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Technical Documentation

Table of Contents

  1. Introduction
  2. Methodology
  3. Data Sources
  4. Market Cycle Analysis
  5. Scenario Calculations
    Bullish Scenario
    Neutral Scenario
    Bearish Scenario
  6. Halving Cycle and Corrections
  7. Scope and Limitations
  8. Summary

1. Introduction

This document presents the methodology and calculations behind the cryptocurrency price prediction model. The model was developed to generate price projections for cryptocurrencies from a specific starting date and price, taking into account various market scenarios and the cyclical nature of crypto markets.

The model presents three scenarios (bullish, neutral, and bearish) and provides monthly price projections that account for market cycles, the Bitcoin halving cycle, and correction patterns.

 

2. Methodology

The model was developed according to the following steps:

  1. Historical Data Analysis: Analysis of historical price data of 15 cryptocurrencies over a period of 7 years (2017–2024)
  2. Market Cycle Identification: Identification of bullish, neutral, and bearish market periods
  3. Growth Rate Calculation: Calculation of representative growth rates for each scenario
  4. Cyclical Modeling: Modeling of future cycles based on historical patterns
  5. Halving Effect Integration: Incorporation of the impact of Bitcoin halvings on the entire market
  6. Correction Integration: Implementation of corrections in all scenarios

This methodology produces a predictive model that generates price projections for any given cryptocurrency, starting from a specific price and date.

 

3. Data Sources

The model is based on historical price data of 15 cryptocurrencies during the period 2017–2024:

  1. ETH (Ethereum)
  2. BCH (Bitcoin Cash)
  3. XRP
  4. Litecoin
  5. Cardano
  6. IOTA
  7. Dash
  8. NEM
  9. Monero
  10. Bitcoin Gold
  11. Stellar
  12. EOS
  13. Neo
  14. Ethereum Classic
  15. TRON

The dataset includes prices at different time points, including year-ends, enabling the calculation of annual growth rates.

 

4. Market Cycle Analysis

From the analysis of historical data, the following market cycles were identified:

Bullish Years (Strong Positive Growth)
2019–2020: Average growth of +171.7% across all coins
2020–2021: Average growth of +199.7% across all coins

Neutral Years (Moderate Growth)
2022–2023: Average growth of +57.9% across all coins
2023–2024: Average growth of +49.8% across all coins

Bearish Years (Negative Growth)
2017–2018: Average decline of -83.4% across all coins
2021–2022: Average decline of -65.5% across all coins

The analysis also showed that the crypto market follows a cyclical pattern with an average duration of approximately 3.5 years, consisting of:

  • Bullish phase: ~2 years
  • Bearish phase: ~1.5 years

These cyclical patterns form the basis of the predictive models.

 

5. Scenario Calculations

For each scenario (bullish, neutral, and bearish), specific growth rates were calculated based on historical data. Below is how these calculations were made:

 

Bullish Scenario


Step 1: Identification of Bullish Years
2019–2020 and 2020–2021 were identified as the most bullish periods, with nearly all cryptocurrencies showing strong positive growth.

Step 2: Calculation of Annual Growth Rates
2019–2020:
ETH: +471.3%
BCH: +66.8%
XRP: +15.8%
Litecoin: +202.4%
Cardano: +500.0%
IOTA: +81.3%
Dash: +148.8%
NEM: +425.0%
Monero: +248.9%
Bitcoin Gold: +33.3%
Stellar: +225.0%
EOS: +11.5%
Neo: +67.1%
Ethereum Classic: +19.0%
TRON: +200.0%

Average Growth 2019–2020: +171.7%

2020–2021:
ETH: +401.9%
BCH: +25.7%
XRP: +281.8%
Litecoin: +17.7%
Cardano: +638.9%
IOTA: +313.8%
Dash: +32.4%
NEM: -57.1%
Monero: +59.2%
Bitcoin Gold: +475.0%
Stellar: +107.7%
EOS: +8.6%
Neo: +83.1%
Ethereum Classic: +560.0%
TRON: +166.7%

Average Growth 2020–2021: +199.7%

Total Average Bullish Growth: +185.7%

Step 3: Adjustment for Model Application
A slightly more conservative annual growth rate of +150% was chosen as representative of the bullish scenario to temper extreme outliers and account for potentially less extreme future bull runs.

Step 4: Conversion to Monthly Growth Rate
Monthly growth rate = (1 + Annual growth rate)^(1/12) - 1
Monthly bullish rate = (1 + 1.5)^(1/12) - 1 = 2.5^(1/12) - 1 ≈ 0.0770 or 7.70% per month

Step 5: Application in Different Market Phases
In the bullish scenario, the monthly growth rate of 7.70% is applied as follows:

  • In bullish market phases: 100% (7.70% per month)
  • In neutral market phases: 70% (5.39% per month)
  • In bearish market phases: 30% (2.31% per month)
  • During corrections: Negative percentages (-5% to -10% per month)

 

Neutral Scenario


Step 1: Identification of Neutral Years
2022–2023 and 2023–2024 were identified as neutral periods, marked by moderate growth.

