Long Term Update: 2016 Outlook with entropic methods

Chek this post of one year ago for a brief explanation of the theory beyond this forecast. This year I propose again the same analysis and it will be a main guide about support and resistance levels for all 2016.

Updated values for bitcoin (in brackets values of last year)

 BTC/USD
Growth Factor G 1.000166 (1.000553)
Shannon Probability P 0.515 (0.518)
Root mean square RMS (or volatility factor) 0.053 (0.056)

More or less bitcoin’s entropic values dropped a bit, with less volatility and a smaller value for the growth now 0.000166% compounded daily or 6% yearly growth down from 22% of 1y ago.

 2016 Price forecast  Full volatility  Half volatility
Forecast using only G* 458$ 458$
Upper bound adding volatility 1257$ 760$
Lower bound subtracting volatility 167$ 277$

*458 is obtained with today price (432$) times (1.000166^365)=1.06
432*1.06=458, just change 365 with the number of days you prefer for a different forecast.
For a more aggressive forecast you can use 1.001742 instead of 1.000166, this bigger value for growth doesn’t consider measurement error due to the short dataset I used, only 1145 days of historical data. Use this bigger value at your own risk:)

Conclusions

As usual i recommend to consider the support/resistance levels obtained with a halved volatility value thus for 2016 btc has an high probability to stay inside the $277-$760 price zone with a strong support at around $170 in case of panic selling.
At the same time i think that at the end of a strong buying climax period it’ll be hard to see btc price above 1250$ and very unlikely if not impossible to see it at or above 3400$ (using twice the value of historical volatility).

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3 thoughts on “Long Term Update: 2016 Outlook with entropic methods

  1. testianer

    Thanks for the update, Enky!

    What do you think is the reason for the decrease in volatility?

    I kinda miss the old days of 2013 🙂

  2. flavius

    I think we cannot directly compare 2015 and 2016 for Bitcoin because reward halving has way too much impact to be ignored.

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