Bitcoin Price Forecast – Part 2
Exclusive Cycle Analysis with NEW Charts!
Disclaimer: While I do give a price prediction, it is important to note that predicting future prices accurately is inherently uncertain, I can in no way guarantee the accuracy or reliability of this forecast.
The clear cyclical pattern of bitcoin is indisputable, and the insights provided by on-chain data are highly valuable. In last week’s newsletter, we discussed current market conditions. We talked about global liquidity and on-chain supply & demand levels. One of the things we concluded was that demand levels in this phase of the cycle are low, which is reflected in price. In case you missed it, you can 👉 read it here before we continue.
Bitcoin’s halving cycle is truly fascinating. We’re only 323 days away from the next halving! I have shared many charts in the past where I align bitcoin’s cycles from the halving. There is a caveat, halvings are based on bitcoin’s block time that make the cycle slightly shift. Therefore, the further away we are from the halving, the less aligned the cycles become.
At this stage of the cycle, since we are 77% into the halving, it makes more sense to align them by looking at days until the halving, a simple but extremely powerful concept.
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To further enhance the cycle alignment we can utilize Realized Price, bitcoin’s average investor price. Realized Price is calculated by looking at all transactions on the blockchain with their corresponding purchase price. This fundamental on-chain indicator gives insight into the actual money invested in bitcoin. Since Realized Price is an average (of all money invested), it is less susceptible to price fluctuations and therefore an ideal candidate to align the bitcoin cycles. Let me explain.
In the chart below we align bitcoin’s cycles horizontally by their corresponding days until the halving. However, to compare the current cycle to the previous cycle’s percentage gains, the cycles also need a vertical alignment, this is where Realized Price comes in. If we align them by Realized price we can see that each cycle’s Realized Price follows nearly the exact same path. Furthermore, this way also the bottoms seem to have a near-perfect alignment.
👆 Chart now live available at the Bitcoin Strategy Platform.
At this stage of the cycle, above chart is likely the best way to compare cycles.
Notice how we are currently in the middle of the 2019 (orange) and 2015 (yellow) cycle, 4 and 8 years back respectively. Neither did we get a bull market like we did in 2019 (where we actually saw a temporary increase in demand levels on-chain that we are currently not seeing), nor did we remain below realized price like we did in 2015. If we keep ranging between the two previous cycles we should reach a price of a little over 40k around the next halving.
We will now take this same chart a step further by looking at Short-Term Holder behavior.