Bitcoin Delta Valuation Model: $114K Coming Soon

Investing
Updated: 15th Nov 2021
Written by Sean Graytok
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Investing
November 15, 2021
Written by Sean Graytok

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The Bitcoin Delta Valuation model predicts that the price is headed for $114,000. But what is Delta Valuation? And how does it work?

Here’s what you need to know about this on-chain Bitcoin price model.

What is the Bitcoin Delta Valuation Model?

The Bitcoin Delta Valuation model is used to determine the peak price of bitcoin for a given cycle.

The model arbitrarily multiplies an on-chain metric called “delta cap,” which is used to detect market floors by the number 7.5 to identify the top price.

This model has a similar methodology as Willy Woo’s Top Cap model, which also multiplies a floor-related metric to catch market tops.

The Bitcoin Delta Valuation model was created by on-chain analyst Will Climente in late 2021.

It currently predicts the price of bitcoin to reach $114,000.

Bitcoin Delta Valuation Model & Analysis

Before we get into the details of the model, here’s a chart so you can better visualize it:

Bitcoin Delta Valuation Model Chart

The delta top (light purple) is equal to the delta cap (dark purple) multiplied by a factor of 7.5.

The model has caught each of the last four macro tops:

Delta Valuation Model for Bitcoin

As of this writing, delta’s price times 7.5 puts the bitcoin price at $114K.

Calculating The Bitcoin Delta Valuation Model

The Bitcoin Delta Valuation model is essentially a top price target based on bitcoin’s delta cap.

Here is how to calculate the top of the model:

Delta Valuation = Delta Cap * 7.5

Delta cap was created by David Puell and is calculated as follows:

Delta Cap = Realized Cap – Average Cap

Realized cap approximates the value paid for all coins based on the price that it was last transacted on-chain.

Average Cap is the all-time moving average cap of Bitcoin.

Puell noticed something interesting when he took the difference between the realized cap and average cap.

He observed that the cycle’s global low appeared when the market cap touched delta cap, suggesting its potential effectiveness as a floor indicator.

Two years later, Will Climente decided to multiply that floor indicator by different numbers and saw that a 7.5 multiple successfully clipped the market tops of 2011, both in 2013 and 2017.

And thus, the Bitcoin Delta Valuation Model was born.

Bitcoin Delta Valuation Model: Frequently Asked Questions

How high will bitcoin go?

According to the Bitcoin Delta Valuation model, the price of bitcoin will reach $114,000 in the current cycle. This model examines multiples of bitcoin’s delta cap, an on-chain metric commonly used to determine cyclical bottoms.

Why does the Bitcoin Delta Valuation model use the number 7.5?

The 7.5 multiple best fits the peaks of prior bull markets when back-tested. It’s an arbitrary multiple used to create price levels on top of the delta cap floor indicator. Other significant price levels can be created by experimenting with delta cap multiples.

Bottom Line: Bitcoin Delta Valuation Model

The Bitcoin Delta Valuation model is like any other model — it works until it doesn’t.

Nonetheless, it provides some level of guidance in a market that can be tough to navigate.

Keep Reading:

This article is for informational purposes only. It is not intended to be investment advice.

Sean Graytok
Sean Graytok
Sean is a student of the financial and technology industry. He is interested in the people and companies who are driving the innovation that will change our future.