Despite being hopeful, ChatGPT can’t tell when Bitcoin’s price will hit $30K again
Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion.
AMBCrypto recently reported how the month of August was somewhat of a bloodbath for Bitcoin [BTC] as it was rife with FUD and negative sentiment. This caused the coin to shed 10% of its value in the past 30 days.
Recent legal victories gave a respite to the crypto world, with BTC floating above the $27K-price mark for a few days. But that enthusiasm soon died down, with token prices plummeting. At press time, BTC was trading at $25,767.
The king coin earlier soared as high as $31.7K within a day of Ripple [XRP] securing a partial victory in its legal battle with the U.S. Securities and Exchange Commission (SEC) on 13 July. But it failed to sustain the price rally.
The U.S. District Court of the Southern District of New York ruled in its judgement that the sale of Ripple’s XRP tokens on crypto exchanges and though programmatic sales did not constitute investment contracts; hence, it is not a security in this case. But the court also ruled that the institutional sale of the XRP tokens violated federal securities laws.
The crypto industry lapped up the judgement instantly, generating a price rally across tokens.
We should also note that in June, the SEC approved the first leveraged Bitcoin futures exchange-traded fund (ETF), namely the Volatility Shares 2x Bitcoin Strategy ETF (BITX).
The SEC has also accepted spot BTC ETF proposals from major traditional finance (TradFi) firms for review, including BlackRock, Bitwise, VanEck, WisdomTree, Fidelity and Invesco.
London-based Jacobi Asset Management recently announced the launch of its Bitcoin ETF in Europe.
Observers look at these developments as institutional approval of cryptocurrency.
Read Bitcoin’s [BTC] Price Prediction 2023-24
For a long time, the crypto’s price hovered between $200 and $1,000 on the price charts. However, in late 2017, BTC’s value exploded, hitting an all-time high (ATH) of nearly $20,000 in December.
Though market participation grew, the price rally was short-lived. By early 2018, BTC’s price had fallen back down to around $3K. The cryptocurrency market as a whole recorded a period of decline, with many traders losing significant amounts of money.
Nonetheless, Bitcoin made a remarkable recovery, surpassing its previous ATH in late 2020 and reaching an ATH of over $68K in November 2021. However, the 2022 trading year ushered in a new era of bearishness, one exacerbated by the collapse of Terra/LUNA and FTX. In fact, in November 2022, Bitcoin was trading at a two-year low of $15K.
While the crypto market may be unpredictable and volatile, traders and investors can still make informed decisions by staying up-to-date on market news, following expert analysis, and using intelligent trading strategies, such as those offered by ChatGPT.
ChatGPT: A messiah that can help you trade better?
In November 2022, the AI model ChatGPT was launched to the public. In fact, it quickly gained significant attention, too. With its broad range of capabilities and versatility, the question arises whether there are other ways that ChatGPT can lend its expertise, such as assisting BTC traders in formulating and applying improved trading strategies.
When asked if it could do this, ChatGPT had this to say –
Source: ChatGPT
Due to its nature as an AI tool, there are limitations to what ChatGPT can do regarding price predictions and price future movements. However, there are ways to leverage the tool’s capabilities to formulate better trading strategies as a BTC trader.
One way to utilize the AI tool to make better trading strategies is by deploying it toward fundamental analysis. ChatGPT is capable of extracting insights from financial news articles, social media posts, and other unstructured data sources. We can use this information in conjunction with other datasets to make informed trading strategies.
Another way to use ChatGPT as a Bitcoin trader is to use it for sentiment analysis. ChatGPT can be fine-tuned to perform sentiment analysis on information from news articles, on-chain data providers, social media discussions, and other sources. This can be used to identify whether the BTC market lingers under positive sentiment or is plagued by negative sentiment.
Furthermore, BTC traders can use ChatGPT for technical analysis. Traders can ask ChatGPT to code any technical indicator or trading bot for any trading platform.
For instance, I asked ChatGPT to give me an example of a trading bot that I can use to track BTC’s price volatility in pine script–TradingView’s programming language is useful for back testing trading strategies. The AI responded,
Source: ChatGPT
To use ChatGPT for technical analysis, traders need to be familiar with the language to know when to make the necessary modifications for the code to work properly. The prompt text is crucial in how ChatGPT understands the problem and provides the anticipated solution.
Is your portfolio green? Check out the BTC Profit Calculator
For a well-rounded piece, I spoke to Brian Quinlivan, the Director of Marketing at Santiment, who also happens to have been involved in Bitcoin trading for a few years.
Brian Quinlivan has an MBA degree in finance from Chapman University, Brian has over 10 years of marketing, financial, and data analytics experience. He enjoys creating financial models to improve modern-day investing strategies and study the intricacies of market variations.
Q: In what ways do you think ChatGPT can revolutionize cryptocurrency trading?
Yeah, I think that there’s going to be a lot of use for it, certainly for trading strategies. One thing to be concerned about is the uniform opinions that may result from an AI tech giving a kind of overarching strategy, whether it be hodling or fundamental strategy.
Individuals can easily manipulate ChatGPT to (mis)inform the audience. We are already seeing slight effects of it.
I think it can be both helpful and dangerous at the same time and cause a lot of people to be educated much more quickly, but also be pulled in directions that can influence the way crypto goes and create a lot of self-fulfilling prophecies.
Q: How do you think a BTC trader/investor can leverage the AI tool to make better investment decisions?
I think, in short, I think scripts would be used in AI a lot more because of the fact that all of the data could be digested at the same time and given a very simple answer whether to buy or sell. This, I believe, can influence the markets tremendously moving forward.
When will BTC hit the $30K-price mark, if it will?
As mentioned above, ChatGPT cannot make future predictions.
To get it to answer my question, I decided to jailbreak it by using the Do Anything Now (DAN) method. It says that it can take BTC 12-18 months to cross the $30K-price mark.
Source: ChatGPT
I further quizzed the AI technology on Bitcoin prices between 2023 and 2024.
Source: ChatGPT
The AI bot predicted BTC to potentially hit $80K-$120K within these two years.
In early June, the SEC began its crackdown on Binance and Coinbase, leading to a bearish market. In such a situation, BTC has shown its resilience so far.
At press time, BTC was trading at $25,767. Investors are hoping that the token will at least reach the $30k-price mark again.
While BTC’s Relative Strength Index (RSI) rested above the neutral 50-mark, its Money Flow Index (MFI) rested much below it. Its On Balance Volume (OBV) also showed a downtick.
Source: BTC/USD, TradingView
As of now, BTC’s on-chart metrics don’t indicate a price rally.
ChatGPT might be right
ChatGPT predicts that BTC will reach surprising heights. It expects the coin to break new all-time highs during 2023-24 due to its increased adoption (by companies and institutions) and as BTC’s appeal as a hedge against inflation grows.
The AI bot expects BTC to hit $80K-$120K during 2023-24. However, its on-chart metrics don’t encourage us— at least in the short term.
However, it is trite to note that increased regulation and government scrutiny could spread FUD, causing its price to dip.