Step 2: Calculation of Annual Growth Rates
2022–2023:
ETH: +96.3%
BCH: +180.6%
XRP: +85.3%
Litecoin: +35.8%
Cardano: +116.0%
IOTA: +76.5%
Dash: +28.9%
NEM: +33.3%
Monero: +24.1%
Bitcoin Gold: +80.0%
Stellar: +50.0%
EOS: +10.8%
Neo: +59.4%
Ethereum Classic: +40.0%
TRON: +120.0%
Average Growth 2022–2023: +57.9%

2023–2024:
ETH: +42.5%
BCH: +59.3%
XRP: +231.7%
Litecoin: +7.7%
Cardano: +57.4%
IOTA: -3.3%
Dash: -32.8%
NEM: -35.0%
Monero: +12.9%
Bitcoin Gold: -50.6%
Stellar: +175.0%
EOS: -16.3%
Neo: +27.1%
Ethereum Classic: +21.6%
TRON: +127.3%

Average Growth 2023–2024: +49.8%
Total Average Neutral Growth: +53.9%

Step 3: Adjustment for Model Application
An annual growth rate of +50% was chosen as representative of the neutral scenario, which is close to the calculated average.

Step 4: Conversion to Monthly Growth Rate
Monthly neutral rate = (1 + 0.5)^(1/12) - 1 ≈ 0.0342 or 3.42% per month

Step 5: Application in Different Market Phases
In the neutral scenario, the monthly growth rate of 3.42% is applied as follows:

  • In bullish market phases: 130% (4.45% per month)
  • In neutral market phases: 100% (3.42% per month)
  • In bearish market phases: 50% (1.71% per month)
  • During corrections: Negative percentages (-7% to -15% per month)

 

Bearish Scenario


Step 1: Identification of Bearish Years
2017–2018 and 2021–2022 were identified as the most bearish periods, with nearly all cryptocurrencies showing significant declines.

Step 2: Calculation of Annual Growth Rates
2017–2018:
ETH: -82.4%
BCH: -93.5%
XRP: -84.3%
Litecoin: -86.6%
Cardano: -94.3%
IOTA: -92.9%
Dash: -92.5%
NEM: -94.5%
Monero: -86.0%
Bitcoin Gold: -95.6%
Stellar: -73.2%
EOS: -72.1%
Neo: -90.0%
Ethereum Classic: -82.1%
TRON: -50.0%


Average Decline 2017–2018: -83.4%

2021–2022:
ETH: -67.7%
BCH: -77.2%
XRP: -59.5%
Litecoin: -54.1%
Cardano: -81.2%
IOTA: -85.8%
Dash: -66.7%
NEM: -66.7%
Monero: -45.2%
Bitcoin Gold: -78.3%
Stellar: -70.4%
EOS: -73.7%
Neo: -73.5%
Ethereum Classic: -54.5%
TRON: -37.5%


Average Decline 2021–2022: -65.5%
Total Average Bearish Decline: -74.5%

Step 3: Adjustment for Model Application
A less extreme annual decline of -50% was chosen for the bearish scenario to account for potentially less severe future bear markets.

Step 4: Conversion to Monthly Growth Rate
Monthly bearish rate = (1 - 0.5)^(1/12) - 1 ≈ -0.0561 or -5.61% per month

Step 5: Application in Different Market Phases
In the bearish scenario, the monthly growth rate of -5.61% is applied as follows:

  • In bullish market phases: 30% (-1.68% per month)
  • In neutral market phases: 70% (-3.93% per month)
  • In bearish market phases: 100% (-5.61% per month)
  • During accelerated declines: Up to -10% per month

6. Halving Cycle and Corrections

Halving Effect
The model integrates the effect of the Bitcoin halving (scheduled for May 2028) on the broader crypto market. Although Bitcoin itself was not in the analyzed dataset, the halving effect is a broad market phenomenon that also affects altcoins.

The halving effect is calculated using the formula:
Amplification Factor = 1 + (0.5 * (1 - |months to halving| / 3))

This yields:

  • On the halving date: 50% extra growth
  • 1 month before/after: 33% extra growth
  • 2 months before/after: 17% extra growth
  • 3 months before/after: no extra growth

Corrections
The model also includes corrections in all scenarios, based on historical patterns:

In Bullish Scenario

  • Minor corrections (-5% per month): Periodic, e.g., Dec 2024 – Jan 2025
  • Major corrections (-10% per month): After significant surges, e.g., June–July 2028 post-halving

In Neutral Scenario

  • Medium corrections (-7% to -15% per month): Periodic, e.g., June–July 2028

In Bearish Scenario

  • Accelerated declines (up to -10% per month): In the core of bearish phases
  • Small recovery rallies (2–3% growth): Between longer bearish periods

7. Scope and Limitations

Scope
This model is developed for:

  • Simulating price developments

Limitations
The model has the following limitations:

  1. Historically Based: The model is based on historical data and patterns, which may not be representative of future developments.
  2. Cyclical Assumption: The model assumes recurring market cycles, while the crypto market evolves.
  3. No Individual Crypto Analysis: The model does not differentiate between specific characteristics of individual cryptocurrencies.
  4. External Factors: The model does not account for external factors such as regulation, technological breakthroughs, or macroeconomic developments.

8. Summary

The cryptocurrency price prediction model offers a data-driven approach to projecting future crypto prices under various market scenarios. The model is based on the historical performance of 15 cryptocurrencies over a 7-year period and integrates key market features such as cycles, corrections, and halving effects.

The resulting price projections simulate possible price developments, from optimistic (bullish) to pessimistic (bearish), with a middle-ground (neutral) scenario. These projections are not an indication of future performance.

This document is intended for educational and informational purposes only and does not constitute financial advice. Cryptocurrencies are highly volatile investments with substantial risks.