I’ve been anticipating previous Crypto winters and summers seasons. When Bitcoin enters a bull market, people are both bullish and panicked at the same time. This is particularly true for newcomers as compared to the rising value of Bitcoin to stocks. However, it cannot use the same scale.
Since I witnessed a halving of the bull market and the ICO market bubble in 2018. Every loop, in my experience, people think it’s a bubble or that it’s too big. But it’s not true, and I know it. If you understand it and look at the fundamental principles, you will notice that. This is why I do not change my target. I wrote a blog about why I believe the price in the previous bull market from 2017 to 2018 was not too high.
After the Bitcoin halving event in 2020, it has risen 227 percent from its previous all-time peak in 2018. One thing I must know is where the top for Bitcoin will be in this cycle, and this blog I publish the clue to how I’ve discovered a way to predict Bitcoin price.
A comparison to previous halvings
We are in the 48th week after the third halving in May 2020, and according to the previous data set I have, the price has increased by 530 percent.
At that time, the first halving price increased by 1648 percent in 48 weeks.
After a price reversal of -80.8 percent and -30.4 percent, the Bitcoin price increased by 531 percent over the next five weeks to hit its peak.
In 48 weeks, the price of the second halving increased by 353 percent. It experienced two price corrections of -36.4 percent and -32.5 percent, and over the next twenty-seven weeks, the Bitcoin price increased by 830 percent to hit its peak.
Third, with a price increase of 568 percent in 48 weeks, we had the largest price corrections of -31.2 percent and -36.3 percent. That figure is comparable to previous price corrections following the second halving in 2017. According to the previous scale, the top should be between 531 percent and 830 percent from now on.
Bitcoin lock in in DeFi
People must sell Bitcoin from the start in order to protect their profit or transfer value to other asset classes such as stocks or real estate. However, by this stage, we have created a method known as DeFi (Decentralized Finance). In this subject, I will only cover two of the most popular platforms.
The first is DEX (Decentralize Exchange), which allows people to exchange crypto currency for another crypto on a smart contract, and people earn by providing liquidity to exchange by locking in Bitcoin and other crypto currency on a smart contract. It is used by the DEX to make the platform liquid so that asset swaps can occur. Simultaneously, liquidity providers earn a percentage of swap fees.
Money market is another most use DeFi. It borrows against your own assets using Bitcoin as collateral. The amount of 92.78 Billion TVL locked in ETH & BSC Chain shown in the image below demonstrates the popularity of the DeFi products.
More buying power
The Stablecoin Supply Ratio (SSR) of BTC has been decreasing in 2021 as more stablecoins are minted. When SSR is strong, it shows that there is a large supply of stablecoins compared to BTC, indicating that there is more purchasing power ready to flow into BTC and other properties. We can see that the last time SSR dropped to this level, the Bitcoin price rose another next four month.
Predict the Top
From what I know, in the short term, This is not the top yet, we have just passed the huge price pullback on April 19th. It is one of the largest long liquidations in Bitcoin history. According to Glassnode data, 1.847 billion dollars were liquidated on three major exchanges: Binance, BitMEX, and OKex. Normally, after people are forced to sell their long positions, a huge buy back is more likely to occur, and this can be a price correction before Bitcoin enters the second phase of its bull run.
Image below show the time-frame correlation to the top price, give me a first estimate ranging from $413,271 to $601,391. The extended range between the lowest and highest prices of each halving period from the pre-halving price resulted in a 65,225 percent increase. The first halving price increased by 10,522 percent, resulting in a 6X difference, and the second halving price increased by 3,088 percent, pushing Bitcoin to the top. It has shrunk approximately 3.5X since the first halving, likely to result in a -1X contraction.
Calculated from April 19 to the next 27 weeks, the resistance from -1X contraction brought me the highest possible price is $1,350,000, which correlated with the resistance line from the highest price of each cycle from the first cycle in 2014 peak to the second cycle in 2018 peak to the third cycle -1X contraction price.
I assume that Bitcoin’s top for this period will be between $260,460 and $1,310,000.
However It is difficult to determine a specific price range at this time. The possibility of exceeding 26k is depending on factors that will happen in the future.
PS. This is not financial advice.