06.12.2021

Bitcoin price prediction for 2021: statistical models

Experienced cryptocurrency market players remember very well that the bitcoin rate can not only show a powerful upward movement, but also sharply drop quotations by tens of percent. A good example of this happened this month.

So, on April 14, the bitcoin price reached its all-time high at around $ 64,805. However, after that, a correction occurred, and by April 23, the value of the first cryptocurrency in terms of capitalization sank by more than 25%, dropping to $ 48,590.

In this regard, many market players want to know: has bitcoin reached its peak, getting close to $ 65,000, or are new highs awaiting us this year? We have collected and analyzed forecasts of leading experts on the growth prospects of the first cryptocurrency in 2021.

Dan Morehead: $ 115,000 in August

Dan Morehead, the head and founder of crypto investment company Panthera Capital, believes that the bitcoin rate will peak at $ 115,000 in August 2021. For the forecast, he used the popular long-term valuation model of BTC – Stock-to-Flow, which considers the ratio of stocks to growth, as well as an analysis of Bitcoin price movements after two previous halvings.

Recall that in May 2020, a halving took place on the Bitcoin network – a planned halving of the miners’ reward.

The essence of Stock-to-Flow is that in the long term, Bitcoin will grow due to the increasing scarcity of the number of coins. Since the BTC has a fixed issue, and the production rate is gradually decreasing, then, while the demand for the coin continues, its supply will decrease, and the price will rise.

After the previous two halvings in 2012 and 2016, the price of MTC increased several times. Extrapolating past performance for this year, Morehead believes the coin will surpass the $ 115,000 level during this bullish rally.

“This is getting ridiculous. A year ago, we predicted that Bitcoin would hit $ 62,968 this week. And so it happened. During this rally, BTC behaves EXACTLY the same as after previous halvings. It will probably reach $ 115,000 by August. We predicted this in our letter to investors in April 2020, ”Morehead wrote on Twitter.

Morehead adds that the current rally could be longer than the previous ones, and even with the current Bitcoin crash, we may well see a multi-year bull cycle. This is boosted by the increasing acceptance of BTC and cryptocurrencies: Coinbase listing, institutional investment, and cryptocurrency adoption by payment companies Visa, PayPal and MasterCard.

However, Morehead also highlights the risks that threaten the growth of bitcoin, the main of which is the strengthening of government regulation. He emphasizes that it could dampen the rally, but in any case, the authorities will not be able to completely ban Bitcoin.

At the same time, according to the Stock-to-Flow model, which was developed by an anonymous investor and analyst PlanB, by the end of the year BTC will cost from $ 100,000 to $ 288,000. However, Stock-to-Flow is often criticized for its mathematical unsubstantiation, large error and inattention to external factors. However, two years ago, PlanB predicted that within a year or two after the halving in May 2020, the price of BTC will rise above $ 55,000.

At the same time, judging by the Stock-to-Flow model, next year we will see a correction of Bitcoin to several tens of thousands of dollars per coin. But on the other hand, the next peak in 2025 can already bring over $ 1 million for military-technical cooperation.

“I think we will see $ 100,000 per coin by the end of the year. It’s just a matter of supply and demand, ”said Anthony Scaramucci, founder of the SkyBridge Capital crypto fund, in an interview.

Rekt Capital: up to $ 150,000- $ 170,000 in October

Technical analysts at Rekt Capital believe that Bitcoin will reach its price maximum this fall. They base their forecast on the analysis of the change in the price of the coin after the halving.

Consider the arguments of Rekt Capital analysts. They note that the price of bitcoin reached its then low 378 days before the first halving and its then high 364 days after it.

The next price low occurred 546 days before the second halving, and the high occurred 518 days after.

It turns out that in both cases, the bitcoin price reached a minimum and a maximum in about the same time before and after halving. Analysts at Rekt Capital believe that it is quite natural that this trend will continue after the third halving.

Thus, Bitcoin reached its local low 511 days before the third cut in the reward to miners. If the coin reaches a new peak about 511 days after the halving, then we will see the next BTC price maximum around the beginning of the fourth quarter of 2021, most likely in October.

Analysts at Rekt Capital confirm their calculations with their own theory of the four-year Bitcoin cycle. Its essence is simple – the bitcoin rate moves cyclically: one cycle takes 4 years – from halving to halving – and consists of 4 stages.

The four-year cycle suggests that the bitcoin price will go through an exponential rise in 2021 (candle # 1 in the chart above) and peak this fall, probably sometime in October.

According to Rekt Capital forecasts, the theory of four-year cycles predicts the price of bitcoin at $ 150,000 – $ 170,000. This will be followed by a bearish candle # 2, which historically tends to correct at an average rate of 84.5%. Candles # 3 and # 4 will be ascending.

Bobby Lee: $ 300,000 by the end of the year

Bobby Lee, founder of the BTCC cryptocurrency exchange, predicts in an interview with CNBC that Bitcoin could grow to $ 100,000 by the summer and to $ 300,000 by the end of the year. After that, the market will inevitably fall by 80-90% of any peak value that the coin reaches. According to Lee, the next crypto winter could last from two to three years.

