Bitcoin Peak Predictions Differ: From Exponential Decay to Power Law Models
Summary:
Renowned trader Peter Brandt suggests Bitcoin may have peaked this cycle at $70,000, based on an "exponential decay" pattern. However, others argue that the cryptocurrency is far from peaking — with predictions putting its high at around $210,000 by the end of the bull run. Differing views are resulting from various price models, including a long-term power law behavior model which disputes the statistical significance of Brandt's theory.
Veteran trader Peter Brandt has suggested that Bitcoin (BTC) may have already hit its peak in this current cycle, citing an "exponential decay" pattern. This suggests each successive peak is around 20% of the previous cycle’s peak gain. Using this model, Brandt hypothesizes a maximum level of $70,000 for this cycle, a figure Bitcoin reached in March. Despite this, Brandt only attributes a 25% likelihood to the scenario.
In contrast, various other price models offer a contrasting view, predicting Bitcoin isn’t close to its cycle peak and could see levels around $210,000 before the bull market ends. Research Director Giovanni Santostasi of Quantonomy rejects Brandt's exponential decay theory, casting doubt on its statistical significance due to the limited number of data points.
Santostasi favors a model based on long-term power law behavior, which considers the percentage deviation of price peaks from the long-term power trend, formulating a distinctive exponential decay pattern. Using this model, it predicts a fourth cycle peak of $210,000 around December 2025.
The model synthesizes the power law trend, four-year halving cycles, increasingly decaying peak heights, and other factors for Bitcoin price predictions. Expert predictions on Bitcoin's peak this cycle vary extensively: Swyftx lead analyst Pav Hundal predicts a doubling by the next halving in 2028, to around $120,000, while quantitative trading expert Laurent Benayoun expects a peak of $180,000.
Fidelity Digital Assets, meanwhile, stated on April 22 that Bitcoin was "no longer cheap". At the time of reporting, Bitcoin was currently trading at $62,528, a 15% decline from its all-time high in mid-March.
Published At
4/29/2024 9:05:50 AM
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