Topic: Bitcoin's price based on Yearly Moving Averages (Read 104 times)
For what it's worth, thought I'd point out price is currently back at the 5 Year MA, now priced at $19,725. It's also the third time price has found support from this price/time level after re-testing this in June/July after the initial wick below when it was priced around $19K. This update isn't about providing some form of TA from this, just contextualising the current price in relation to time, that of being back at a 5 year average.
I'm surprised even the 6 year is so high as that. 3 years ago people were wringing their hands over an 'epic' spike to 13k and getting vertigo and yet the 6 year price says average 16k just seems funny to me that its been a bit distorted by those much higher recently printed prices.
I was also surprised to realise how high these MAs are, especially the 10 Year that's now nearly $10K. Last I checked two years ago when I was trying to factor in worst case scenarios, it was @ $2.5K. The reason they are so high now isn't just the recently higher prices, it's also time passing and price remaining above them. At least a combination of the price and time as I imagine you're aware.
I otherwise think if price got to $10K, and stayed there for a while, it would invalidate Bitcoin's arguably successful hedge against inflation over the past decade. If dollar cost averaging since $5 in 2012 got you a DCA average of $10K, and price is at $10K, I don't think it could realistically be called a good inflation hedge anymore, even if it would likely return to that status in the future. That's where the speculation would lie.
I'm surprised even the 6 year is so high as that. 3 years ago people were wringing their hands over an 'epic' spike to 13k and getting vertigo and yet the 6 year price says average 16k just seems funny to me that its been a bit distorted by those much higher recently printed prices.
Quite a popular view, TA is perhaps overstated but not used by the majority at all I think not on a personal level. Moving Average is just counting, at best we could say its statistical; TA is where people suppose to interpret a trend and it can go wrong from there because nothing is certain and every price can occur under duress of events we have no knowledge of yet.
Quote
Not a good fan of TA, it all BS to me
Quite a popular view, TA is perhaps overstated but not used by the majority at all I think not on a personal level. Moving Average is just counting, at best we could say its statistical; TA is where people suppose to interpret a trend and it can go wrong from there because nothing is certain and every price can occur under duress of events we have no knowledge of yet.
Quote
similar to Gold in the 80s
We had rates of 15% back then. History dont repeat it rhymes, my take is not TA but macro economics; volatility continues to trend upwards and many will think that bad for BTC as waves may sink a boat. I presume we loop on more recent history then the 80's which is Jurassic in comparison to factors in play now. Sadly Volcker is not here requiescat in pace, he was fairly unique we wont repeat imo 
I started in 2016, but as it wasn't really structured in a sense (fixed intervals) I suppose it's fair to say I only truly started in 2017 circa and always wondered if I'd be in loss or profit now (only let go once, end of 2020 so also around current prices). A bit painful to bear the pain right now, but I was fine in the time leading up to March 2020.
Think the only "problem" for DCA stalwarts is when to take (some) profit. A bad move could set back DCA by years. I couldn't do much about the timing of my partial liquidation though, was an unexpected emergency. Just wish it could have come maybe even 6 months later...
Think the only "problem" for DCA stalwarts is when to take (some) profit. A bad move could set back DCA by years. I couldn't do much about the timing of my partial liquidation though, was an unexpected emergency. Just wish it could have come maybe even 6 months later...
Not a good fan of TA, it all BS to me however it seems you have put some thoughts in it. It definitely took a lot of time for you therefor the merit.
I find it hard to believe the majority would of never sold any BTC. The minority who never sold any satoshis probably won't feel so inclined to do so after hodling for so many years, if they are still stacking sats that is, even if this is just theoretical.
It's not practical when the price went from 0 to $68k and you did not sell any when you had 1000 BTC. There are whales who sold some so that they can buy back again if they did not sell all. If I would be one of them then I would at least sell a good percent of my portfolio.
As of the week of June 27th 2022. Using the MA Ribbon (Simple Moving Average) on the Weekly time-frame with intervals of 52 candles, starting with 52 (1 Year).
1 Year: $42,845
2 Year: $36,488
3 Year: $27,229
4 Year: $21,896
5 Year: $19,099
6 Year: $16,104
7 Year: $13,860
8 Year: $12,168
9 Year: $10,869
10 Year: $9,787
The reason I post this is as many are expecting $14K, $12K, even $10K, so I wanted to contextualise this within the Yearly MAs. Historically the lowest Yearly MA price has reached was the 5 Year in March 2020 @ $4.3K, though price reversed in between the 5 & 6 Year MAs at $3.9K based on Index price. Notably this year we have reached the same average yearly price in between the 5 & 6 Year MAs @ $17.5K.
This effectively means anyone dollar cost averaging (properly) since the beginning of 2017 since $1K prices, without taking any profits, would have already reached break-even by now.
Another way to look at this would be the following:
This isn't to knock DCA at all, quite the opposite. This is more to reflect upon the amount of people who claim they wish they had invested in Bitcoin much earlier, rather than the past few years. The irony being that if price were to reach $16K, this would be the equivalent of 6 years of DCA, $14K nearly 7 years worth and $12K would be 8 years worth of DCA. $10K would be an entire decade's worth of DCA.
While I can see the reason for further capitulation down to these levels, as below $16K for 6 year long DCA investors who never took any profits, they would be sitting in a loss for the first time in many years. But subsequently, for others who wished they had dollar cost averaged into Bitcoin since 2014/2015, they would be presented the exact same price average if capitulation reached $12K to $14K.
