An expert in market psychology has forecast a huge increase in the price of Bitcoin, but says investors will need to be patient.
Philip Swift, who’s led insight and strategy teams for global brands, says he uses on-chain metrics and price analysis to forecast when Bitcoin will reach new all time highs and roughly what that price will be.
Mr Swift expects the Bitcoin price will hit somewhere between US$92k and US$137k in October of 2023.
“This may seem a little far off for many Bitcoin investors who are desperately willing the price to go up,” Mr Swift told Micky.
“But it is important to remember that with each cycle Bitcoin becomes a much larger asset class and therefore it requires greater time and capital before it can reach new all-time highs,” Mr Swift said.
“In my opinion, this will be the case even with large institutions coming on board.”
The theory behind the Bitcoin price forecast
Mr Swift says the forecast was made analysing ‘Bitcoin Network Momentum,’ and the so-called ‘Top Cap’ model, which was developed by analyst Willy Woo.
“Pairing these together, it is possible to estimate the price and timing of the next Bitcoin all time high,” he said.
“Bitcoin Network Momentum is a highly effective way to understand the ‘health’ of the Bitcoin blockchain, which is a very useful starting point for any Bitcoin investor.
“It overlays daily BTC volume of on-chain transactions with the BTC price.”
Mr Swift says Willy Woo’s ‘Top Cap’ model takes the moving average price of Bitcoin since it began (the ‘forever’ moving average) and then multiplies it by 35.
“To date, it has consistently picked Bitcoin’s all-time high prices,” he said.
“This is the first forecast I am aware of that uses on-chain data alongside market price metrics to build a credible forecast of where price could be in the coming years.
“We should start to see more of this type of analysis as more traders and investors begin to realise the benefits of incorporating on-chain analysis into their strategies alongside traditional technical and fundamental analysis.”
Is the Bitcoin price forecast reliable?
Mr Swift says that it is very early in the Bitcoin price cycle to be forecasting the next high, and, as with any forecast, he will have to incorporate new information as it comes in.
“Bitcoin is still such an early-stage asset that there are a significant number of risks that could knock it off course, but if the cycles continue to play out as they have done over the past several years, then it is likely the next cycle high will be in the forecasted region,” he said.
Willy Woo agrees that forecasts this early are very hard to get right.
“Doing an estimate so early in the game is like trying to catch a ball and closing your eyes while it’s still flying upwards, but nevertheless fun to play with,” he tweeted.
Philip Swift uses on-chain volume cycles and my Top Cap model to estimate the next BTC ATH at $92k – $137k, Oct 2023.
Doing an estimate so early in the game is like trying to catch a ball and closing your eyes while it's still flying upwards, but nevertheless fun to play with. https://t.co/WpQyMjJwoE
— Willy Woo (@woonomic) March 4, 2019