An objective look at past Bitcoin rallies and what we might expect now

I’ve been following Bitcoin since 2011. The current price rally feels very familiar. ‘Feel’ is not good enough for me, I want to be objective – look at historical trends, develop a hypothesis, and then allow the passage of time to determine its accuracy.

I am not a trader. I view it as gambling and I plan to keep my Bitcoin long term without regard for the price… a classic HODLer. I don’t get excited about fractals and prices, I get excited about BIPs.

Despite this I was curious to objectively look at previous rallies to see if there were any consistent trends, and then to speculate on what these trends would mean if they held true again, which I am not suggesting they will.

I decided to look at the peak of each rally, and then look for measurable points of reference on either side. I found I got useful information looking at the 1 and 2 month points before the peak, as well as a value 4 months after the high to see where the price had settled.

I’ll use the most conservative figures from each rally, and use the lowest recent price from the last month before the current rally began to make a projection – $437 on 19 May.

Here are the previous 3 big rallies:

8 Apr 2011 = $0.75
8 May 2011 = $3.87 (+420%)
8 Jun 2011 = $29.60 (1 mo: +660%) (2 mo: +3850%)
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8 Oct 2011 = $4.01 (+435% from start, -86% from high)

9 Feb 2013 = $23.65
9 Mar 2013 = $46.85 (+100%)
9 Apr 2013 = $230 (1 mo: +390%) (2 mo: +870%)
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9 Aug 2013 = $93.36 (+295% from start, -59% from high)

4 Oct 2013 = $121
4 Nov 2013 = $225 (+86%)
4 Dec 2013 = $1147 (1 mo: +410%) (2 mo: +848%)
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4 Apr 2014 = $449 (+271% from start, -61% from high)

Using the most conservative figure at each stage gives the following projection:

19 May 16 = $437
19 Jun 16 = $812 (+86%)
19 Jul 16 = $3979 (1 mo: +390%) (2 mo: +811%)
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19 Nov 16 = $1621 (+271% from start, -59% from high)

A lot has changed in the last few years. There is far more interest from China and a lot more liquidity in the markets, but humans are still humans. In the past we’ve gotten carried away by the rising price, created a bubble which then has then burst before the price settles again at a higher than starting level following a correction.

Those numbers look and feel really high now, but so did the previous rallies. I’ll be interested to see whether this pattern plays out again.

John Hardy
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John Hardy

Software developer living in UK.
Longtime Bitcoin advocate.
Email [email protected]
Donations welcome: 1H2zNWjxkaVeeE3yX6uVqng5Qoi6gGvYTE
John Hardy
Follow me

Author: John Hardy

Software developer living in UK. Longtime Bitcoin advocate. Email [email protected] Donations welcome: 1H2zNWjxkaVeeE3yX6uVqng5Qoi6gGvYTE