Bitcoin’s “Never Look Back Price” was introduced by Timothy Peterson, founder of Cane Island Alternative Advisors. The metric measures the last price that bitcoin reached and never returned to.
When plotting the ‘never look back price’ on a log scale using the square root of time on the x-axis, the data shows bitcoin’s upward trajectory has remained intact for about a decade. Bitcoin’s never look back price is displayed below.
Source: Cane Island
The red lines are the error bars and gives an idea of the typical variation in the price of bitcoin over time. The lower error bar is a proxy of the price floor for bitcoin. If an investor bought bitcoin at the lower error bar, they would have never lost money if they had a long time horizon for their investment. The longest time horizon an investor needed to make a profit from buying in at the floor price was just 61 days.
While the model is not predictive and cannot give a never look back price for the future, it does represent a floor value for bitcoin. While the never look back price is $6,925 at the time of writing, it does tell us that a move to $1,000 is not reasonable based on the historical data. As Peterson puts it, “Bitcoin’s Never Look Back price is a picture of bitcoin adoption.”
How to Calculate the Never Look Back Price
To calculate the never look back price, you must start at the earliest date of the bitcoin price. Going forwards in time, find the lowest price from that date until the current date. For example, the earliest date bitcoin was traded is July 19, 2010. If we go along from this date until the present, the lowest price is $0.05, which occurred on July 25, 2010.
We record $0.05 for July 19, 2010 and then advance to the next day, July 20, 2010. This is repeated until you get to the price at which bitcoin has never looked back. Currently around $6,925 - which was last reached in November 2019.
The never look back price is then plotted against the square root of time, where the first day is the square root of 1, the second day is the square root of 2 and so on. Day 70 on the chart of the never look back price will actually be day 4,900 (since 70 squared is 4,900). Peterson explains his reasoning in another article called Bitcoin Spreads Like a Virus.
You can find a live version of the never look back price here.