Lee’s forecast is based on an analysis of the history of MTC trading:

“This is really a bull market year. Bull market cycles occur every three to four years, and 2021 is one such year, ”says Lee.

Bitcoin price peak of $ 200,000- $ 300,000 is also predicted by Ali Mizani Oskui, CEO of FiCAS AG. But he believes that this will happen by the end of December 2021 – March 2022. Mizani Oskui’s predictions are valuable because he was able to predict the 2017 and 2020 rallies.

Dion Guillaume: $ 400,000 by the end of the year

Bitcoin Magazine author Dionne Guillaume believes that Bitcoin will peak at $ 400,000 by the end of 2021.

He also bases his predictions on price cycles tied to Bitcoin halvings. So, Guillaume identifies four different stages in the history of bitcoin – each of them covers the period between halvings. When analyzing and comparing them, according to Guillaume, the same trends in price fluctuations are revealed. If they continue this year, then the first cryptocurrency may well peak at more than $ 400,000 by the end of 2021. After that, the market will face a deep fall, as investors will start taking profits en masse.

Bitcoin’s price maximum of $ 400,000 at the end of this year is also predicted by Bloomberg analysts. In the April report “Rising Bitcoin Adoption Tide”, experts noted that the pace of BTC adoption is accelerating dramatically. According to the report, the underlying support for the BTC rose to $ 50,000 and the coin is unlikely to drop below $ 40,000.

What will be the price of BTC according to popular valuation models?

Earlier, we have already considered the most popular models for assessing the value of the first cryptocurrency. Let’s see how some of them predict the peak of the BTC price within the current rally.

Bitcoin Rainbow Chart. According to this model, in the second half of the year, the price of MTC will exceed $ 100,000, after which it will begin to decline.

The NVT (Network Value to Transactions Ratio) ratio reflects the ratio of market capitalization to the volume of transactions on the network. The model was developed and promoted by the analyst Willie Wu. It does not predict the exact value of an asset, but it can help determine if it is overbought. According to Wu, by the end of 2021, MTC can reach $ 200,000- $ 300,000.

Long-term exponential (power) model by Harold Burger allows you to predict the direction of the price trend. Judging by the model, the current rally will last until the end of this year or until the spring of next year, with bitcoin surpassing the $ 100,000 mark.

The Hyperwave Theory, promoted by popular crypto trader Ton Weiss, is designed to predict BTC price peaks, after which an uptrend gives way to a downtrend. In December 2020, a trader predicted that the coin would reach a value of $ 300,000 by the end of this year.

The Mayor Multiple model is an indicator that measures the overbought or low of the market. If the coefficient is higher than one, bitcoin is in a bullish trend, if it is lower, it is in a bearish trend. On the day the article was published, the Mayer coefficient was 1.41. This means that the peak is still far away.

How much can the bitcoin rate fall?

Analysis of the bitcoin chart over the previous 12 years suggests that after reaching price highs within a bullish trend, bitcoin always loses much in value.

For example:

In 2011, the asset fell by 91%
In 2014 – by 85%
In 2018 – by 83%
In 2019 – by 50%

The mechanism of such a fall is simple. As the price of bitcoin rises, more and more investors start taking profits and selling the asset. Upon reaching the peak of the sale, the price of the coin collapses.

It is likely that many companies and investors who bought Bitcoin for tens and hundreds of millions of dollars in the past and this year will sell their assets as soon as BTC reaches a sufficiently high value. The same applies to miners who started accumulating their newly mined coins instead of selling them.

MicroStrategy alone owns over $ 5 billion worth of bitcoin. Although MicroStrategy says it plans to hold the asset for a century, it should be borne in mind that it is a public company, and shareholders, including BlackRock, Morgan Stanley and Vanguard, may demand to take profits. And such sales can severely disrupt the market.

However, crypto winter may not happen this time. Most experts believe that the drop will not be as significant as in previous times. For example, Bloomberg analysts, according to the above report, predict strong support at $ 40,000, and analyst Mike McGlone at $ 20,000. This is because the current market rally is different from previous ones and does not necessarily have to end in a sharp collapse.

Past rallies have been entirely speculative, so a market drop was inevitable. This time there is big capital, there is no hype among newbie investors far from the crypto world, large payment companies have added cryptocurrencies, bitcoin has begun to be perceived as a defensive asset and a hedge of risks. Of course, we will see more than once market correction by 10-50%, but it is not at all necessary that the military-technical cooperation will collapse several times.

Dan Held, director of business development at the Kraken crypto exchange, put it well on this matter:

“People are no longer speculating. People buy military-technical cooperation because they see its value. “

The head of Kraken believes that the coin could reach a price of $ 1 million in this bullish cycle.

In fact, of course, nobody knows exactly when the first cryptocurrency will peak in the current rally – this market is too unpredictable. Most importantly, Bitcoin will never devalue to zero. There are many more corrections and falls awaiting the coin, but in the long term it is doomed to grow.

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