Bitcoin Long Term Price Analysis – February 2019

in #bitcoin5 years ago (edited)

Intro

This is a simple analysis on BTC price using more than five years data. A simple trendline is extrapolated from the data. Most importantly the dependency on time on BTC price is determined, allowing us to set a statistical probability on things happening ahead.

01.png

I’m doing this long-term price analysis, so I can manage expectations and not get distracted by these everyday speculations.

First let’s see how did the last month went in terms of BTC price.

BTC Price Performance – February 2019

Here is the graph of the Bitcoin price in February 2019.

02.png

The price of Bitcoin was slowly creeping up in February.

Bitcoin entered the month with value of around 3.400$. In the first couple of days of February, there was almost no movement. Then around 10th of February the price jumped to 3.600 level. It continued around this level and then there was another jump to 3.800 and just a few day later 21 of February BTC crossed the 4.000$ mark. This was short lived and BTC dropped finishing the month with around 3.800$ value.

Bitcoin Historical Prices

Below is a chart with a data on BTC prices from 01.11.2013 to 28.02.2019.
The data is gathered from coinmarketcap.com

The data is imported to excel, formatted and a chart is formed from it.

03.png

Most of the people in the crypto community are well aware of this chart. We can see that we are now at the level of BTC prices that were in June 2017. BTC has failed to recover after the incarcerable bull run in 2017, when it finished the year with almost 20k. All of the 2018 was a bear year for BTC with prices going down all year. In the first two months of 2019 we have seen a small increase in the price with a shy effort for recovering.

The overall trendline is still up. The dotted line.

One of the values that represent the accuracy of the model is R-Squared (Coefficient of determination). R squared", is the proportion of the variance in the dependent variable that is predictable from the independent variable(s).

In the model above the R Squared value is 0,47. Meaning that, the time as variable, have 47% impact of the final output, the Bitcoin price in our case. This is right on the edge. Bitcoin is still pretty much unpredictable, with the time as variable determine only around 50% of its value.

Price Forecast

Just to make it clear.

I do not provide personal investment advice and I am not a qualified licensed investment advisor.


This is simple statistics.

Below is a graph generated using the simple excel function forecast sheet.

04.png

The upper and lower doted lines are the possible lows and highs and the middle thick doted line is the statistical average.

Immediately it can be noticed the wide range of future possibilities. The upper and lower doted line. This is due to the low R squared value discussed above. Or to put it in simple terms the extremely volatile past of the BTC price. BTC has been highly unstable. This instability is not god for anyone. A nice and stable year in BTC price will do a nice favor to everyone.

In fact, according to the chart, there is probability for BTC to go to zero in just a few months, let’s say 3 to 4 months. This sound terrible and highly unlikely, but from pure statistic side that is a probability.
There is a probability for a massive bull run as well. I would prefer calm waters for a change.

On average BTC is finishing 2019 with around 4.000$ value. Just a notice on this, in statistics averages are almost always wrong since they are cumulative values from the ups and downs 😊.

All the best.
@dalz


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