Bitcoin (BTC) hasn’t been doing all too hot as of late. The cryptocurrency is down by some 45% from its year-to-date peak of $14,000, sentiment has begun to flip widely bearish once again, and investors have begun to brace for Crypto Winter 2: Electric Boogaloo, as it were.
Yet, a price model created through machine learning is predicting that Bitcoin will begin to head higher in the coming months, and will hit around $15,000 by the time of May 2020’s block reward reduction.
This may sound crazy, especially considering the harrowing sentiment being tossed about right now (just look to Twitter for sub-$3,000 predictions), yet it isn’t impossible.
Bitcoin Price to Surge Into Halving?
In fact, as can be seen below, the model, which is based on analysis of Bitcoin’s stock to flow ratio multiple (S2F Multiple), shows that BTC will begin a fresh, much more mild uptrend to head into May 2020. Data Dater’s chart, in fact, implies that Bitcoin will rally by 25% to $10,000 by mid-November, hit a local peak at $11,500 by January, and then dip back down to $11,000.
Should the model play out 100% in full, Bitcoin will rally by some 90% from the current price of $8,000 to hit $15,500 by the approximate date of the halving in May 2020.
0/ Been working on a $btc price prediction model based on Stock-to-Flow analysis, using Machine Learning. for the past few days. Here's how the prediction looks going into the halving next May.
— (Stationary) Data Dater (@datadater) October 16, 2019
More information about the model can be found at this link (links to a Twitter thread), but the gist is that Data Dater used Bitcoin’s historical S2F Multiple metrics and fed them into a machine learning system to spit out expected price action.
Halving Won’t Catalyze Bull Run
So, what happens after the Bitcoin block reward reduction? Does this market rocket higher as cryptocurrencies seemingly did after previous halvings? Will prices crash as miners potentially capitulate?
Well, according to Jihan Wu, the co-founder of Bitcoin mining behemoth Bitmain, maybe not much. He said at a recent cryptocurrency mining summit that a Bitcoin bull run may not follow the halving next year.
His point can be backed up by a report from Strix Levithan, which found that if you delve into the nitty-gritty statistics, you can find that halvings don’t have a material and consistent effect on the markets of cryptocurrencies that have block reward reductions.
Wu’s point has come under tacit fire, however, namely by a price model pushed by the pseudonymous institutional quantitative analyst, “PlanB”. The analyst’s model, which shows that BTC’s fair valuation can be derived by looking at its inflation rate (effectively). Bitcoin’s implied fair price will be somewhere in the $50,000 to $100,000 range.
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