There are a number of #Bitcoin price guides both inside and outside the X sphere; oscillators/indexes for short-term trading, and projections for longer-term planning. The Decay Channel is the latter but is the basis for an…
A new model has been proposed to track the potential price moves of Bitcoin (BTC). The decay model is more conservative, taking into account the unique opportunities during the earlier days of Bitcoin trading.
The decay model was created to challenge previous curves, especially the prominent Rainbow chart and Stock-to-flow (S2F) model. Long-term models aim to complement sentiment metrics that focus on short-term trades. The S2F and rainbow model also predict the behavior of BTC once a bull cycle occurs. For instance, the Rainbow model predicts that for each bull cycle, the price will rally at least to the orange zone.
A model based on halvings is also skewed toward rapid growth and a fast move to a higher price range. The decay model takes into account more factors that can limit the price of BTC to a more rational level, in line with available liquidity and market sentiment.
The decay model takes into account the upper side of the BTC price chart, instead of charting just the years-long trend of higher lows. This results in a diminishing growth boundary, reflected in the current subdued bull market.
The model reflects the 2024 reality of failing to rally to the $100,000 range, as expected due to the cycle of halvings. Instead, BTC achieved a smaller cycle top, but also a smaller drawdown, erasing just 29% of its value. Previous cycles offered bigger growth, but also drawdowns of at least 70%.
Unlike other models, the decay chart does not plot the upper bound of BTC as an exponential move, avoiding the over-optimistic scenario. Cycle tops are also based on historical data, and not on scenarios suggesting irrational buying or hyper-bitcoinization.
The decay model still envisions new highs for BTC at nearly 300% the current price, though with gradual growth until 2030.
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