Tag: cryptocurrency

Long Term Update: 2026 Outlook with entropic methods

On By CryptoAdvisorIn Long Term Trading4 Comments

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, 2024 and 2025 forecast update, where you can find more information about this approach.

Updated values for bitcoin (in brackets values of 2025) 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 1.00094 (1.00099 )
Shannon Probability P (see this as entropy) 0.5217 (0.5295 )
Root mean square RMS (see this as volatility) 0.045 (0.047)

The entropy levels of Bitcoin against the USD showed no improvement in 2025. The Growth Factor (G) dropped a bit to 1.00094% daily compounded, equivalent to about 41% annually. The optimal portion of your total wealth to allocate to Bitcoin is now 4.3% (~0.5217*2=1.0434 – 1 = 0.0434 or ~4%) and it went down a bit due to a flat year.

“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 0.52 suggests that, out of 100 days, Bitcoin is likely to show an upward movement on 52 days, and either a decline or no significant movement on the remaining 48 days.”

Bitcoin’s historical volatility dropped slightly this year, the only positive development amid otherwise challenging data, and aligns with expectations for a maturing asset in terms of capitalization. However, as noted in updates over the past two years, the pace of decline has slowed considerably, and volatility remains substantially higher than that of other assets, underscoring Bitcoin’s persistent nature as a highly speculative investment.

 
 2026 Price forecast  Full Historical Volatility  Half Historical Volatility
Forecast using only G* or Growth Factor ~124,000$ ~124,000$
Upper bound adding volatility ~292,000$ ~190,500$
Lower bound subtracting volatility ~52,700$ ~80,800$

*124,100 $ is obtained with 1st January as a starting price (around 87890$) times (1.00094^365)=~1.41   |  87890*1.41=~124000$, just change 365 with the number of days you prefer for a different forecast.

What happened in 2025? 

In this 2025 this market went up but failed to break through the equilibrium point that I calculate every year in January, which was set at around $132,000. The market corrected down to the annual support calculated with half historical volatility at about $85,000. As shown for those who follow me on Twitter, there were also weekly supports from my deviation bands at around $83,000. Considering that the updated forecast for 2026 still includes $80,800 as support, the area between 80 and 90 thousand dollars remains an interesting support zone.

I was hoping for something better this year, at least a quick visit above $132,000, but that didn’t happen. For this year, the directional bias remains unclear, though key levels are well-defined., but the support zone at around $53,000 remains very interesting, it’s both the last level of this year’s forecast and also a support from my monthly deviation bands calculated from the KAMA average. I refer you to my latest post on Twitter.

Conclusions

After holding my long position for nearly three years, initiated in February 2023 at approximately $22,500, this is a good moment to reassess the risk/reward profile at current levels.

The 2025 data tells a nuanced story, while Bitcoin delivered positive returns, the entropic indicators showed marginal deterioration. The Growth Factor declined and Shannon Probability dropped , these aren’t alarm signals, but they suggest that the statistical edge has weakened a bit compared to when I entered the position.

At current prices around $88,000, I’m sitting on roughly 290% gains. My approach for 2026 is conditional.

If $80,000 breaks down decisively, I will take profits. This level represents both the lower bound of my half-volatility forecast and a psychologically significant threshold. Even at $80k, I’d be locking in approximately 255% gains, a reasonable exit after a historically strong run.

My reentry target would be the $50,000–55,000 zone. This area aligns with both the full-volatility lower bound at $52,700 and my monthly KAMA deviation bands. 

On the other hand, if $132,000 breaks to the upside, I will hold and reassess at the upper bound levels. This is not a bearish call, it’s risk management after a successful multi-year trade. The data doesn’t justify aggressive positioning in either direction at these levels.

Feel free to reach out with any questions, and I’ll see you in the next update. Happy New Year!

Charts

Bitcoin’s cumulative volatility follows a compelling logarithmic decay curve, at the current trajectory, convergence with typical US equity volatility levels is still 15 to 20 years out. A reminder that, as an asset class, Bitcoin remains in its infancy.
Projected levels for 2026
Here’s what happened in 2025, where the market failed to move above the equilibrium point calculated using only the Growth Factor (G).

Long Term Update: 2025 Outlook with entropic methods

On By CryptoAdvisorIn Long Term Trading18 Comments

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’s cumulative volatility as expected is dropping every year and is stabilizing towards a value that is still a bit high compared to other traditional assets (stocks, gold, bonds range from 0.01 to 0.03) but the very high average returns of btc compensate the high volatility. The values represent the root mean square of logarithmic returns of bitcoin daily data.
Projected levels for 2025
Here’s what happened in 2024, where the market spent a lot of time around the equilibrium point calculated using only the Growth Factor (G).

Long Term Update: 2024 Outlook with entropic methods

On By CryptoAdvisorIn Long Term Trading19 Comments

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

Bitcoin’s cumulative volatility as expected is dropping every year and is stabilizing towards a value that is still a bit high compared to other traditional assets (stocks, gold, bonds range from 0.01 to 0.03) but the very high average returns of btc compensate the high volatility. The values represent the root mean square of logarithmic returns of bitcoin daily data.
The first lower monthly kama average price band will probably slowly reach the $25,000 support level during the 2023.
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.

