Bitcoin: the most probable scenario 2018-2022, boring but likely
This is assuming the market psychology is the same now as it was after the 2014 bubble/crash. If the market cycles in bitcoin work like this - bubbles of speculative exuberance followed by crashes and long reversals - then this is what we'll see going forward. And, in all probability, this is the single most likely scenario. It won't be exact but it is the most likely at this point. I saw someone claim that bitcoin has had 9 bubbles in total and i think that's just the way this market works! It's prone to bubbles! So, in all likelihood, this is what we'll see going forward. I've just drawn roughly what happened between 2014-2018 onto the end of where we are now, 2018-2022
There's plenty of space for bitcoin to grow: ETFs, institutional involvement, infrastructure developments, regulation hurdles, and when all of this affects the price, the next wave of retail investors see it going up, get FOMO, and then it gets out of hand and that could easily be the next bubble.
It took 3 years from the end of the 2014 bear market to get to the bubble we saw in december 2017. So, i'd advise against predicting 50k by the end of the year. I'd love it, but in all likelihood, it will probably be another 3 years until we see the next top, and that will probably be 250-300k in late 2021/early 2022. Sorry to be slow and boring, i know we all want 20k in the next 2 months but let's be honest, we have to consider the most likely scenarios here and having a huge upwards spike now would be strange. Possible, but not the most likely scenario.
I'd also advice AGAINST thinking that the market has bottomed already. It's possible, but that would be a comparatively short bear market. In 2014, it lasted for about a year before it hit the bottom. That means we could well see one more move down to 5k (or a bit less) in around october. It could be over now, and it could be just a very short bear market, but again, that's not the most likely scenario. So be careful not to get too cocky too soon!
In short; it's probably best to ignore those that say we're retesting 20k in the next few months. Unfortunately it's likely to be slow and boring for the next year. And the year after that. But if you take your time there's still plenty of opportunity ahead. It's possible that the market has sped up and we've bottomed already and we'll see the next peak earlier, but that will still be at least 2 years away.
Dull and uneventful for the next year, but that's how markets work.
There's plenty of space for bitcoin to grow: ETFs, institutional involvement, infrastructure developments, regulation hurdles, and when all of this affects the price, the next wave of retail investors see it going up, get FOMO, and then it gets out of hand and that could easily be the next bubble.
It took 3 years from the end of the 2014 bear market to get to the bubble we saw in december 2017. So, i'd advise against predicting 50k by the end of the year. I'd love it, but in all likelihood, it will probably be another 3 years until we see the next top, and that will probably be 250-300k in late 2021/early 2022. Sorry to be slow and boring, i know we all want 20k in the next 2 months but let's be honest, we have to consider the most likely scenarios here and having a huge upwards spike now would be strange. Possible, but not the most likely scenario.
I'd also advice AGAINST thinking that the market has bottomed already. It's possible, but that would be a comparatively short bear market. In 2014, it lasted for about a year before it hit the bottom. That means we could well see one more move down to 5k (or a bit less) in around october. It could be over now, and it could be just a very short bear market, but again, that's not the most likely scenario. So be careful not to get too cocky too soon!
In short; it's probably best to ignore those that say we're retesting 20k in the next few months. Unfortunately it's likely to be slow and boring for the next year. And the year after that. But if you take your time there's still plenty of opportunity ahead. It's possible that the market has sped up and we've bottomed already and we'll see the next peak earlier, but that will still be at least 2 years away.
Dull and uneventful for the next year, but that's how markets work.
Comment:
I posted the last update within 10% of the top, when bitcoin was right on my predicted line, saying the rest of my prediction (bitcoin reaching 250k) was no longer going to happen. I was correct - I’m a god, surely?
However, I had no idea that the macro environment would change in the way that it did, and drag bitcoin and ethereum down with it.
My other prediction - that Ethereum is a better investment than bitcoin - has been remarkable; in previous cycles, ETHBTC has gone down in bear markets, and largely been an indicator of risk. But this hasn't happened this time! ETH has matched BTC.
