This article aimed to explore the rallies in Bitcoin following the halving event the year prior. The idea is to find similarities and patterns between them to gain insights into 2021.
What was the distance of the first positive run?
Around 11 months
.08 - July 2010 -- June 10 26.42
What was the return?
330x
11 months after - peak
When Bitcoin first started it went on a a massive 330x return to subsequently crash down from 35$ to 2.54$.
The time frame was around 11 months, or just under a year.
July 2011 --> November 28, 2011
First Halving
After the first halving the price went from $12.27 to $1,000.39 - which was a return of 83x.
During this run, there were two dates with fast drastic price drops. In its entirety the run lasted 12 months.
November 28, 2011 - 365 days before the halving $2.54
November 28, 2012 --> Price at Having - $12.27
November 28, 2013 --> $1,000.39
Return
83x
Massive drops on run
March 6 and 11, 2013
Peak price: $49
Price decline: 33 percent
Early 2013 saw an extraordinary Bitcoin boom. By the beginning of March, Bitcoin prices were already double the 2012 high, and they rose another 50 percent over the next week. Then on March 6, the price collapsed, briefly falling to $34 before rising again to $45.
March 11 the price fell from $48 to $36.50 in a matter of minutes.
Once it became clear that the situation was under control, the currency rebounded to near its previous highs. These two crashes didn't have any noticeable impact on Bitcoin's upward price trajectory. Bitcoin prices would reach $60 on March 19 and end the month above $90.
April 10, 2013
Peak price: $266
Price decline: 61 percent
This decline left the currency's value where it started out the month prior. Ultimately the price continued to rise peaking at $1,000
November 28, 2013 --> $1,000.39
83x
83000%
The ratio of return for this run vs. second halving-
83/30 = 2.76
Second Halving
The second halving is the 2017 run that made bitcoin much more mainstream in the media and world wide awareness.
July 9th, 2015 --> 365 days before halving --->$269.68
July 9th, 2016 ---> $650 on day of second halving
July 9th, 2017 ---> 365 days after halving ---> $2,506
Peak 15th, December - $19,665
1 year after - 5x
From bottom to top the return was 30x.
The time frame was 17.3 months after the halving for the price to peak.
17.3 months - 30x
Third Halving -
The third halving during the Covid pandemic presented an interesting landscape for the value proposition of bitcoin as a store of value. The increases in price correlated with massive government stimulus and money printing.
365 days before - May 11 - 2019 Around $7,700
May 11 - 2020 - The price at the halving was $8,604
Taking the ratio of prior returns and assuming a linear decline in return based on size. From the halving price of $8,604 a return 15.58x would signify a price forecast to $134,050.
Price forecast -
$8,604 * 15.5
$ 134,050.32 - Price Forecast -
This price forecast is very similar to the JP Morgan price forecast of $146,000
Time Forecast -
Using the same logic forecasting out by a linear growth rate in the ratio of return, the price would dictate that the time from the bottom to the peak maybe farther out. I predict it similar to the 2017 run.
Time Forecasts From Bottom to Peak
11 months
12months - 1 months - 9% increase in time
17.3 months - 5.3 months - 30% increase in time
2021 --> ?