Long Term Update

On By CryptoAdvisorIn Short Term Trading2 Comments

BTCUSD Monthly Chart KAMA Average 5 periods and deviation lines.

Since the last update on February 13 there are not many new developments. The monthly KAMA average is flat, which allows us to calculate fairly reliable levels of support and resistance. As you can see nothing interesting happened with the BTCUSD cross that remains inside the supports and resistance levels (yellow lines).

I have added a new indicator that calculates supports and resistances using as a starting point the close of the previous month (with the idea to forecast next month support/resistance levels), in this case the close of February at about $ 10300. I have used the last 50 months, just over 4 years from the bear market’s lowest point in 2015, to calculate volatility.

The drop we have seen in recent days has reached an intermediate level, -1.5 standard deviations, so I can say that there has not been a level of extreme volatility but not even normal.

My opinion is that the bitcoin will continue to remain for most of the year within the levels calculated with the KAMA (yellow) and therefore remains a good opportunity to buy the price area from 4000 to 5500 dollars, while it is to be evaluated a reduction of any bullish position should the BTCUSD go above 25 thousand dollars.

I also give you some short term indications for the next days, the first resistance is $9500, you might see a Top not exceeding $9500 before the BTCUSD resumes its descent. A break above $10000 would mean that at least in the short term the bearish trend is over.

 

ITA Version here

Weekly Range Update

On By CryptoAdvisorIn Short Term Trading1 Comment

XBTUSD dailychart
XBTUSD dailychart

XBT/USD weekly price range is 6500$-7600$ | The resistance zone ranges from $7600 to $8700 and is defined by the two deviation lines furthest from the VWAP.

I think it’s time for a correction to the first support located at $6500, the buying area for this week is from $6500 down to $5400. I think it is very difficult to reach $5400, a minimum at $6500 is much more likely and would not compromise the possibility to see a new ATH this week.

As explained many times in the past, it is important to look at where bottoms and tops are located to understand in which direction is headed our cross XBTUSD , given the great strength of the last two weeks it would be more consistent to have a minimum at $6500 rather then $5400.

To conclude the first level to observe is $6500, the next $5400 and without unexpected negative news it’s very unlikely this week to test the VWAP at $4350.

In the event of an unexpected catastrophic news, the support area on the weekly chart is updated to 2250-2875 USD.

Since many people asked me more details about these extreme price levels, I want to spend few words on how the support area is calculated in case of a strong drop due to unexpected negative news. I use the last 52 weeks to calculate bitcoin volatility and starting from the closing price of the previous week I project two support values using 6 and 7.5 times the initial value of the calculated volatility. In the past I have explained the concept of the “six sigma”, which concerns the construction quality in industrial processes and I have applied it in this field to calculate support levels and resistance levels which are practically inviolable and which obviously only apply for the current week.
A value of six times is used, with an extra tolerance of 1.5, to arrive at a maximum deviation that uses 7.5 times the initial volatility.

ITA Version here.

Weekly Range Update: Over 4300$

On By CryptoAdvisorIn Short Term Trading, weekly range update1 Comment

XBTUSD dailychart
XBTUSD dailychart

XBT/USD weekly price range at 4300$-4800$ | There is an unusual situation this week, the 2-month VWAP average is flat since the bottom of 15 September, therefore neutral trend for the short term. However, the market has surpassed the resistance value I mentioned last week, at $4300, this is a positive note.

To bring the short-term trend back to the upside we need to stay above $4300 at least for the whole week. The resistances shown in the graph range from 4800 to 5250 dollars.

In the previous update I had suggested to my readers a short term long operation from about 3600$, who followed this “trading idea” will surely have had a decent profit, I invite you all to keep this operation open as long as the XBTUSD cross will remain above $4300, below this level I suggest to close the position.

The RSI, as I said last week, has already given a sign of purchase that is now confirmed by its average which is on the rise, however we have not yet entered the overbought area leaving margin for a possible rise up to $4800.

In the event of an unexpected catastrophic news, the support area on the weekly chart rises to 2100-2600 USD.

ITA version here.

Short Tem Update: KAMA Levels

On By CryptoAdvisorIn Short Term Trading, weekly range update

KAMA Levels
KAMA Levels

XBT/USD weekly price range at 4000$-4950$ | The price range for this week is not very different from last week, we have seen until now a weak September with the price drop from the all time high of 5000$ and despite several negative news the XBTUSD has remained above 4000 dollars.
As you can see in the graph the support area using my KAMA indicator ranges from $3600 to $4000, the resistance zone from $4950 to $5350.
If the 4000$ support will work, then an upward cycle with a minimum target of 4950$ could start, otherwise the 2-month VWAP around 3400$ is an important support.
I think it’s unlikely to see bitcoin under the vwap at 2 months for this and also next week, otherwise it would mean that on the weekly chart a medium-long term correction has started; however it’s still early to say and let see if XBTUSD can stay above $4000 this week.

