As Bitcoin goes through its fourth halving cycle, the #cryptocurrency market is once again filled with speculation. Famous crypto Analist predictions have stood out among the crowd thanks to his use of the Gann Square method, the November 28 Halving Cycles theory, and the 5.3 Diminishing Returns hypothesis.
Earlier today, Analist made a prediction through X (previously Twitter): "The Gann Square predicts either $89,000 or $135,000 for the Bitcoin top this cycle." He lauded Gann Square theory's success in the past, noting that it accurately predicted cycle peaks.
Do You Think Bitcoin Will Hit $135,000?
Using the "blue 21 fan as the fair value line and drawing the end at Nov 28th " the analyst claims that the Gann Square was able to accurately predict the peaks of cycles 1 and 3 at the fourth level. The second cycle, however, went in a different direction and ended up floating over the fifth level.
Analist pricing model from November 28th and his Trend Pattern price model both agree that the fourth cycle might end at $135,000, setting the stage for two possible scenarios. On the other hand, the $89,000 is consistent with the 5.3 theory of diminishing returns.
The use of past data further enriches this examination. In its first cycle, from 2010 to 2014, Bitcoin went from virtually nothing to a high of $1,177. The subsequent cycle, 2015–2018, started at $250 and ended at $20,000. This was an all-time high. From 2018-2022, Bitcoin rose from under $6,000 to an impressive $68,800, demonstrating its resiliency.
For more on this topic, check out #bitcoin 's Doom Signal Predicts a 50% Crypto Market Crash.
Exploring the nuances of the "Fan" Lines in the Gann Square sheds light on the situation. In the case of the blue "21 Fan" queue, the rate of price increase is twice as fast as the rate of time. Bitcoin's "fair value" has historically been seen to be around this line.
Only twice in Bitcoin's 13-year history has it ever dropped below the line: in late 2022, after the collapse of FTX, then the second largest crypto exchange, and in March 2020, during the Covid crash.
A market in equilibrium, with prices rising in step with time, is represented by the green "11 Fan" line. The theoretical foundation for the $135,000 prediction is the fact that Bitcoin's price peaked close to this line during the parabolic run-up in the second and third cycles.
Sub-$90,000 According to the Law of Increasing Costs?
CryptoCon elaborated on the $89,600 goal in a later post. As he put it, "$90k is slightly above the 5.3 diminishing returns theory." The theory predicts that the next cycle's high might be around $77,000 because Bitcoin's returns decrease by a factor of 5.3x from the bottom to the top of each cycle.
The returns from cycle tops to bottoms are not 5.3, CryptoCon said, after measuring them as carefully as possible on a daily time span. Five times, four times, and five and a half times."
While exploring this topic further, CryptoCon mentioned, "There is merit to the 5.3, as the average of these numbers is 5.31." But since this is merely an average, we have no way of knowing if these will be the actual profits.
He commented on the more realistic estimates while highlighting the potential peaks based on previous cycles. "The actual figures so far range from a low of $73,522 to a high of $81,675 with an average cycle top of $77,122," the authors write.
For Bitcoin to reach the much anticipated $100,000 threshold, CryptoCon noted that "$100,000 would mean a 3.84x diminish, implying Bitcoin would need to exhibit a drastically lower diminishing return rate this cycle."
His statement, "Bitcoin has consistently hit a Fibonacci extension level at each cycle top," drew widespread attention to the currency's correlation with the Fibonacci sequence. This would be off-target if the goal is $77,000. Fibonacci numbers of 58.763, 19.763, and 3.618 have all been used to describe the cycles in the past. The 1.618-level Fibonacci extension calculated from the body of weekly candles indicates a price of $104,000 for this cycle, which is a 3.7-fold drop from the previous one.
At its close, CryptoCon prompted attendees to speculate on whether or not exogenous forces like the green light for spot Bitcoin ETFs will give the required momentum to alter the status quo. "Many people think ETFs can shake up these projections and models. The average return has decreased to $5.31x ($77,122), but is this the high point for this cycle?
