How to Make Bitcoin Price Predictions 2021 [Advice From Professional Trader]
As you have already noticed, cryptocurrency price prediction is a rather hot topic, but it is still very hard to tell what Bitcoin will be worth tomorrow. On the 27th of December, 2020 the price of Bitcoin hit the record and reached $28,288. Everyone wants to know what will happen to the most popular cryptocurrency seeing how unstable the market is at the moment.
Financial markets offer different asset price forecasting methods and the cryptocurrency market is not an exception.
So if you want to make a long-term Bitcoin price prediction 2025 and decide whether to hold assets or sell them, this article is definitely worth reading!
Below we are going to tell you about the best methods that will help you to make realistic Bitcoin predictions.
The statistical method is probably one of the most popular ways of making a Bitcoin price USD prediction.
A trader or programmed system gathers the maximum quantity of market data and structures it into certain arrays. With the help of a statistical component takes place the distribution of system parameters.
Having such data it’s possible to calculate mathematical models’ effectiveness.
Sounds like abracadabra?
Well, to put it simpler, parameter statistics are collected and the most profitable models are chosen.
These models are systemized according to specific features and form trading systems, which are then used by trading experts.
Such an approach helps them to make a Bitcoin forecast 2025 and to decide what to do with assets.
All methods of Bitcoin price prediction 2021 can be called systematic because all of them are based on a certain trading system.
However, we’d like to distinguish this one because the systematic prediction method includes not only a trading model but also a system of risk and money management.
This method of Bitcoin price prediction 2025 is the most convenient for manual traders. It consists of building certain trading models and position management. In other words, the overall trading situation also influences the decision. For example, when a trader uses blue triangle breakdowns.
At every breakdown, the trader opens a new position. But any decision on the position also depends on the size of the deposit, and the current market situation (bearish or bullish one).
Unlike the statistical Bitcoin price prediction 2021, where everything is well-calculated, the systematic prediction method takes into account the general image of a trading account, market, or cryptocurrency as a whole, and not only the realization of a trading model.
Thus, you get a more comprehensive picture of Bitcoin predictions and can keep an eye on multiple variables.
If you are a trader, who is also an expert in software development, you’ll definitely like this Bitcoin price prediction 2021 method.
Traders-developers create a program that generates mathematical trading models either under their guidance or on its own and then shapes an optimized trading system.
If the first two methods of Bitcoin price prediction 2025 don’t require any side programs, this one is based solely on computer software. There is a huge variety of programs, which create trading models based on market data.
These Bitcoin future price prediction programs include trading robots and algorithms.
Program Bitcoin price prediction today USD methods also include all sorts of optimizers and statistics collection based not only on parameters and trading models but also on the trading result.
For example, during optimization, the system may recommend you not to trade at a certain time because statistics show that your trading system usually experienced losses at that period.
The Method of Financial Indicators Analysis
This method of Bitcoin price prediction 2021 can be attributed to fundamental analysis.
Financial indicators of a company are analyzed to detect problems or to make sure that a positive result is reached. When using a financial Bitcoin price USD chart, mathematical trading models are not taken into account and trading decisions are made based on financial data.
Opening a position can be at a price that this financial model has evaluated as the most optimal for a purchase.
The selling price can also be calculated using the method of financial indicators analysis.
Most often this method is applied to traditional financial markets, where profitability, revenue, company growth, and competitiveness are the main criteria of financial asset success.
This method of Bitcoin price prediction 2022 is not so popular because the majority of created companies are the pioneers of these technologies and there is a high risk of going broke.
Neural Network Prediction
This Bitcoin price prediction 2021 is the newest and thus the most unknown. Many developers and agencies are trying to use this approach but results are still hidden from the general public.
Neural networks can be divided into two types: trader-trained and self-taught. They can also be divided into two classes.
The first one predicts price direction.
The second class manages the trading account and position after getting data on Bitcoin price prediction today USD from the first class.
Today we won’t focus on neural networks because their study requires significant resources.
The Evolution of Bitcoin Trading
First things first, you should remember that the crypto market is extremely volatile. When Bitcoin emerged, the market’s conjuncture started changing daily: there are thousands of hundreds of professional participants, and it’s a real challenge to beat them.