To elaborate though, I think most who DCA'd from the past 6 years took some profits along the way, even if it was to re-invest at lower prices. I find it hard to believe the majority would of never sold any BTC. The minority who never sold any satoshis probably won't feel so inclined to do so after hodling for so many years, if they are still stacking sats that is, even if this is just theoretical.
Finally, if price does reach $10K, I genuinely do think there could be a decade long bear market, even multi-decade long, similar to Gold in the 80s. Not that this has to happen, but I see the strong possibility of it. As has nearly always been the case if a decade long bull market turns long-term bearish. But at the same time the 10 Year MA (or the 8 or 9) level could easily act as a bottom price before years worth of consolidation.
By comparison, looking at the Gold chart using Monthly MA Ribbon (SMA) with intervals of 12 (1 Year) starting with 12 (after it's decade long bull market and 25x increase):
This isn't intended to compare Gold to Bitcoin today, of really their prices in the past, as I think they are too dissimilar. But arguably comparing the de-pegging of the dollar to Gold in the 70s and the rally that occurred that decade to the creation of a mathematically regulated monetary policy such as Bitcoin a decade ago, could be something to consider here. That of "what happens after the bull market".
Personally I prefer the comparison of "how speculative markets generally move", and that if a decade-long bull market were to come to an end, it doesn't mean price will drop to $1K or $100, but simply that it could take many years for price to recover, and that $10K to $14K is a realistic low even if that were to happen. Again, not that this would happen, but only if this does happen. So far, that is yet to be seen, but for those who still believe in the long-term perspective of Bitcoin, it might require shifting perspective to a multi-decade time-frame, as opposed to single decade. Just my two satoshis on the matter.
1 Year: $42,845
2 Year: $36,488
3 Year: $27,229
4 Year: $21,896
5 Year: $19,099
6 Year: $16,104
7 Year: $13,860
8 Year: $12,168
9 Year: $10,869
10 Year: $9,787
The reason I post this is as many are expecting $14K, $12K, even $10K, so I wanted to contextualise this within the Yearly MAs. Historically the lowest Yearly MA price has reached was the 5 Year in March 2020 @ $4.3K, though price reversed in between the 5 & 6 Year MAs at $3.9K based on Index price. Notably this year we have reached the same average yearly price in between the 5 & 6 Year MAs @ $17.5K.
This effectively means anyone dollar cost averaging (properly) since the beginning of 2017 since $1K prices, without taking any profits, would have already reached break-even by now.
Another way to look at this would be the following:
- If price reaches $16.1K this would mean DCA since 2016 would be at break-even (6 years)
- If prices reaches $13.8K this would mean DCA since 2015 would be at break-even (7 years)
- If price reaches $12.1K this would mean DCA fsince 2014 would be at break-even (8 years)
- If price reaches $10.8K this would mean DCA since 2013 would be at break-even (9 years)
- If price reaches $9.7K this would mean DCA since 2012 would be at break-even (10 years)
This isn't to knock DCA at all, quite the opposite. This is more to reflect upon the amount of people who claim they wish they had invested in Bitcoin much earlier, rather than the past few years. The irony being that if price were to reach $16K, this would be the equivalent of 6 years of DCA, $14K nearly 7 years worth and $12K would be 8 years worth of DCA. $10K would be an entire decade's worth of DCA.
While I can see the reason for further capitulation down to these levels, as below $16K for 6 year long DCA investors who never took any profits, they would be sitting in a loss for the first time in many years. But subsequently, for others who wished they had dollar cost averaged into Bitcoin since 2014/2015, they would be presented the exact same price average if capitulation reached $12K to $14K.
To elaborate though, I think most who DCA'd from the past 6 years took some profits along the way, even if it was to re-invest at lower prices. I find it hard to believe the majority would of never sold any BTC. The minority who never sold any satoshis probably won't feel so inclined to do so after hodling for so many years, if they are still stacking sats that is, even if this is just theoretical.
Finally, if price does reach $10K, I genuinely do think there could be a decade long bear market, even multi-decade long, similar to Gold in the 80s. Not that this has to happen, but I see the strong possibility of it. As has nearly always been the case if a decade long bull market turns long-term bearish. But at the same time the 10 Year MA (or the 8 or 9) level could easily act as a bottom price before years worth of consolidation.
By comparison, looking at the Gold chart using Monthly MA Ribbon (SMA) with intervals of 12 (1 Year) starting with 12 (after it's decade long bull market and 25x increase):
- In 1976 price bottomed out at the 8 Year MA, followed by 2 years of consolidation before making a new ATH, increasing by 700% from the lows
- In 1982 price formed a bottom at the 9 Year MA, followed by two decades worth of consolidation before starting a new uptrend increasing by 500% from these lows
- In 1982 The 10 Year MA was around $285, which was the $4 higher than the low in 1985, even though in 1999 during the dotcom bubble price did make a new low of $250.
This isn't intended to compare Gold to Bitcoin today, of really their prices in the past, as I think they are too dissimilar. But arguably comparing the de-pegging of the dollar to Gold in the 70s and the rally that occurred that decade to the creation of a mathematically regulated monetary policy such as Bitcoin a decade ago, could be something to consider here. That of "what happens after the bull market".
Personally I prefer the comparison of "how speculative markets generally move", and that if a decade-long bull market were to come to an end, it doesn't mean price will drop to $1K or $100, but simply that it could take many years for price to recover, and that $10K to $14K is a realistic low even if that were to happen. Again, not that this would happen, but only if this does happen. So far, that is yet to be seen, but for those who still believe in the long-term perspective of Bitcoin, it might require shifting perspective to a multi-decade time-frame, as opposed to single decade. Just my two satoshis on the matter.
Jump to: