Bitcoin ARIMA 7-Day Forecast 1-19-2024

Despite all of the hype surrounding the Bitcoin ETFs, the price has not responded the way many on social media believed it would. Instead of a wall of cash coming into Bitcoin ETFs and lifting the price, the opposite happened as the price failed to close above $49,152 followed by a decline to $40,297.46 as of January 19, 2024. So, what should we expect over the coming days for the Bitcoin price?

One way we can help sort out what could happen with the Bitcoin price is to look at the Bitcoin ARIMA 7-Day Forecast. If you're interested in running the code yourself to see how it works, you can download Kinzcode's code. After running the code, here are the results.

A Forecast With an $11,000 Spread is not Very Useful

Of note is the $11,000 spread between the bottom and the top of the 95% Confidence Interval for the Bitcoin price over the next seven days. That large spread reflects the volatility of Bitcoin but also means that the forecast is not very useful.

A somewhat better forecasting tool is the Bitcoin Prophet Forecast utilizing Facebook's open-source software.

This model is attempting to forecast 60 days out. The further out the forecast goes the wider the spread between the top and bottom of the uncertainty interval. However, the spread in the uncertainty interval is closer to $5,000 or $6,000 as you move closer to the current date. You may have noticed that the Bitcoin price recently dipped below the bottom of the forecast. This is fairly common with prices rising and falling above and below the forecast channel over time. More interesting, is adding a 20-period Bollinger Band to our forecast.