Cryptocurrency News

The data suggests that bitcoin may still fall to $ 20K, but the winning strategy remains


Bitcoin Unloading (B T c) Spot position when it starts crashing violently on its all-time high, is a bad investment call, at least according to its historical price action.

Eleven-year lifespan of flagship cryptocurrency has seen it Many boom and recession cycles. The BTC / USD exchange rate usually rises parabolic. This subsequently reduces more than half of those profits as profitable traders sell the top. But, at the same time, merchants who buy bitcoin around its local top have to suffer a long-term loss.

Got bitcoin? Chances are you are in profit

However, the overall historical price trajectory of bitcoin remains upside down.

The cryptocurrency runs out from the bottom after each rapid recession cycle and rebounds again to seek new historical highs.

Its weekly timeframe chart shows prices varying high over the years – $ 500 in November 2015, $ 768 in June 2016, $ 2,998 in June 2017, $ 19,891 in December 2017, $ 41,986 in January 2021 And $ 64,899 in April 2021.

Bitcoin boom and recession cycle in recent years. Source: Trading View

PlanB, the brains behind the widely operational stock to flow model that predicts Bitcoin will cost $ 288,000 by 2024, In a tweet on Friday morning noted the cryptocurrency’s ability to return profits to patient investors. Pseudonym analyst Noted Not a single investor who has held bitcoins for more than four years has lost money.

He cited the 200-weekly moving average curve as an invisible price floor that kept the bitcoin market’s bullish bias high during the recessionary correction. The BTC / USD exchange rate tested to move that downward support wave to its downside, only to rebound to new highs later.

The change from red to orange in the chart above shows bitcoin’s rapid exhaustion following the 2020–2021 price jump. Source: PlanB

The statement appeared as a sign of bitcoin price Speed ​​drop. The BTC / USD exchange rate reached close to $ 65,000 in mid-April and fell to as low as $ 30,000 on Coinbase almost a month later. As of May 28, the pair’s bid among traders was close to $ 37,000.

Meanwhile, Planby’s long-term projects make bitcoin like an asset that will keep capital out of traditional markets. The analyst previously wrote that he expects people to buy cryptocurrency for its inherent scarcity – there may be only 21 million BTC in existence.

“Silver, Gold, Countries With [a] Negative interest rates (Europe, Japan, US soon), countries with predatory governments (Venezuela, China, Iran, Turkey, etc.), hedging against billionaire and millionaire quantitative easing (QE), and institutional investors outperformed the previous best. 10 years of to-do property discovery “will influence people to seek security in bitcoin, Planby wrote in his 2019 paper, “Modeling Bitcoin Value with Scarcity,” as he envisioned a trillion-dollar market cap for cryptocurrency.

Bitcoin is still following the stock-to-flow model price trajectory. Source: ByBt.com, PlanB

The model inspires investors who bought bitcoin for about $ 65,000, even if it takes more than four years to make their investment. This applies only when the bitcoin stock-to-flow price model continues to follow the trajectory.

A logarithmic curve chart based on the same bullish model estimates BTC / USD rates to fall to $ 20,000 or less. A negative target appears after sketching a Fibonacci graph between the upper and lower bands of the curve. Its highest deviation is close to $ 111,590, while the lowest is around $ 17,150.

The bitcoin oscillator and the price curve trajectory indicate a reversal of the recession. Source: Bybt.com

The historical significance of the logarithmic curve in predicting bottom and top of value makes it relevant enough for investors to realize their potential long and short targets.

Too unrealistic?

Despite their accuracy, the stock-to-flow model and its derivatives have attracted criticism for their unrealistic rapid depiction of rare assets. Charlie Morris, co-founder and CIO of the crypto data firm ByteTree Coin told Telegraph The low supply does not guarantee high prices against the high demand for bitcoin in November last year.

Morris argued that people would still be able to sell bitcoins from the current active supply to meet market demand.

Nico Cordeiro, chief investment officer and fund manager at Streaks Leviathan, also criticized the original claim of a scarcity-based bitcoin pricing model, noting that no evidence suggests that the US dollar supplies monetary goods (gold, silver, or bitcoin). Determines the market valuation of)

Past performance is not a guarantee of future results. But with the pace of bitcoin rising in institutional circles in view of the low-yield investment safe-haven option (government bonds, US dollars, etc.), many are finding it attractive to “hoddle” the tokens until further notice.

Disclaimer: The views and opinions expressed herein are solely those of the author and do not necessarily reflect the views of CoinTelegraph. Every investment and business move involves risk, and you should do your own research when making decisions.