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, 2023 and 2024 forecast update, where you can find more information about this approach.
Updated values for bitcoin (in brackets values of 2024) 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 (1.00099 ) |
| Shannon Probability P (see this as entropy) | 0.5295 (0.5224 ) |
| Root mean square RMS (see this as volatility) | 0.047 (0.047) |
The entropy levels of Bitcoin against the USD showed no significant improvement in 2024. The Growth Factor (G) remained steady at 1.00099% daily compounded, equivalent to about 44% annually. The optimal portion of your total wealth to allocate to Bitcoin increased to 6% (~0.5295*2=1.0448 – 1 = 0.059 or ~6%), driven by a year-long upward trend in Bitcoin’s price, which boosted the Shannon Probability from 0.522 to nearly 0.53, an improvement, but still modest.
“For those who may have forgotten, the Shannon Probability measures the persistence of Bitcoin’s price movement, indicating the likelihood that the asset will experience a positive trend. A value of 0.53 suggests that, out of 100 days, Bitcoin is likely to show an upward movement on 53 days, and either a decline or no significant movement on the remaining 47 days.”
Bitcoin’s historical volatility has remained relatively unchanged this year, aligning with the average recorded since the inception of its historical data in August 2010. Currently, it remains stable at a comparatively high level, particularly when measured against traditional assets such as gold, stocks, bonds, and forex currencies, refer to the chart at the end of this post for more details.
As i said in my last year update 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 as its volatility is still too high to be considered a viable reserve asset for central banks, despite increasing recent discussions around its potential in this role.
| 2025 Price forecast | Full Historical Volatility | Half Historical Volatility |
| Forecast using only G* or Growth Factor | ~132,300$ | ~132,300$ |
| Upper bound adding volatility | ~328,000$ | ~209,300$ |
| Lower bound subtracting volatility | ~52,300$ | ~85,100$ |
*132,300$ is obtained with 1st January as a starting price (around 91900$) times (1.00099^365)=~1.44 | 91900*1.44=~132300$, just change 365 with the number of days you prefer for a different forecast.
What happened in 2024?
A year ago, I predicted an upper boundary of $151,000 using full historical volatility and approximately $96,000 using half of that volatility. These targets were calculated based on the opening price on January 1, 2024, which was around $44,000. The calculated support levels were $24,900 and $39,000.
The year turned out to be overwhelmingly positive, with Bitcoin surpassing the initial calculated resistance of $96,000. This reflects notable strength in the uptrend, as BTCUSD reached an all-time high of $108,300 in December. The most probable resistance level of $96,000 held true, as the year-end price stayed below it, which aligns with expectations.
Looking ahead to 2025, I will focus on levels calculated using reduced volatility (half the historical value) since this approach often yields more reliable results. This gives us a key support level at $85,000, which is highly significant. If Bitcoin spends too much time below $85,000 during 2025, it may signal the end of the uptrend that began from the $16,000 low in 2022.
In a bearish scenario, should it materialize, I would anticipate a potential low in the $50,000 range during 2025.
Conversely, if Bitcoin holds consistently above $85,000, the first major resistance to watch is around $210,000. This could mark the end of the current uptrend that started in 2022 and would represent a strong peak. Any value exceeding $210,000 should be considered a clear speculative bubble. I do not expect the upper limit of $328,000 to be breached throughout 2025.
Conclusions
For this year, I may consider taking profits on my position if the market shows signs of weakness below the critical $85,000 level. As a reminder, I initiated my bullish position in February 2023 at approximately $22,500.
I also recommend cautious long-term trading strategies this year. The growing speculation around Bitcoin as a potential reserve asset for central banks could lead to a spectacular market top. In that scenario, preliminary support levels for 2026, calculated using a starting price of $91,900 on January 1, 2024, and a two-year window, suggest potential declines between $54,000 and $100,000. If Bitcoin reaches a significant top, potentially at or above $200,000, these levels become plausible targets for a subsequent correction in 2026. These values are provided as a preview to illustrate possible directions, but only if such a dramatic peak occurs this year.
That said, I remain firmly confident in the $85,000 support level as a key indicator of the current uptrend’s strength. Regardless of the various scenarios discussed, keep this level in mind as your primary reference point.
As for the upper boundary, I believe it is highly improbable to reach or surpass $328,000 during 2025.
Feel free to reach out with any questions, and I’ll see you in the next update. Happy New Year!
