How to predict the price of bitcoin or any other currency

To predict the price of bitcoin or any other currency such as the dollar, it is necessary to understand human behavior, because it is human behavior that serves to predict the possible values of the different currencies that move in the markets.

It is necessary to think about how people act. When there is a strong rise in a currency, many people may start selling it to take profits, and this makes its price fall and causes several people to be affected because they bought a currency at a higher value.

Those who entered right at the end of the peak are not going to buy more until the price does not return to the resistance it had touched before and with an aggravating factor: it is very likely that those who have entered in the last phases of buying, have leveraged themselves, so they are forced to sell down. As everyone knows, leverage is a risky financial practice that consists of going into debt to fund an investment, BTC futures often have leverage exposure.

It also happens that some people decide to sell bitcoin down or even up because they can't afford to wait too long for it to go up. Perhaps they need the money for something immediate and can't wait, they usually sell early. Thus, the big sell-off causes a correction or drop in value, which is a natural part of the market.

When a person has several declining products in an investment portfolio, they may sell those that are rising to offset the losses of the other assets. This is essentially human behavior, economics is human action and it is subjectivity.

To say what things are worth according to their essence is incorrect. The theme that bitcoin or gold is a store of value does not exist, as opposed to the idea that they are assets that serve as a refuge of value in the face of crises.

When markets fall, everything falls. Many times when there is a crash, a financial collapse, and a drop in prices, we usually analyze what happened to find logic. When you find the logic, you usually see that the reality of the resulting prices comes from millions of people trading on something at the same time.

Prices should be viewed with a calmness different from the nervousness with which those who believe only in fundamentals want to analyze them: if we buy because it is going up or sell because it is going down, sooner or later we will realize that things do not work that way.

It is necessary to browse forums, see what people think on social networks, how is the volume of sales or purchases (if people are loitering or selling) as that can be signs that reveal the behavior of traders within the market, usually, where traders (the big whales) move mostly, is where ultimately the markets move in the same way.

Many might say that bitcoin found its "equilibrium price" in the last year. This is because in April 2021 it touched nearly USD 64,000, in July it fell below USD 30,000, in November it hit an all-time high of USD 67,800 and in January 2022 it hit its low since then at USD 35,000.

However, this does not symbolize that bitcoin has reached an equilibrium level. This concept, much used by professors in universities, is best forgotten because the market is always dynamic. There is nothing balanced in the world. Everything is always in continuous movement. Nothing ever finds its level. It is enough for someone to declare that prices are here to stay for the opposite to happen.

In economics, one predicts by listening to everything that others say, but not to do what others say, but to do exactly the opposite of what the majority says.

Following this idea, if you ask people in the United States if they think bitcoin will go up to USD 70,000 or down to USD 30,000, you always have to go against what the majority says. 

Based on what has been written and according to the behavior of bitcoin, it is very likely that this currency will go up and it is very possible that bitcoin will have a very important rally similar to that of 2020 to 2021. In fact, it seems that the price rise has already started quietly in the last few weeks.

It is very possible then (take note of this), that in the next few years bitcoin could reach USD 96,000-116,000 and more in the long term to USD 399,000, as long as its price does not fall again below USD 37,500.

If the price drops from there it will be quite difficult to take shape upwards directly. However, opinion is changing in the market. Unlike in politics, in economics, you cannot always think the same because the market has to confirm what you are thinking.

In summary, never forget that investments in cryptocurrencies and similar, are and will always be very high-risk investments and when the risk is present in large amounts, anything can happen.

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