Bitcoin at $ 300,000, price signals to watch

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Michal van de Poppe founded the crypto consultancy firm Eight Global. He expects the bitcoin bull cycle to last 6-9 months, with prices peaking at $ 300,000. Van de Poppe has broken down the 4 signals he watches to make price predictions.

Michal van de Poppe is convinced the current bitcoin bull cycle has room, but questioned a recent high-profile price prediction.

“I don’t believe Cathie Wood’s $ 500,000 prediction, it’s a little ridiculous,” he told Insider in a recent interview. “$ 500,000 would put bitcoin close to gold in market capitalization, that just doesn’t make sense.”

At this week’s SALT conference, star stock picker Wood said she expects bitcoin to hit $ 500,000 in five years. She also told CNBC presenter Andrew Ross Sorkin that her company Ark Invest is stepping up its commitment to the ether.

Van de Poppe has been trading cryptos for four years and recently founded the Eight Global advisory and education platform. He runs a 12-person operation based in Amsterdam.

“One of my best friends showed me Coinmarketcap in 2017,” he said. “I started trading crypto, made a ton of mistakes, but I was interested in bitcoin and what it really stood for.”

“When I read the bitcoin white paper, I thought ‘this could be big’, and I went down the rabbit hole,” he added.

The price of Bitcoin has been volatile in 2021, rising from $ 32,000 to an all-time high of nearly $ 64,000 in April. It has since fluctuated between $ 40,000 and $ 50,000.

Van de Poppe explained to Insider why he thinks bitcoin will hit $ 300,000 in the first half of 2022, how long he thinks the bull cycle can last, and what price signals he’s watching.

Bitcoin at $ 300,000, not $ 500,000

Van de Poppe said he based his price prediction of $ 300,000 on anonymous analyst Plan B’s stock-flow model, which compares the amount of bitcoin in circulation to its production rate.

“Plan B’s stock-to-flow model has $ 250,000 to $ 300,000 as a peak,” he told Insider. “The current market capitalization is around $ 2.3 trillion, but in this situation it would reach over $ 10 trillion, comparable to the dot-com bubble.”

Van de Poppe also said that the stock-flow model indicates that the bull market will last between six and nine months longer. However, he warned that this bull run would be different from the others.

The increased involvement of institutional investors, combined with bitcoin’s 65% price spike this year, will increase the role of external factors and reduce the impact of “halves,” according to van de Poppe. A halving refers to when the reward for mining bitcoin is halved, occurring about once every four years.

“We have the four-year cycle, the halving period, but the bigger the market, the less impact the halving has on the price,” van de Poppe told Insider. “On the other hand, the impact of macroeconomics will be heavier as the market expands, both the Fed or the European Central Bank could start to have an impact on the market.”

But while van de Poppe remains bullish on bitcoin, he questioned Wood’s $ 500,000 price prediction.

“Five years is so far from here,” he said. “$ 500,000 is like a bubble valuation, it just doesn’t make sense. “

He added, “Yes, the market will always top the top, but $ 500,000? I don’t think so.”

At the SALT conference, Cathie Wood said she believes the price of bitcoin will rise to $ 500,000. Brendan McDermid / Reuters Price signals to watch

Having a background as an economist, van de Poppe’s advantage lies in analyzing the prices of crypto, rather than technically evaluating a coin’s potential applications. He told Insider he’s looking at four metrics in particular.

“My main business is price action,” he said. “This is the easiest approach you can have.”

Price action is the movement in the price of a security plotted over time. Traders develop price action charts to spot and interpret trends; van de Poppe posts a significant amount of this kind of technical analysis on his Twitter account with 400,000 followers.

van de Poppe said he combines this quantitative analysis with constant analysis of market sentiment.

“That’s a great trick – to combine price points and sentiment,” he said.

“If bitcoin is at $ 30,000 and people think $ 20,000 is guaranteed then they are looking to sell, that gives you a massive buy signal,” he added, describing an investment strategy. against a current.

Van de Poppe also told Insider that he is working on integrating chain analysis into his research.

This is when price analysts use a crypto-asset’s public ledger to create and examine a financial data set. Chain analysts attempt to determine the fundamental, rather than speculative, value of a blockchain.

Finally, van de Poppe said he has kept an eye on the graphical patterns, which may help bitcoin investors spot a “golden cross” or a “death cross.” A golden cross is when bitcoin’s 50-day moving price average exceeds its 200-day moving price average; a cross of death is when the opposite happens.

Some money managers argue that bitcoin’s golden cross occurred on September 14, when the short-term price average exceeded the long-term price average. However, van de Poppe cautioned investors not to be overly bullish on this price signal.

“The golden cross is a signal that we may be back in a boom cycle, but it’s never guaranteed,” he said. “But the fact that some traders use it makes it important to have some understanding.”

“Earlier this year, we had a death cross, but the market went up,” he added. “I don’t use crosses too much because it can be quite difficult to build a strategy around them.”

Whatever strategy he adopts, it is clear that van de Poppe plans to stay involved in the crypto space for a long time.

“Crypto is my life, it’s my passion,” he told Insider. “My friends don’t call me Michal anymore, they call me Michal crypto.”

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