Charts
Bitcoin Trading Ideas, Analysis 
Thank you, you’re really great! Happy New Year!
Thanks to you for following me, Happy New Year too!
Thanks, Happy New Year!
Hi!
Thank you for your yearly update. Interesting read as usual.
“As a reminder, I initiated my bullish position in February 2023 at approximately $22,500” – when did you sell your previous long term position? I remember you opened your position years ago and held it during several bitcoin cycles. I do remember you added to it, probably several times. But do not remember reading that you closed it at some point?
“I also recommend cautious long-term trading strategies this year. The growing speculation around Bitcoin as a potential reserve asset for central banks could lead to a spectacular market top.” – do you think next bear market will be different from previous ones? For example lasting longer?
Happy New Year to you! And stay in good health!
Hi,
I sold my previous position on June 22, 2021, at $28,997, after entering around $9,000. I re-entered in February 2023 at roughly $22,500.
I believe the 4-year Bitcoin cycle, driven by the halving, remains the dominant force behind bull and bear markets. While external factors like macroeconomic conditions or new narratives (e.g., Bitcoin as a reserve asset for central banks) can cause short-term deviations, the historical pattern suggests that a blow-off top is typically followed by a bear market of similar duration.
Therefore, unless there’s a structural shift in Bitcoin’s supply dynamics, I expect the duration of the bear market to be equal to or shorter than 20 months.
So you do not foresee longer than usual bear market after current cycle. I’m thinking that after several very strong bullish cycles we could have longer period of consolidation.
Hi, thank you for the annual update, and a happy new year! I’m reading your analysis since 2015, and I am holding since. I will sell partly this cycle, though 🙂
Thank you! I’m following your updates since 2015 and haven’t sold, though – this cycle I will, I think. All the best for 2025 to you.
Thank you I’m following your updates since 2015 and haven’t sold, though – this cycle I will, I think. All the best for 2025 to you.
Thanks for your great insight, seems like you were spot on as we dance around the 85k area for bitcoin. If we top here do you still think 50k would be the low? If similar to other bear markets it would be more likely in the low 30k region for a bottom.
Hi
The price is below 85K now – if we go below 85K on a weekly close, do you think the bull run top is in? thanks so much!
BTC is now at $80K, below the critical $85K threshold you’d mentioned. Is the bull market over? Is it going to $50K?
The price has dropped sharply below 85,000 and is currently at 79,000. It’s all over the news. Do you think the bullish trend is over?
Thanks for sharing your thoughts.
Things are looking pretty bearish to me, seems like that 50k area will be hit sooner than later.
Many thanks for your analysis, greatly appreciated, it put me on the right track!
But its looking bearish right now, don’t you think? Cycle analysis suggests we’re close to the top or we have even reached it. It would align with current indicators suggesting a bearish short-term outook like divergences on the weekly, negative momentum and the usual decline until October. Cherry on top if the price breaks the current trendline. Any plans or thoughts here?
Of course, this could all be 2021 again and we get surprised late October – or we might even top in Q4 2027 like some say, who knows? Just a heads-up, thanks again, cheers!
Thanks for your thoughts. This time looks different because it’s not said we’ll just get the usual 4-year bubble pattern again. The monthly KAMA is still trending, and it’s hard to say where or when it will stop. For now, it’s simply a matter of waiting until the situation actually changes, instead of assuming history will repeat in the same way
Interesting. I just checked the monthly and you’re right about KAMA, however my momentum oscillator is showing a big divergence of three lower highs (Mar’24, Jan’25, Jul’25) and is now close to entering negative territory. Not 100% sure ofc, because it will probably rally in October, but I’m very skeptical of price going parabolic with all these bearish signals. I’m fine taking profits even if it breaks to another ATH of say $135k.
Yes, it could be different this time, I think it was Adam Back that pointed out that the last cycle top was actually in Mar’24 before the halving. Also with incoming institutional activity, there might smarter players that are less emotional, so the bear could be slower with lower volatility. But I don’t want to wait until Q4’27 of ’28 to take profits. We’ll see how this plays out, all the best, cheers!
Hi and thank you so much for keeping your blog alive. I’ve been following it since 2015 and I really think it’s the best source of information on Bitcoin trading! How do you see the situation right now? It seems like there’s a big battle between the bulls and the bears, but it seems like a more bearish scenario is coming.