🤩 Crypto Has +90% Upside - Data Inside!

AI-generated source summary

The analysis compares Bitcoin's performance relative to the Nasdaq 100 (NDX) index. Historically, Bitcoin has outperformed NDX in previous cycles, showing significantly higher percentage returns. For instance, in one cycle, Bitcoin's outperformance was over 800%, and in another, it was 57.7%. In the most recent cycle, Bitcoin's outperformance was 13.13%. Currently, BTCUSD/NDX is trading at an equilibrium, but the chart indicates a potential for Bitcoin to underperform NDX in the short to medium term, with a potential downside of 30% for Bitcoin relative to NDX if money flows out of crypto into stablecoins. A backtest of a trend-following strategy using 2-day and 116-day SMAs on Bitcoin shows a 152.61% annual return with 2.5x leverage long and 2x leverage short, compared to a 21.88% annual return for a buy-and-hold strategy. The backtest indicates a maximum drawdown of -85.82% for the strategy and -81.28% for buy-and-hold. The strategy leverages Bitcoin's medium-term trend, entering long when the 2-day SMA crosses above the 116-day SMA and flipping short when it crosses below. The analysis suggests that while Bitcoin might face headwinds relative to tech stocks, its own market dynamics and the potential for sustained inflows into stablecoins could still lead to price appreciation over a multi-year horizon.

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