Besides, there are many derivative instruments, which can impact the price, making the Bitcoin price forecast a burning topic!
But let’s get back to 2009 when Bitcoin was rather difficult to sell. There were only a few exchanges, and they couldn’t boast high liquidity.
Bitcoin price today has sky-high fluctuations.
There were days when the price could increase by hundreds of percent and then drop the same way.
However, the Bitcoin price has never equaled zero and continued to beat new historical highs.
A thing to remember is that every year the cryptocurrency market replenished with new participants that were somehow related to the crypto world: some of them were mining Bitcoin and sold it on exchanges. Others used Bitcoin as an anonymous cryptocurrency for personal matters.
From the day when the crypto market emerged and until 2017, almost 95% of its participants were simple users, who didn’t know anything about trading. However, in 2017 everything changed: once Bitcoin (and other currencies) attracted public attention, the market was flooded with financial experts, who noticed extreme volatility and saw an opportunity to make money.
According to our estimates, around 70% of traders are professional experts and it’s rather challenging to beat them.
There are periods when media sources attract new players and they become victims of those professional traders.
So how to survive on the market?
How to make a Bitcoin price prediction 2040 and earn money?
The answer is simple – to understand how markets work.
Any market, whether it’s a financial or commodity one, is based on the law of demand and supply. On any exchange, you can see the price offered both by sellers and buyers. If the market is dominated by demand, the price increases. If supply, the price drops. In case the supply equals the demand, the price doesn’t change.
Understanding this mechanism is vital for profitable trade and making a Bitcoin price prediction 2021.
Before deciding whether to buy or sell crypto, you should understand what is predominant on the market and in what state it is in.
If it’s a bull market, selling at recent prices is pointless because it is always possible to sell at a higher price. If it is a bear market, you should sell as fast as you can because the price may drop significantly.
The same applies to buying. In a bull market, it’s better to wait (even though buying at any price on a bull market is not a mistake if you’re not a newbie and have a viable risk and money management system).
Only by understanding the mechanisms of the market and exchanges, it is possible to make a Bitcoin price prediction today USD and to remain in a winning position.
Another thing to pay attention to is the quotation of prices.
It can hint whether you should buy now or not.
Isn’t it another possible instrument for Bitcoin price prediction 2021?
If the price for the purchase is much higher than for selling, this may lead to a rapid burst of the price up. And if the price for selling is higher it may lead to a price drop.
However, you should be rather attentive - all the data you see about purchases and sales are also seen by other traders.
And if there is an obvious disbalance but nothing happens – you should stay alert because something is surely wrong. And your Bitcoin forecast 2025 may be incorrect.
The exchange mechanism involves the purchase or sale of a large market position at any price.
You can make money on it if you’re able to react rather quickly. Traders should also pay attention to liquidity, i.e. density of positions on purchase or sale.
If it’s low, most likely the market is weak.
The higher the liquidity is, the simpler it is to make an accurate prognosis.
When making a Bitcoin future value predictions it is impossible to ignore discussions concerning market manipulations.
Inexperienced players of the cryptocurrency world often claim that whales (experienced traders) manipulate the market. They intentionally push the price over a certain limit to collect stop losses.
However, we think that such an assumption is misleading.
If any market player decides to manipulate prices, other participants will notice it and the price will return rather quickly.
Such manipulation is possible only when the trader creates this market himself.
So when making a Bitcoin price prediction 2025 there is no need to worry about manipulations.
Considering that more and more professional traders are entering the market, it’s almost unreal to manipulate the market: too many traders follow the price and notice any suspicious fluctuations.
For sure, such manipulations are possible on some exchanges that allow trading with leverage. But keep in mind that the price always returns to a previous level.
So when making a realistic Bitcoin prediction you surely need to take this into account.
A significant part of Bitcoin price prediction 2021 is played by certain indicators.
In particular, you can pay attention to indicators of short and long positions. If traders have opened too many short positions then you need to be attentive because the price may unexpectedly increase. And vise versa, if many traders are staying in long positions, this will sooner or later cause a rapid price correction.
