An analysis of Bitcoin’s fundamentals and on-chain data provide bullish price predictions.
Many financial experts predict a CTS price in the range of $100,000 to $400,000 in 2022.
Some forecasts even predict that the price of Bitcoin will rise to $1 million within 5 years.
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Experts from the financial markets and crypto are pleased to look at the Bitcoin (BTC) price forecasts for 2021 and the next few years. How will the share price evolve? This is the multi-billion dollar question.
In December, the price of Bitcoin finally surpassed its historical record of 2017, entering a new phase in its history. Long-term technical indicators confirm that the market’s leading crypto-money is not at the end of its parabolic rise for the coming years. So what can we expect?
Among the many different attempts to answer this question, we have chosen those recently presented by the best analysts, investors and market experts, while supporting them as convincingly as possible on the arguments they have chosen. Let’s start, however, with the fundamentals of the subject.
Fundamental Analysis of Bitcoin
The key element of Bitcoin’s valuation is its uniqueness, which is attracting more and more traders as well as institutional and individual investors. Bitcoin derives this uniqueness from the technology on which it was built: the blockchain.
Satoshi Nakamoto’s ingenious innovation, based on the intangible mathematical principles of cryptography, has given rise to a new asset class: crypto-money, of which Bitcoin is the first and most important incarnation. This crypto-currency thus corresponds to a set of immutable characteristics, benefiting from a highly measurable asset thanks to on-chain analysis.
Bitcoin’s Fundamental Characteristics
Among the most important fundamental characteristics of Bitcoin we can cite :
Technology: the blockchain guarantees cryptographic protection.
Decentralization: no one manages the network, no entity can order its authority to change fundamental principles such as total provisioning or mining reward.
- Transparency: Public keys and on-chain analysis.
- Scarcity: a total and constant supply set at 21 million BTC.
- Anonymity: no need to share personal data and make it available to all institutions.
- Security: access to funds only with private keys, whose security guarantees protection against loss of money.
- Speed: Allows funds to be transferred from anywhere in the world in a matter of minutes.
The above features provide investors with the confidence that their funds are well protected, while fuelling the hope that their value will increase over time.
On-Chain Analysis and Bitcoin Price Forecasts
From the point of view of Bitcoin’s price forecasting, perhaps the most important is its unique feature of transparency, which has allowed the development of a new sub-domain of fundamental analysis, namely on-chain analysis, or chain analysis. Analysis companies such as Glassnode or Chainanalysis provide interesting data on many key network activities, such as network status and capacity, transaction liquidity or investor sentiment (GNI: Glassnode Network Index).
Among the most popular on-chain analysis indicators for Bitcoin are Net Unrealized Profit/Loss (NUPL), Stock-to-Flow Deviation, Puell Multiple, addresses with a balance of 0.1 or more, and hash rate.
Most of these indicators generate very bullish charts for the price of Bitcoin. For example, according to a tweet from Glassnode, the number of accumulated addresses – that is, those where only an amount of BTC arrives and from which funds have never been paid out – is steadily increasing. It has even recently reached new record highs, even surpassing the peak of the 2017 bubble:
Another example is the Net Unrealized Profit and Loss Rate (NUPL), which, according to Glassnode, has recently moved from optimism to confidence. The value of this indicator when Bitcoin was trading at USD 12,000 was lower than the same valuation last year. Analysts associate this with a strong upside potential for Bitcoin’s price:
Another useful indicator for choosing the right time to buy or sell Bitcoin is the volume of Bitcoin sold.