If the price of BTC continues following in its own fractal footsteps, what can we expect in the coming months and years?
TL;DR — Happy New Year (Fig. 1, USD/BTC):
- 2019 ~= $4,000
- 2020 ~= $7,000
- 2021 ~= $16,000
- 2022 ~= $300,000
- 2023 ~= $110,000
Looking at Bitcoin’s most recent climb to its All Time High (ATH) and subsequent slide, it’s clear that the BTC price graph for the past year and a half has tantalizing similarities to the analogous 2013–2014 trend (Fig. 1). These patterns of exponential bull runs and subsequent slides occur throughout the trading history of BTC across all timescales; smaller versions of this waving pattern appear throughout the graphs.
Instances of this phenomenon in other markets and cryptocurrencies besides Bitcoin have been referred to as ‘hyper waves’ or ‘fractally repeating exponentially increasing Gartner Hype Cycles.’
Personally, I think the attributes of this pattern are encapsulated best in the name ‘fractal hype cycles,’ which I’ve used in the past and will use again here.
Self-similar fractal patterns are ubiquitous in mathematics and nature, e.g. in physics, chemistry, astronomy, biology, geology, etc. It’s quite literally as if fractals are baked right into space-time itself. As such, it should come as no surprise that fractal patterns show up time and again in markets and networks.
What I’ve done in Figure 1 is simply to duplicate the historical trading trend and overlay the largest fractal hype cycles from 2013–2014 and 2017–2018. Doing so allows a loose prediction of what will happen if Bitcoin price continues to follow this fractal hype cycle. Of course, Fig. 1 is not meant to be absolutely predictive of future BTC price but more of a general guideline.
Note that price data prior to 2013 is not included here, owing to speculative practices (and bots) at Mt. Gox.
Bitcoin is now 10 years old, and it took a few years for reliable pricing data to develop as its infrastructure grew. Zooming in on smaller time-frames, it’s evident that these fractal hype cycles are prevalent, i.e. “it’s turtles all the way down.”
What’s exciting now is that we’re starting to see the emergence of the first multi-year self-similar features. If the price of BTC continues following in its own fractal footsteps, here’s what we can expect (Fig. 1):
Closing out 2018, we will likely see prices fall further into the $4,000 range where it will see-saw for most of 2019, with very brief dips below $3,000. Coming into 2020, we should see a pronounced spike in buying volume that sets the stage for a tremendous multi-year bull run up to a 2022 ATH of $300,000 and subsequent 2023 slide down to $110,000.
Obviously, this is just a simple minded projection; if it doesn’t pan out, sorry, I promise to never write about the future price of Bitcoin again!