Every year i post an outlook using entropic methods explained in the technical section of this blog. Here you can find the 2015, 2016, 2017, 2018, 2019, 2020, 2021, 2022 and 2023 forecast update, where you can find more information about this approach.
Updated values for bitcoin (in brackets values of 2023) using daily data since August 2010 (from now on I will use only BITSTAMP data, as today there are not many differences between major Bitcoin exchanges.).
| BTC/USD | |
| Growth Factor G | 1.00099 (1.00090 ) |
| Shannon Probability P (see this as entropy) | 0.52237 (0.5214 ) |
| Root mean square RMS (see this as volatility) | 0.0471 (0.049) |
The entropy values of Bitcoin versus the USD have experienced a slight improvement in 2023. The Growth Factor (G) has marginally risen to 1.00099% compounded daily or 144% per year, surpassing the 139% observed one year ago. The optimal fraction of your total wealth to invest in Bitcoin has also slightly elevated to 4.5% (~0.52237*2=1.04475 – 1 = 0.04475 or ~4.5%), a figure that can still be rounded to 5%, similar to last year’s recommendation.
The volatility of Bitcoin has not exhibited an increase this year, considering the average value since the inception of its historical series in August 2010. Currently, it maintains a stable position at a relatively high value when compared to other assets such as gold, stocks, bonds, and forex currencies.
It seems that a volatility plateau has been identified, and it is notably substantial higher compared to other assets. This suggests that Bitcoin continues to be a highly speculative asset. In the year 2023, the growth factor of BTCUSD still outperforms traditional markets significantly, except for the Shannon Probability, which aligns closely with that of the US stock market (around 0.52). This implies that, on average, out of 100 days, an asset rises for 52 days and declines for 48 days.
| 2024 Price forecast | Full Historical Volatility | Half Historical Volatility |
| Forecast using only G* or Growth Factor | ~61,400$ | ~61,400$ |
| Upper bound adding volatility | ~151,000$ | ~96,000$ |
| Lower bound subtracting volatility | ~24,900$ | ~39,000$ |
*61400 is obtained with 1st January as a starting price (around 42650$) times (1.00099^365)=~1.44 | 42650*1.44=~61400$, just change 365 with the number of days you prefer for a different forecast.
What happened in 2023?
A year ago, I predicted an upper boundary of $58,000 using full volatility and about $36,500 using half of historical volatility, these two targets were calculated based on the opening price on January 1, 2023, which was around $16,500. The calculated support levels were $9,100 and $14,500.
The year has proven positive, surpassing the initial calculated resistance level of $36,500, which coincided with the monthly KAMA average. This signals a notable strength in the uptrend, with BTCUSD transitioning from a position of weakness to one of strength by rising above the monthly average.
Conclusions
For this year, it might be a smart move to also consider a lower value for volatility, let’s say 25% of the historical volatility, as I don’t expect a new all-time high but rather a consolidation phase a few months before, during, and after the halving. Therefore, determining a resistance level at around $77,000, calculated with a precise 1/4 of historical volatility—a method I don’t typically employ but find plausible for this year. This is due to my belief that it might be challenging for the volatility to remain high for a significant amount of time, making it less likely for BTC to surpass this $77,000 level.
I might consider taking profit if the market shows signs of weakness around this level. I remind you guys that I had opened a bullish position in February 2023 at approximately $22,500.
Furthermore, I have cautious long-term trading recommendations for you this year. The hype surrounding ETFs might culminate in a “sell on news” scenario on the day the ETF gets approved. There’s a possibility of subsequent gradual declines in Bitcoin prices toward calculated support levels for the next year, ranging between $24,000 and $39,000. Don’t forget that the most probable support area is around the monthly Kama, which is inside the support windows for this year ($24,900-$39,000).
Instead of anticipating any catastrophic scenarios this year, in contrast to the previous year, which appeared more susceptible to bearish scenarios, I maintain my view of the $24,900 support as very solid.
About the upper bound i’ve to admit that it is very unlikely to reach and/or break $151,000 during 2024.
I’m at your disposal for any questions; see you at the next update and Happy New Year!
Charts
I’ve added the equilibrium point computed using the G growth factor at $61,400.
The chart is monthly and begins at the end of November ’22 bottom.
Bitcoin Trading Ideas, Analysis 
Thank you 🙏 What is your opinion on altcoins?
all dead to me, i stopped checking also my old enemy: eth:)
Happy New Year. All the best for you and your family.
You mentioned in your earlier blog post that Bitcoin cycles usually last about 38-40 months. Based on this, the next Bitcoin cycle should end around May to September 2024, and we might see a new ATH then.
But in this blog post, you said you don’t expect a new record high for Bitcoin this year. Could you explain your thoughts on when this Bitcoin cycle will peak and when we might see a new all-time high? What is your strategic picture for timing in this Bitcoin cycle?
Thanks.
HI Artem,
The issue is that the cycle isn’t always symmetric in duration otherwise would be very easy to time this market. Historically, it ranged from a minimum of 30 months to a maximum of 50 months. If we assume a longer cycle, we could end up with a new ATH for Bitcoin well into 2025. Strategically, I remain bullish, but if I observe weakness at the first resistance this year (computed using a modest value for volatility), I’ll sell, as mentioned in the post. I prefer to stay on the safe side.
Hi, hope you are well. Do you have quick thoughts about current market development? Is market strong or weak after ETF approval, what is key resistance and support levels short term and mid term? Thanks
Hi, please comment something about recent market development. Your thoughts is very important for us, thanks!
Some consolidation before going up to 81000 is pretty normal IMO. Bull market is not over yet.
Thanks for the updates, hope you’re doing well. Do you consider this weakness? Looks a bit like a H&S pattern around the level you described
I think support is at 50,000. In fact the first upside target at 61,000 has been reached and surpassed. Next upside target is 81,000. Bull market is not over yet IMO.
Hello, when a new forecast for 2025? 🙂
As usual in first days of january 2025. So far so good btw.
Still in bull mode? I think we will see 54k before going up again. But I’m better at holding than trading anyway.
Hi! Hope all is well. Any thoughts as price is below 60k.
Hi, support at 56000, next stop 81000
81000 touched …
Hi. I am using your Bitcoin Price Model v1.3 but it seems the top band is stuck on the same level since the halving. Have you updated the model recently and if you did, could you provide the source code? Thanks.
Hi,
Do you have anything to add/update now since the 81k resistance was so easely broken (not according to my expectations). Also do you think the recent spike in Volatility should:
As always your thoughts are highly valued. As for myself: I have partially taken profit at 81k USD
It is stuck because the input data series i use is no more updated by tradingview, unfortunately all those price models are dead. Sorry. PS You can try to recreate the model using glassnode website.
Now that the 81k resistance has been broken more easily than expected, I’d suggest a few updates. At this point, the new support level is 70k USD, with resistance around 100k USD. The monthly chart still looks bullish overall, but there’s a chance the trend could take a pause if it doesn’t manage to break through the 95k-100k USD range.
Regarding volatility, while political events have certainly influenced the recent spike, I don’t recommend factoring this news into the choice of full or half historical volatility levels. If I remember correctly, the full volatility resistance level (150k USD) should not be broken this year. With 45 days left until year-end, I don’t expect to see the market above 150k USD.
Bye