Today we have seen an extremely strong price increase in BTC: BTC has touched $64K which is the highest price since November 15, 2021. To me, this is a signal that BTC has exited the recover phase and enter the growth phase.
The concern of many investors right now is: to what price range can BTC price rise before a significant correction occurs? Typically, the Price Action method suggests that the old ATH ~$64K is a key price zone, which is where those who bought in 2021 can sell to recoup their capital.
However, this is usually only reasonable in the context of a negligible inflation rate, meaning that an investor who put in $100K in 2021 will accept $100K back in 2024. In reality, because of inflation and rising interest rates, that investor will only be satisfied to get back $110K > $100k in 2024. James Van Straten has a specific analysis of this possibility for BTC's ATH in 2021.
To understand the true impact of inflation on Bitcoin, we can adjust its November 2021 all-time high of $69.42K for CPI inflation. Using US Bureau of Labour Statistics data, this reveals a staggering reality: to truly regain its peak, Bitcoin would need to reach nearly $77K
[1].
I am not surprised with this calculation. I even believe that BTC's ATH in 2021 was set at $65K in April instead of $69K in November. The $69K peak could just be a consequence of inflation, meaning $69K in November could real value was below $65K in April. If this calculation is correct, we could see a reversal in BTC as it approaches $77k. If this happened in April, it would coincidentally coincide with my prediction of $77.5K BTC price at the upcoming Halving, although I did not have high expectation for this scenario
[2].
Do you use the Price Action method? What do you think about calculating the important price zone that BTC is about to face using inflation data? Will you act when BTC hits $69K or $77K?
[1]
The Bitcoin all-time high in an inflation-adjusted world is $77,000[2]
Predict BTC price at Halving