Bitcoin(BTC)
$107,059 has attracted significant attention with its robust performance in April and May, showcasing a remarkable 46.32% surge. During the period from May 5 to May 22, Bitcoin gained 18.48% in value, significantly enhancing its Compound Annual Growth Rate (CAGR). This boost has sparked a wave of optimism in the market, leading analysts to suggest the possibility of a major bull run on the horizon.
Understanding the Surge in Bitcoin’s CAGR
Crypto analyst Axel Adler Jr. highlighted the notable increase in Bitcoin’s four-year CAGR. In April, the rate had dropped to as low as 7%. This reflects Bitcoin’s strong performance early in the year, which saw a 9.54% growth in January followed by declines of 17.5% in February and 2.19% in March. By April, prices had dipped to a low of $74,446.
Bitcoin CAGR Indicator
However, the Bitcoin market rebounded swiftly. According to Adler Jr.’s June report, Bitcoin’s CAGR has now risen to 31%. He asserted that this rapid recovery demonstrates how quickly long-term trends can shift when strong buyer momentum enters the market. Despite this rise, the 31% CAGR indicator remains below historical bull market peaks, signaling potential for further growth.
October’s Ambitious $168,000 Target
Adler Jr. forecasts Bitcoin’s price could reach $168,000 by October. This projection is based on the assumption that momentum in the futures market and leverage usage will continue. The $168,000 target is further supported by accelerating growth and historical patterns observed in previous bull runs. Adler Jr. believes that current market conditions and growing optimism could facilitate reaching these levels.
Debating Risk-Adjusted Returns
On the other hand, X user Manu proposed an alternative perspective on interpreting the CAGR indicator. Manu suggested dividing the CAGR by standard deviation to eliminate volatility and highlight risk-adjusted returns. While Adler Jr. agrees this approach could offer clearer insights into market performance, he emphasized a critical aspect, stating, “The real turning point occurs when investors start taking profits based on expected returns.” He warns that when Bitcoin’s trading volume exceeds 1 million BTC, the risk of a bear market increases as large-scale profit-taking disrupts the supply-demand balance.
