Analysis of Bitcoin (BTC) price action dating back to 2011 indicates that the coin’s price may next top out somewhere between $75K and $306K. A Kraken research showed a reading of the historical data showing a promising picture for BTC’s possible growth in 2021.
One reading of a logarithmic growth curve that links historical tops and bottoms indicates that a coin price of $75,000 would usher in BTC’s entry into the overbought territory, marking an end to its current bull run. The report says:
“Based on previous cycles, Bitcoin could likely continue appreciating gradually in price before ultimately going parabolic and hitting resistance, which will signal the end of its fourth bull market cycle.”
Looking at the historical price retracements, there appears some even stronger projections. All things remaining constant, if bitcoin were to continue along its current growth curve and then go into a retracement resembling its previous market crashes, the next bottom would be somewhere around $30,000.
Based on that proposed bottom one can try to make projections about the next market peak, subject to the extent of the retracement. If bitcoin goes on to retrace 70% in the current bull cycle, the coin needs to surge to a peak of $102,000 to hit the mentioned bottom of $30,000.
In the same context, a 90% crash may place the next peak at around $306,000, while an 86% drop, which is the average retracement of previous market cycles, would put the peak at about $221,000. Nonetheless, the report says that history would suggest that bitcoin remains ‘far and away’ from a market top.
Turning back to history once more, Q1 2021 seems to be the third-best performing quarter of BTC’s 12-year existence according to return percentages and annualized volatility. March has historically been a considerably bad month for Bitcoin and the general crypto market, according to Kraken’s research.
The price of the coin has appreciated just twice in this period since it started trading. Previously, March has underperformed February’s growth by 11%. Kraken also notes that bitcoin is now trending similarly to what happened in Q1 2013. That ranks as the most fruitful first quarter in bitcoin’s history.
A correlation of around 0.82 between the two quarters is an encouraging sign and may subvert the historic trend that seems to make bitcoin underperform in March.
Bitcoin has so far recorded five straight months of positive returns leading up to the time of publishing. That is a price action trend witnessed just once before in 2017 leading up to that year’s bull run and subsequent market peak.