A fresh analysis of the trajectory of Bitcoin BTC/USD and Ethereum ETH/USD by a well-known crypto analyst highlighted a trend of diminishing returns for the apex cryptocurrencies.
This observation by Coin Bureau's Guy Turner was based on a method of analyzing historical gains through key zones of support and resistance.
In the context of the ever-evolving world of digital assets, understanding these potential patterns becomes paramount. This topic, among others, will be further explored at Benzinga's Future of Digital Assets conference on Nov. 14, which aims to shed light on the trajectory and potential of cryptocurrencies in the coming years.
According to Turner's analysis, during Bitcoin's first cycle, the support and resistance zone was approximately $1,000. With Bitcoin's peak in 2017 reaching about $20,000, this marked a 20x gain.
However, in the subsequent cycle, where the key zone was around $10,000 and the top was $70,000 in 2021, the gain was 7x.
“This suggests that BTC has diminishing returns over time, which makes sense considering that this is what happens to every asset as it matures,” Turner said.
Based on this pattern, Turner forecasted a potential 3x gain from Bitcoin's current key zone to its next peak.
Given the current cycle's key zone was approximated at $40,000, this suggested a Bitcoin price of around $120,000 in the next cycle.
Ethereum, another major cryptocurrency, wasn't exempt from this pattern.
Turner pointed out Ethereum seemed to be tailing Bitcoin by one cycle. With Ethereum's previous cycle support zone at $250 and a 2021 top of around $5,000, there was a 20x gain.
Projecting forward, Turner predicted a 7x gain from Ethereum's current zone of around $2,500, hinting at a possible price of $15,000, which aligned with several other market predictions.
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