This indicator can greatly influence Bitcoin price prediction 2030.
Bitcoin Price Forecast - Experts’ Opinions
Despite having a lot of profitable and time-tested strategies, some traders prefer to listen to the cryptocurrency experts and are oriented to their Bitcoin price forecast. That is why we decided to check the most profitable ones for 2020 and compare if they were true.
“After 2014’s 60% decline, by the end of 2016, the crypto matched the 2013 peak […] After the almost 75% decline in 2018, Bitcoin will approach the record high of about $20,000 this year, in our view.”
Author: Bloomberg Analysts
Comment: As you may see, this prediction was good enough. The only thing is $20,000 is definitely not a record.
“Our view for the balance of 2020 is still high volatility with a year-end of around $7,000 [per Bitcoin] with a drive higher to new highs in 2021. A short term washout [will happen] this year before the true rally takes hold [in 2021]… the markets are pulled on the one hand by the inflation hedge story driving bitcoin higher while at the same time the global economy is suffering a massive demand shock with the potential to drive bitcoin lower.”
Comment: Nope. But! I know that many experts had the opinion that Bitcoin will decrease to $7,000 in December.
“The predicted market value for Bitcoin after May 2020 halving is $1trn, which translates in a Bitcoin price of $55,000,” further adding that, “gold and silver, which are totally different markets, are in line with the bitcoin model values for SF.”
Author: PlanB’s Stock-to-Flow
Comment: We still don’t know if BTC should be $55,000 by the end of 2020 - the year was not mentioned. But, according to the sense, they meant exactly this, and this prediction is not right.
We are not going to discuss every Bitcoin price forecast that was made. I just wanted to show you that you can’t just follow a person’s opinion - you need to check everything not to invest blindly.
But, some of the predictions make sense and can be a good ground for further research with the above-mentioned methods. That is why we want to present you the forecasts of experts for the 2021 Bitcoin price, so you can make your own decision on investing.
“I bought more BTC last night at 15800...It’s going to 20k and the. To 65k. The network effect has taken over. I see tons of new buyers and there is very little supply. It’s an easier trade here than at 11k. So YES, buy it.”
Author: Mike Novogratz
“Current bitcoin price action is nice, but we are waiting for a real jump (like the red arrows early 2013 and 2017). IMO that will be the start of the real bull market, and indeed phase5. January 2021?”
Author: PlanB (anonymous creator of the stock-to-flow price model)
“Indeed, it could prove to be particularly beneficial as Bitcoin is, I believe, likely to have another record-breaking year in 2021, with prices expected to rise 50% and possibly double with its current momentum.”
Author: Nigel Green
“The halving will be a big moment for Bitcoin. I don’t think that the price will shoot up the day after it, but I do think that from the day we are right now, we will see Bitcoin’s price at $100,000 by December 2021.”
Author: Anthony ‘Pomp’ Pompliano
“Bitcoin’s killing it this year – it's just crushing all other hedges and asset classes this year, but in 2021 I think Bitcoin could be the year of the fireworks... the best is probably yet to come”.
Author: Tom Lee
Bitcoin Price Prediction 2021: Conclusion
Eventually, to make a viable Bitcoin price prediction today USD it is necessary to choose the optimal prediction method.
If you are not a professional trader and have some free time to master this occupation, we recommend starting with creating trading models based on technical analysis and then using a statistical approach to define models, which perform best results on a current market.
Another Bitcoin price prediction tool is a set of various indicators such as long and short positions.
However, you should still keep in mind market mechanisms and mechanics.
Don’t forget that you need to compete with many professional traders, funds, and algorithms, which possess bigger amounts of information.
A simpler solution will be to apply a trading algorithm of a trader that has shown good results. In this case, you should demand real trading statistics and not history.
It is important to see that the robot is making profits on the market at this particular moment.
And if you are a professional trader, our only advice is to sharpen your trading skills and to constantly adjust to the market which is evolving at a break-neck speed.
We can’t tell you if Bitcoin will ever hit $1 million, but we know that the best method of making a Bitcoin price prediction 2030 that gives a 100% result is your own.
The method, which you have created based on your experience by trial and error.