predicting the top: what can 2013 and 2017 tell us?

2021年5月10日

if predicting the top was easy, we'd all be really REALLY rich. like most things in life, i don't believe there's a magical formula or algorithm to make such a projection. but using all the information available to us will certainly help get us closer (and close is usually good enough to make a ton of money!).

in the case of BTC, i think there's a lot of valuable insight to be gleaned from studying the prior two parabolic advances (peaking in 2013 and 2017). this is rare (if not unprecedented) to have 3 massive parabolic runs like this in a single decade, so why not use it to our advantage?

what stands out to me most is that the 2017 run was far less potent than the 2013 run:

2013 top to top: 36.45x
2017 top to top: 16.9x (46.36% of 36.45x from 2013)

2013 bottom to top: 516.8x
2017 bottom to top: 129x (25% of 516.8x from 2013)

if the 2021 peak were to have a proportional drop off, we'd see:

2021 top to top: 7.83x (46.36% of 16.9x from 2017) ≈ $153,985
2021 bottom to top: 32.25x (25% of 129x from 2017) ≈ $100,685

100k - 150k is obviously far too wide a range to call a "top", but i think it gives us a realistic window to focus in on. and maybe even more importantly, it can give us the confidence to make better trades in the meantime if we have a better sense of where the market is heading.

as of now, i'm not even thinking about the top really. i'll start to consider it around 85k-ish where there should be clear drop off in margin buying pressure. around 100k (the dreaded psychological barrier) i'll start keeping a closer eye on technicals, but until then, i'm not wasting my time.

of course, the ETH narrative could always throw a wrench into BTC's projections, so i'll be watching that closely as well.