Recently, the price of Bitcoin has continued to fluctuate, and people are paying more and more attention to its future trend, while different analysts and forecasting models have different opinions.
Veteran trader Peter Brandt pointed out in a forecast released on April 29 that Bitcoin may have reached the peak of the current bull cycle and predicted that Bitcoin may fall to more than $30,000 or even lower. This is contrary to many price models and forecasts in the market, which believe that Bitcoin may rise to a high of $210,000 before the bull run ends. Therefore, Peter Brandt's prediction has sparked debate in the market.
According to Peter Brandt's article, the theoretical condition he proposed is that Bitcoin's bull market cycle presents an "exponential decay" pattern, which is his conclusion drawn from his observations of Bitcoin's four bull market cycles.
In other words, when the high price of each successive cycle is only about 20% of the high price of the previous cycle, it meets the conditions of "exponential decay". Data shows that this has occurred in the past three Bitcoin market cycles.
- The scale in 2011-2013 is about 20% of that in 2009-2011
- The scale in 2015-2017 is about 20% of that in 2011-2013
- The scale in 2018-2021 is about 20% of that in 2015-2017
According to this decay rate, Brandt estimates that this round of bull market will only rise about 4.5 times from the low point, that is, to about $70,000. However, Brandt is not very sure about his theory, and he believes that there is only a 25% chance that Bitcoin has peaked.
Assuming Bitcoin has indeed peaked, Peter Brandt believes that prices could fall back to around $30,000, comparable to the 2021 lows. However, from a technical analysis perspective, such a sharp drop could be the most favorable development for the long-term market.
Based on long term power law behavior, Brandt's theory is completely wrong?
In response to Brandt’s prediction, Giovanni Santostasi, CEO and research director at Quantonomy, proposed an alternative theory based on the exact opposite long-term power law behavior.
Santostasi believes that Brandt’s theory only uses three historical data points, and it is necessary to subtract the one before the halving because Brandt’s analysis includes the bubble four years after the birth of Bitcoin, that is, before the first halving. Santostasi believes that this bubble behaves irregularly and should be excluded in the analysis, and only focus on the period related to the halving.
The remaining two data are not enough for reliable statistical analysis. Santostasi calculated the percentage of Bitcoin's historical highs that deviate from the long-term power law trend and derived another exponential decay model. Based on this model, he predicts that this round of bull market may peak around 2025, with a maximum price of about $210,000, and then may fall back to around $83,000. Santostasi's analysis takes into account a variety of data, including the power law trend of Bitcoin prices, the four-year halving cycle, and the exponential decay of historical highs.
In addition to the above two experts, other experts have made predictions about the peak of this round of Bitcoin bull market:
- Swyftx analyst Pav Hundal believes that by the next halving in 2028, the price of Bitcoin will at least double to around $120,000.
- Laurent Benayoun, CEO of Acheron Trading and expert in quantitative trading strategies, predicts that the peak of this bull market may be around $180,000.
- Fidelity Digital Assets adjusted its medium-term outlook for Bitcoin from "positive" to "neutral" on April 22, revealing the view that Bitcoin is "no longer cheap" in the medium term.
In summary, there are many different opinions on when Bitcoin will peak and how high it can rise. However, most people still believe that Bitcoin is still some distance away from its peak, and around $70,000 may not be the end of the bull market.