In case of a unexpected catastrophic news, the support area on the weekly chart is 2000-2500 USD

ITA Version here

Short Term Update: Entering Resistance Price Zone

On By CryptoAdvisorIn Short Term Trading

XBTUSD dailychart
XBTUSD dailychart

XBTUSD just break out above the resistance level i pointed out yesterday, This is a good news and we have avoided the slightly bearish scenario I had suggested yesterday. It’s crucial now to confirm the breakout avoiding to move below 4460$.

Yesterday i said also that usually the RSI doesn’t go below 50 during a strong uptrend and that’s exactly what happened, a rebound from the level of 50.

Now the resistance level for this week is updated to 5200$ or the third deviation line of the VWAP and i’m pretty sure that it’ll not reach the 4th deviation line at 5900$ as it never happened in all bitcoin history.

Weekly Range Update: BCC? We don’t care.

On By CryptoAdvisorIn Short Term Trading2 Comments

XBTUSD dailychart
XBTUSD dailychart

XBT / USD weekly price range at 2200$-3140$ | For this week the range is similar to the previous one because the 2 months VWAP average is basically flat. Last week I was expecting a breakout outside the congestion range with a new maximum or a test down to the VWAP  at 2440$, this latter possibility occurred.
As long as the price continues to remain above the VWAP at 2440$, the situation remains positive.

As for the other indicators I use in this template, you can see that the ALMA mov.average is still up and the RSI has almost tested the overbought zone at 70.

As for the tomorrow’s event I see it as the mere birth of a new altcoin, I do not expect a big impact on the XBTUSD cross price as it is not an unexpected news and has already been discounted by the market , it might have the effect to increase volatility but I don’t think that tomorrow will begin a bearish move due to this event.

In case of extreme fall, the support area is 1300$-1650$.

Follow me also on Twitter where I started to publish charts on both bitcoin and some of the most important altcoins using the TradingView.com platform
ITA version here

Weekly Range Update: new top ahead?

On By CryptoAdvisorIn Short Term Trading

XBTUSD dailychart
XBTUSD dailychart

XBT / USD weekly price range estimated at 2400$-3120$ | For this week the range in case of low volatility could be 2600$-2880$, in case of volatility above normal we could see a range of 2400$-3120$ thus implying a new all time high above 2900$.

As you can see in the chart, the price remain bounded between two deviation lines, the first and second; this week the XBTUSD cross should break one of the two levels by retesting the VWAP or making a new all time high between the third and fourth price deviation lines (3120$-3360$).
As i said in some of my earlier updates I still expect a maximum above 2900$ for this year, I still believe that it will happen.

As for the other indicators I use in this template, you can see that the ALMA average is back to bullish and the RSI has quickly tested the oversold area below the threshold of 30 during the 1800$ bottom and now it quickly returned above 50.

In case of extreme fall, the support area is  1250$-1600$.

Follow me also on Twitter where I started to publish graphics on both bitcoin and some of the most important altcoins using the TradingView.com platform
ITA Version here.

Weekly Range Update

On By CryptoAdvisorIn Short Term Trading, weekly range update1 Comment

XBTUSD dailychart
XBTUSD dailychart

XBT / USD weekly price range at 2100$-2900$ | The VWAP is just below 1700$ and the XBTUSD cross is always above it confirming mid-term bullishness.

I have told you many times that when a market is in a very strong position it can move between the first and second price deviation line except for rare cases where it can be between the second and the third line.
From a couple of days back it’s above the second price deviation line and I think that the current rally will continue pushing the bitcoin towards 2900$.

The average of the RSI oscillator is just below the overbought area and I think that bitcoin will ignore this indicator that may remain overbought for a certain period of time due to the fact that the dominant timeframe is the weekly one and as mentioned earlier I think this aspect can push bitcoin over the previous maximum of 2750$.

In case of extreme fall, the support area is 1050-1450 USD.

ITA version here.

Weekly Range Update: stronger then expected

On By CryptoAdvisorIn Short Term Trading, weekly range update3 Comments

xbtusd daily chart
xbtusd daily chart

XBT / USD weekly price range is 935$-1095$ |Last week the cross XBTUSD has been stronger than expected so for this week the resistance is raised to 1100$, the support remains the VWAP at 935$.
The ALMA average has turned upward with the break of the resistance at 1015$ while the oscillator RSI has given a sell signal last week that has been ignored by the market confirming the strength of the bitcoin-dollar cross. The RSI has however pulled away from the overbought zone but remained above the mid-point of 50, thus remaining in bullish territory.

In short, the market is strong and has ignored my bearish worries of seven days ago; regarding my long-term position opened since 2014 I’ll continue to maintain it until I see some serious bearish indications  on the weekly and monthly chart. I remind everyone that the average carrying price of my position is around 570$ (three units opened at 681$ , 615$ and 417$ ).

In cases of extreme fall the support area is updated to 650-760 US dollars.

ITA version here.