitcoin (there are 18,300,000 right now, but the market already discounts for 21mn since we already know the maximum number that will ever exist) we get 430,000usd for 1 btc. Here is where many make a mistake: this would be the value BTC will have just if it completely SUBSTITUTES gold, (e.g. if it gets the 100% market share of store of value assets). I think it will be max 50%, let's say 30% to be conservative, more reasonably 20% at least within the timeframe we are analysing (next 1-2 years) - that would be a great result. As far as awareness and adoption will increase in the next decade, we could also approach 50% level, but we are reasoning bewteen now and 2024.
So, if the value of gold stays the same, I think that a value between 20-30% of 430k (e.g between 85k and 125k is a good estimate for the value of 1btc.
Of course it could also double or triple, considering the situation we are going through. Simply, for bicoin to have higher value, as of now, we also need gold to increase proportionally.
To sum up, the 350,000 level is a more than best case scenario value that can be considered true in the next years only if:
1 - gold will triplicate its value in the same timeframe;
2 - a crazy bubble on BTC will form;
3 - we price in the fact that 3-4 millions of BTC are lost forever (according to a recent estimate - 75%-80% of the total), so they are existing but it is like they were not. In this case we multiply 430k by 0.75-0.80 and we get 324,000-344,000usd.
4 - we discover other uses for BTC that we are currently unaware of.
With the info and data we have now I would stick to my 100,000 prediction for the moment. Happy to be wrong if it goes higher :)
P.S.:You probably noticed that between the temporal related bullrun and the price related one I use a mix of them, but it is nice to notice that the initial calculations make sense when we apply logic.
Do not forget to let me know what you think and enjoy the BULL RUN !
Cheers
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Trade forex, oil, crypto, indices, and keep 80% of the profits you make, while losses are covered!
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