The Bitcoin Peak Market Cap Model is a tool used to predict the market peak of Bitcoin price.
It was developed by a man named Willy Woo. This model uses a series of calculations to arrive at a metric called peak market capitalization.
Peak market cap is calculated based on the average market cap of Bitcoin.
Average market capitalization is calculated by adding up each day's market capitalization data and dividing it by the number of days the market has been in existence. This value represents the market average.
Willy Woo believes that the market will experience cyclical ups and downs. When prices reach a relatively high level, a market peak usually occurs, which is when prices stop rising and begin to fall.
To find the market's peak, Willy Woo took the concept of average market capitalization and multiplied it by 35 times. This multiplier is derived from historical data and experience and can help accurately identify market peaks.
In addition to the peak market cap model with a 35x multiple, Willy Woo also introduced an additional model that takes into account a 15x multiple. This model can help us better understand what the market is likely to do after it reaches its peak.
For example, assume that the Bitcoin market has existed for 100 days, and the daily market value is 1, 2, 3, 4... until 100. Then the average market value is (1+2+3+…+100)/100=50.5. According to the peak market capitalization model, the peak market capitalization is the average market capitalization multiplied by 35, that is, 50.5*35=1767.5.
This peak market capitalization represents the possible price peak of the market. If the actual Bitcoin price reaches or exceeds 1767.5, then the market may start to decline according to the model’s predictions.
However, this model began to change after 2021. The original 15 times was the second peak after the peak, but later became a new high. This change also means that the so-called bull and bear market changes in the later period will also tend to ease.
Let’s put it this way, people have unlimited fantasies about Bitcoin, and there are even many extreme believers who believe that Bitcoin can reach the level of one million US dollars. However, according to the model’s estimation, after the next bull market, the Bitcoin market will officially enter a slowdown. In the flat period of rising, it is possible to get one hundred and fifty thousand dollars, but the value of one million US dollars can only rely on miracles.