Crypto analysts, prominent traders…call them what you will, less scrupulous crypto news sites often fall over themselves to plaster their latest outlandish predictions of coin prices in the coming weeks, months, even years. They make for great headlines, and undoubtedly lure some people into making trades based on their advice, but what, or who, is behind these fantastical numbers and what is their basis?
Behind the Price
Today, Tuesday 18th, is a great example of the kind of wild fortune telling that makes for such spectacular headlines. There are three examples in various crypto news outlets over the past 24 hours that are worth looking at, which are these:
Taking the Bitcoin prediction first, the basis for the headline was a tweet put out by an alleged crypto trader called Galaxy, where he compared the current BTC setup with that at the start of the 2017 run, suggesting that if the same plays out again, that puts BTC at $62k by the end of October. And that’s it. The entire basis for the headline is one guy on Twitter, who has based his prediction on history repeating itself. That’s hardly analysis – that’s assumptions and a calculator.
Diving into the second prediction, we see that “a trader” has suggested that ETH could hit $1,000 by the end of 2019. This should already be ringing alarm bells – we could all class ourselves as “a trader”, but how many of us are any good? That’s like asking “a voter” to give you political advice. And indeed that’s exactly what we have – BenjaminBlunts is the trader in question who, surprise surprise, has based his wild prediction on what happened in 2017. Never mind that the Ethereum-fueled ICO rage of 2017 will never happen again and that other, faster smart contracts are taking some of Ethereum’s market share – no, the author of the article is happy to shout from the rooftops about $1,000 ETH based on one trader’s “deja-vu”.
Finally we look at the third prediction, which has XRP targeting 2,000% gains (something that probably falls short of the XRP army’s prediction). This time we’ve upgraded from ‘trader’ to ‘crypto analyst’, so we can expect something impressive..oh no, it’s another random Twitter poster. This time it’s someone by the name of TheWolfOfAllStreets, who says that his “long term forecast” for XRP is $10, with ‘long term’ being the end of 2019. Following his tweet, the news outlet states that, “A break of previous highs above 50 cents would send the price of XRP skyrocketing toward a “long term target” of $10 toward the end of 2019.” Using this kind of language to backup the prediction lends it an air of authenticity it does not deserve, seeing as it amounts to nothing more than rampant speculation given the time frame involved. The outlet then adds a follow up:
The highs for XRP also coincide with the “local top” many Bitcoin analysts are looking at for the peak of the next bull run.
This argument, which barely makes sense, seems to suggest that a crypto bull market will only end once XRP has hit its target, an argument that is so completely absurd that it’s a wonder the keyboard let the author write it without malfunctioning in protest.
Analyze the Analysts
With price speculation pieces like this it’s important to analyze both the rationale behind the target and the person making the prediction before making your mind up. Don’t get us wrong, we use tweets as well when discussing our analysis, but usually only to illustrate sentiment, and we never base an entire article off the predictions of one Tweet. Turning a tweet into a clickbait headline is damaging in a number of ways, and gives rise to the ridiculously overhyped predictions that fuel both the moonboy brigade and the anti-crypto wing of the mainstream media. In short, if you ever come across an article with any kind of price prediction, see who the ‘crypto analyst’ or equivalent is, what their reasoning is, and do more research before using it as a base for your investing plans.