This suggests that the next bull market will see ETHBTC rising fast and even Ethereum flipping Bitcoin as the largest cryptocurrency. I continue to believe that Ethereum will outperform Bitcoin. Hate on me all you want, I'm all in ETH. (Staking also earns a nice extra yield!)
Now, at the beginning of 2023, many people are saying 'this is not the bottom of the bear market'. They say that because the %drawdown from the top is less than previous cycles. They're holding out for lower prices to buy, claiming “we’re going lower”. I think this is dumb, because 1) the %drawdown is not a good indicator of pain/bottoms, because the top of the last cycle was so different; slower and protracted rather than a blow-off top. Using the 200WMA is a much better method. And 2) You can’t predict the exact bottom. It depends on factors outside your control, like interest rates, Putin’s temperament this month, or fraudulent crypto exchanges collapsing. Don't wait to buy; base long term trades off long term decisions, not long term trades off short term decisions. Otherwise you'll be sitting on the sidelines.
But even though you can’t predict an exact bottom or what’s going to happen in the short term - evidenced by bitcoin being above/below my original red line most of the time - you can tell what’s going to happen in the long term - evidenced by bitcoin following the *trend* of my line for 3 whole years! So, I'm all in on ETH, and predicting a 20x gain. As for when, it’s all macro-dependent; when will the fed pivot? How long will that last? Who knows. ETH will do very well during the next easing, that’s for sure, and it’s completely predictable. See you in 2024-2025 to brag about how rich I am xoxo
However, I had no idea that the macro environment would change in the way that it did, and drag bitcoin and ethereum down with it.
My other prediction - that Ethereum is a better investment than bitcoin - has been remarkable; in previous cycles, ETHBTC has gone down in bear markets, and largely been an indicator of risk. But this hasn't happened this time! ETH has matched BTC.
This suggests that the next bull market will see ETHBTC rising fast and even Ethereum flipping Bitcoin as the largest cryptocurrency. I continue to believe that Ethereum will outperform Bitcoin. Hate on me all you want, I'm all in ETH. (Staking also earns a nice extra yield!)
Now, at the beginning of 2023, many people are saying 'this is not the bottom of the bear market'. They say that because the %drawdown from the top is less than previous cycles. They're holding out for lower prices to buy, claiming “we’re going lower”. I think this is dumb, because 1) the %drawdown is not a good indicator of pain/bottoms, because the top of the last cycle was so different; slower and protracted rather than a blow-off top. Using the 200WMA is a much better method. And 2) You can’t predict the exact bottom. It depends on factors outside your control, like interest rates, Putin’s temperament this month, or fraudulent crypto exchanges collapsing. Don't wait to buy; base long term trades off long term decisions, not long term trades off short term decisions. Otherwise you'll be sitting on the sidelines.
But even though you can’t predict an exact bottom or what’s going to happen in the short term - evidenced by bitcoin being above/below my original red line most of the time - you can tell what’s going to happen in the long term - evidenced by bitcoin following the *trend* of my line for 3 whole years! So, I'm all in on ETH, and predicting a 20x gain. As for when, it’s all macro-dependent; when will the fed pivot? How long will that last? Who knows. ETH will do very well during the next easing, that’s for sure, and it’s completely predictable. See you in 2024-2025 to brag about how rich I am xoxo
However, I think significant things have changed since I posted this idea, most notably the rise of Ethereum. The ETHBTC chart is the one to watch, as Ethereum is growing faster than bitcoin, and is set to overtake it.
I added some Ethereum in 2019, and converted a lot of my BTC to ETH when the ETHBTC chart crossed the 200SMA in Feb 2020, adding on subsequent retests, and now with the most recent 200SMA retest I'm 100% in Ethereum.
This is not just because ether's price growth has outpaced bitcoin's. It is clear to me that the development of the Ethereum blockchain has far outpaced bitcoin's, and will continue to do so. The Ethereum community is more open, flexible, constructive, and productive. And sadly bitcoin is still overrun with anti-government tinfoil hat libertarian extremists
There is space in this world for bitcoin and Ethereum to coexist peacefully, as their purposes are slightly different. But I'd much rather be investing in something that's improving at a faster rate. My Eth price target is 15k-17k. I'm no longer confident that bitcoin will reach 250k.