Solved Step by step with explanation of Bitcoin Forecasting Models

Question

The variable 'months' refers to the number of months that have passed. The first value of variable 'months' is the initial price of the Bitcoin. The variable 'price' refers to the average price of 1 bitcoin for that month in USD. This is a smoothing technique assignment where you have to forecast the value of bitcoins in USD using the different smoothing techniques. The overall data you have is for 32 months (starting index is 0, therefore 31 rows in total). Divide this data into train data (first 29 months) and test data (last 3 months). Please make sure that the train and test data is as per the instructions. Download the data, make your forecasts according to the models asked in the questions

Question:'

1635.2 USD and 615.75 USD

Answer

Solved Step by step with explanation of Bitcoin Forecasting Models

For the 30th month, the predicted value using the Naive Forecasting method would be the same as the actual value for the 29th month, which is 2420.7 USD.

Simple Average Forecasting:

Now, we can calculate the predicted value for the 30th month using the Simple Average method.

Predicted value = Average