Putting the Recent BTC Run in Perspective

yabapmatt (71)in LeoFinance • 3 years ago

With the seemingly crazy run up in BTC prices over the past couple of months, it can be hard to resist the urge to sell some (for me at least) so I try to zoom out and put things into perspective which I find helps to solidify my conviction in hodling and even stacking more sats.

I thought I would take some time away from working on Splinterlands - we have so much really exciting stuff in the works for 2021 - and share my thoughts with all of you as well as take the opportunity to make my first post in the LeoFinance community, which is long overdue!

So here goes...

First of all, I should mention that I am not a trader by any means. I don't generally look at charts and I don't know the first thing about TA or any of that. This is just very simple, high-level perspective of where BTC might be headed based on what has happened over the past 7 or so years.

This is the chart of BTC over the past 3 years or so, from the previous cycle high at just under $20,000 until now:

Now, here is the chart from roughly the same period in the previous cycle, starting with the previous cycle high at around $1,000 in late 2013 and going up to May of 2017 - about 5 months past where we are now in the current cycle:

The takeaway here is that these charts are astoundingly similar. Like unbelievably similar. Despite seeing this many times, in many places, it's still hard for me to really believe that the price movement of bitcoin over these two separate 3-year periods is so strikingly similar, despite how very different those periods were for pretty much everything else in the world.

If I were going to bet on what would happen next - which I am, due to the fact that I am buying/hodling BTC - I would assume that the chart would continue to look similar to the one four years ago. So, let's zoom out the chart from the last cycle another 7-8 months to see what might be in store for us in 2021.

Keep in mind that what follows is the exact same chart as the one above, just including about 8 more months at the end:

Adding those extra 8 months makes the chart look totally different. That's because the price ran up so much that it makes everything on the previous chart look like a flat line.

Here's the same chart again but with my very complex annotations added:

The simple takeaway here is that if bitcoin price movements continue to even remotely follow what happened four years ago (as they have nearly perfectly for the past three years), then the price action over the next year should make the past three years look like a flat line.

Obviously, I can't take credit for this insight. LOTS of other people have been looking at the exact same thing for a long time and coming to the same conclusions. That's where many of the seemingly ridiculous price predictions are coming from.

But even though I hear it many times from many people much smarter than myself, I still like to look at it on my own every time I start to think about selling some BTC, or even when I think I don't want to buy any more because the price has run up too high.

I'll wrap this up with the obligatory warnings that things may turn out completely differently than I have prognosticated above and I am not a financial advisor nor is any of this financial advice. Everyone should do their own research, consult with an actual financial advisor, and don't invest what you can't afford to lose!

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