Monthly Price Speculation: Ignore Your Intuition and Trust the Math

Geoffrey Miller
Geoffrey Miller
Monthly Price Speculation: Ignore Your Intuition and Trust the Math
Table of Contents
Table of Contents

If the price of ICP dips below $10 USD, and especially if the price reaches $5 USD, in my opinion, it will be difficult for the Internet Computer to recover. Even the best technology needs funding, marketing, and popular adoption to succeed.

Don't Fix What Isn't Broken

In my previous article, I went against good forecasting practices.

Rather than sticking with the past 90 days of price data and a model that had been performing well, I adjusted the model to align with my intuition that the market had entered a recovery phase. If I had instead kept my original model unchanged, it would have predicted our present reality: $12 USD ICP at the end of April, with the possibility of further declines.

Lesson learned.

A model shouldn't be abandoned or altered simply because its forecast seems counterintuitive. To deserve correction, the model must produce an inaccurate forecast. So from now on, I'm going to ignore my intuition and simply trust the math.

Ignoring my intuition goes for considering outside factors as well. Nothing thus far, from the conflict in Ukraine to floor prices falling on Entrepot, has had a predictable impact on ICP price. With so many world events going on that could have intractably complex implications for the market, the only reliable, truly knowable data we have to work with for forecasting ICP price is past price performance. Therefore, that's the only data source my model will use.

Short Term Price Prediction

Without further fanfare, here's your 30-day forecast, starting from May 7, 2022. The 30-day forecast uses the AAA version of the Exponential Smoothing (ETS) algorithm on the past 90 days of ICP price data, accounting for seasonality.

Why is ICP Price Dropping?

I said that I won't let my intuition alter my forecasting model, but I have no problem speculating about why it's forecasting a continuing decline in ICP price. It's important to at least try to understand price trends, even if it's only possible to do so retrospectively right now. To know where we're going, it certainly helps to consider where we've been.

The Internet Computer's technology appears solid, but it is underdeveloped and under-marketed for a project of its size and scope. People are becoming increasingly impatient about delays in fulfilling roadmap milestones. Growing anxiety and resentment, with scattered points of briefly renewed hopes or FOMO, is the likeliest explanation of ICP's jagged journey downward. The ongoing conflict in Ukraine, the economic squeeze of inflation in the United States, and a bear market in cryptocurrency may also be exacerbating the downward price trends. Unless a major, positive disruption occurs, there's no end in sight yet to stagnant or declining cryptocurrency prices.

At this point, I think future investor confidence hinges on the effective and timely rollout of Bitcoin integration. If that doesn't happen by the end of the summer, ICP's course may be over. If the price of ICP dips below $10 USD, and especially if the price reaches $5 USD, in my opinion, it will be difficult for the Internet Computer to recover. Even the best technology needs funding, marketing, and popular adoption to succeed.

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