Global M2 Can’t Predict Bitcoin Price, Says Quant Analyst

SINA- Institutional founder of the 21st Capital-the famous Bitcoin price model promoted by the CEO of Real Vision Raoul Pal, describing it as a case of a textbook of data illiteracy and data.

The concerned model draws a close relationship between Bitcoin and Global M2 – which is a scale for displaying global money – by converting M2 data forward by a specific number of weeks, usually from 10 to 12, to “prediction” by “Future Prices for Bitcoin. Critical expansion.

Fland Experts M2-Bitcoin

But Cena, a coach’s data world, teaches data analyzes at the level of university level and graduate studies, He says This model collapses under check. “This is a terrible failure not to understand the involvement,” he said in a video on June 24, which was posted on X.

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Cena notes that the apparent relationship between Bitcoin and Global M2 exists only because the data was “tortured” to suit historical patterns. He said: “If I am allowed to play with data and transfer things arbitrarily, I can definitely find great matches between data pockets,” warning that this flexibility is exactly what allows analysts to create an illusion of prediction accuracy.

He explained that the main issue is that the global M2 data itself is defective in nature. They are assembled by hitting different M2 numbers for central banks by exchange rates-with fast-notified economies such as the United States with countries that have delayed data from weeks or even months. This creates a misleading impression of daily fluctuations in global liquidity. “It seems that he is moving on a daily basis, but it is actually mixing frequent and rare updates,” said Sina. “It is not a real sign.”

More importantly, Sina argues that the model fails at the moment when one of the selective plans comes out. While Raul Pal and others have presented examples of tightly alignment peaks, the bitcoin and Global M2, SINA has shown how minor adjustments in time or scale can significantly make different results. He said sarcastically: “Let’s try progress for 80 days. This doesn’t look good. What about 108? Oh, now, peaks are compatible – so let’s deal with them again and pretend that she is working.” “This is not modeling. This plays.”

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He highlighted how each modification of the model-from 12 weeks ago to 10 weeks, was expressed to 108 days-his lack of systematic basis. “If you don’t have a suitable model, you fail to predict the future,” Sina said. “This is a classic that is to force the data to match the historical behavior, but you lose any generalization.”

To clarify the concept, Sina compared the installation of a curve through a noisy pocket wave. A well -organized model picks up the basic style and ignores noise. On the contrary, the Overfit Found model tries to match all small fluctuations – which leads to poor predictive performance when new data reaches. He said: “Sweet coverage seems better, but it enhances noise. Noise is not repeated.”

Sina also wondered whether bitcoin might actually lead to liquidity, and not follow it. He said: “If you look at the last session, I top Bitcoin first. This reflects the causality involved in the global M2 model and requires that it question its entire assumption as an aspiration tool.

His conclusion was explicitly: “You should be very careful in getting involved. It seems identical, but it is appropriate for the strength of historical data. You have no idea of ​​the prediction accuracy of this thing.”

At the time of the press, Bitcoin was traded at $ 106,952.

Distinctive image created with Dall.e, Chart from TradingView.com