April has been historically a very good month for Bitcoin.
If the April trend is combined with the emerging monthly pattern of large increases and subsequent regular corrections, it is possible to theoretically estimate the BTC price at the end of April 2021. According to a back-of-the-envelope calculation, it could reach $ 90,000.
Monthly Bitcoin Rises
Since the beginning of 2021, Bitcoin (BTC) has continued its bullish run. Each time, it has broken new all-time highs. However, this rise is not a straight line heading north. After each significant increase, the alpha cryptocurrency recorded a double-digit correction, percentage wise.
It turns out that the rise has a certain pattern that is visible on a monthly basis. This was noticed recently by the well-known on-chain analyst @WClementeIII. In his tweet, he drew a graph of the regular increases in BTC and subsequent corrections.
Could very well just be a coincidence, but this is what price-action has done following option expiries at the end of the last few months.
Most notably was following January (+99%) which was the previous record at $4B, keep in mind the amount expiring tomorrow is $6B. pic.twitter.com/5Yq59IlHi5
— William Clemente III (@WClementeIII) March 25, 2021
In his opinion, significant increases begin after the last Friday of each month. This is the option market contract expiry date at the end of each month. He added that in the past quarter, the biggest increase came after the $ 4 billion in options expired at the end of January. As a result, Bitcoin grew 99% in just over 3 weeks.
The last Friday of March was on the 26th, and with it, options totaling around $ 6 billion expired. How did Bitcoin react? The price moved up immediately and generated a bullish engulfing candle (red arrow) with a body of 7.28%. BTC increased from $ 51,200 to $ 55,000. Most recently, when Bitcoin generated such a candle on March 1 (blue arrow), it further grew by a total of 44%.
Bullish April since 2011
Other data that could bring more light on Bitcoin’s potential behavior in the next month relates to its historical rate of return in April. If you consider the entire history of the largest cryptocurrency and go back to 2011, it turns out that the coming month has been a period of significant gains in the past.
A detailed table of monthly returns was recently shared on Twitter by @SavageBTC. He points out that “8 out of 10 April’s have been ‘historically’ bullish for #BTC”.
8 out of 10 April’s have been ‘historically’ bullish for #BTC.
This means nothing to me, although I think it would be a good month for the corn as long as we don’t make a lower low on the 3D
— Bitcoin Savage (@SavageBTC) March 26, 2021pic.twitter.com/fNFEUPNBcy
$ 90,000 in April?
If we average the above two groups of historical data now, we may attempt to extrapolate the previous price action to the upcoming month. Such a procedure is by no means a valuable prediction of Bitcoin’s price. Instead, it can serve as an indication of what is theoretically possible based on historical data.
Referring to the first chart from @WClementeIII, we can see that the rates of return in the first three months of this quarter were respectively: 80%, 99% and 44%. After averaging, we get a hypothetical rate of return in April of 74.3%.
Next, according to the historical table of monthly returns in previous years provided by @SavageBTC, Bitcoin recorded in April (rounded to one), respectively: 346%, 1%, 48%, -1%, -3%, 8%, 28% , 33%, 29% and 35% return. After averaging, we get 52.4%.
Now, averaging these two values: 74.3% and 52.4%, we get a rate of return of 63%.
If we extrapolate this to the current BTC price in the area of ??$ 55,000 and add 63%, we get the Bitcoin price around $ 90,000 in the second half of April 2021.
Can this math game convince someone to go all-in on BTC at this point? We hope not. Is it just one of many market indications of what is theoretically possible. We believe that it could be so.