Bitcoin's movement and price are unpredictable.
The difficulty of predicting the price of Bitcoin is a phenomenon familiar to anyone who follows the cryptocurrency industry.
While there are many prominent personalities who make predictions such as the CEO of a cryptocurrency trading platform, a developer or lead researcher, or a successful investor in the cryptocurrency field.
Many of these predictions see major transformations coming.
Where some believe that the value of Bitcoin will reach the level of 100 thousand dollars or perhaps collapse completely.
As is usually the case in the financial world, there are a lot of such predictions.
But often, these predictions don't come to fruition.
However, many experts in the field (as well as those who consider themselves “experts”) continue to forecast the prices of Bitcoin and other digital currencies, and investors are still watching.
Below, we'll look at why any cryptocurrency investor should view forecast prices with a great deal of skepticism.
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Why is it difficult to predict and where is the analysis from that?
One of the main problems with many price predictions about bitcoin is their lack of adequate analytical support.
An odd price point, especially one on the upside, will always be tempting to investors, anyone holding a cryptocurrency at $0.01 could easily swing to believe that their cryptocurrency will go up to $10,000 just because they want to be right.
However, the problem is that many predictions are made without evidence and analysis to support them.
Macroeconomist Peter Che believes that Bitcoin price expectations, in particular, are overblown.
In 2018, Forbes' Chi published an article that some of the industry's leading figures pushing for sky-high prices are doing so for reasons that may not be related to the fundamentals.
When the CEO of a popular trading platform calls for a bitcoin price much higher than it is estimated today, Chi suggests, that CEO has strong motivations to see cryptocurrencies thrive.
In other cases, the forecast may come from an analyst with a "permanent" position.
These forecasters may be right in their predictions.
It is true that there are a large number of crypto-millionaires who have made significant profits from early investments in the space.
However, Chi points out, forecasters with a perpetually bullish attitude or personal incentive to see prices rise should not be presented by the media.
He continues:
There are plenty of rules surrounding the ads and speculation from CEOs, even critics.
Difficulty to predict:
Moving away from problems with the forecasters themselves, a cryptocurrency investor should always keep in mind that the cryptocurrency industry itself is inherently difficult to analyze.
Even the developers of the world's best cryptocurrencies struggle to keep complete information about the latest cryptocurrencies, tokens, companies, and developments.
Even assuming that one person can successfully filter useful information in an ever-growing pipeline of the cryptocurrency space, the fact that the industry is so young and largely untested means that there is little prior experience that has proven itself.
Models, theories, and strategies in place to help assess where things are and where they are heading.
Even when price forecasting uses analysis in a sophisticated and appropriate way, there will always be many factors that the cryptocurrency community does not yet know about.
This can of course be said about investing in general, but it is arguably a bigger concern in the emerging cryptocurrency space.
All of this means that cryptocurrency investors should maintain a healthy dose of skepticism when price predictions abound.
What we would like to say is to be wary of the predictions that are thrown on social media platforms and to beware of getting attached to and entering the entire capital into a digital currency whose holders publish a lot of missiles and phrases