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Author Topic: Bitcoin price cycles  (Read 25087 times)
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June 09, 2016, 04:57:32 PM
 #161

I think that's true. But there's another principle at work: the larger something grows, the harder it is to keep growing.

Apple is a great company but it can't keep growing at the rate that it did when it was two guys in a garage, right? The market cap is too big.

Yes, this is absolutely right. Even Bill Gates thought Bitcoin could be a technological tour de force, however. If Bitcoin really is the new financial paradigm for the 21st century, a market cap in the single digit billions is going to be paltry. We might have another full cycle/bubble even AFTER the one we're in now.

Interesting... I didn't know about that.  At the beginning of this thread I likened the behavior to fractals we see in nature, so maybe this is indicative of the trend in finance (at least when artificial limitations have not been placed on markets).

Yes, however my models would put the fractal nature as also waxing and waning over time. One of the things people ignore is that while gold was $35/ounce in the 30s and was lower than that before then, if you keep going back to the times of the civil war, specifically 1864, the price rose over $40 at the New York listed rate before falling back into the 20 dollar range after the war. So yeah, ~150 years ago gold was actually higher than it was 85 years ago. Given the history of global reserve currencies going back to the 1500s, it's not uncommon to see the Spanish dollar replacing the Portuguese Real, French Livre replacing the Netherlands Leeuwendaalder, and etc. I'm guessing that as the currencies were moderately debased and replaced, there may have been a few decades of fractal turbulence in assaying value, too.

rpietila always said that trying to time the market will probably not work very well and that you should sell a certain percentage of your holdings whenever the price rises (e.g. sell 10% every time the price doubles) and just stick to that plan.  But he also said that if you really want to time the market, then it would be better to wait until after the initial crash than to sell too early. Tons of people who were holding coins from $5 ended up selling at $20 when the price was heading to $266.

rpietila's always seemed a bit odd to me in how he controls his own threads and sometimes posts about stuff that seems unrelated to simple matters of scarcity and supply & demand, but he's a more regular poster than some of the other older members are and this advice to wait after the bubble has definitely "popped" to sell is spot-on for any trader, IMHO. But even that is timing-related sometimes. Remember the price fell from $266 to $55 in about one day in 2013. Some observers might have freaked out and said "Oh god, the bubble is popping and I forgot to get out!". I get the impression the next major bubble is going to integrate bitcoin with groceries, bills, etc. however, so maybe you could base the bubble pop on AFTER a series of significant events have happened?

Each time I purchase I go a bit more longer term than the previous. I set up a fund for using my trading knowledge to make others wealthy in 2012 and in 2013 I had a chance to really take advantage of the swings, but I would have done much better had I just bought, held, then sold after the bubble burst. Here were the price points for those of you interested: I bought a significant amount of coin at $16 which I sold at multiple points including $37, $135, bought back again at $55 the day of the plunge, sold a bit at $85, and then sold a bunch right at the bottom of the dip in 2013 as well (to be fair, I had a down payment and needed it at the time) at $65. Bought some more off Gox again when it passed $110 again at various prices. My next sales were $780 and $1050, oddly enough.

My major problem with his advice on selling after it doubles is this: Suppose you own 1000 coin at $.10 basis... You would have sold 100 at $.20. 100 more at $.40. 100 more at $.80. Doubling in value is something we're going to have to get used to, because scarcity is a real thing. I have two models putting the price at $120k in two years or $60k in early 2021, but I don't think there's anyway we're not going to be seeing crazy numbers this time around eventually.

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June 09, 2016, 07:55:49 PM
 #162

rpietila's always seemed a bit odd to me in how he controls his own threads and sometimes posts about stuff that seems unrelated to simple matters of scarcity and supply & demand, but he's a more regular poster than some of the other older members are and this advice to wait after the bubble has definitely "popped" to sell is spot-on for any trader, IMHO. But even that is timing-related sometimes. Remember the price fell from $266 to $55 in about one day in 2013.

I think his idea was that you could wait for the first panic sell and then sell on the bounce. You're just trying to avoid the danger of selling at $10 or $20. Whether you manage to sell at $55 (unlucky), $65, $75, or $100, you're doing well.  


My major problem with his advice on selling after it doubles is this: Suppose you own 1000 coin at $.10 basis... You would have sold 100 at $.20. 100 more at $.40. 100 more at $.80. Doubling in value is something we're going to have to get used to, because scarcity is a real thing. I have two models putting the price at $120k in two years or $60k in early 2021, but I don't think there's anyway we're not going to be seeing crazy numbers this time around eventually.

The 10% is recalculated each time.

With your example, you'd sell 100 at $.20, and then you'd sell 90 at $.40. Then you'd sell 81 at $.80.

And you'd never completely cash out.

If you sold in this manner, even if bitcoin went to 1.67 million dollars per bitcoin, you'd still have 8.8629 bitcoin left.

You can see the whole progression here: http://imgur.com/aCVU1BD

It's pretty clever. You take all the guesswork out of it. And you would've been able to enjoy your profits the whole way up, having sold over 33 million dollars worth of bitcoin cumulatively.

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June 09, 2016, 08:51:43 PM
 #163

Hacknoid, great to see that your thread is advancing and you posted some new charts. Interesting times ahead of us. We will soon see whether the history repeats yet once more time. It should be clear in the next 50 days whether the pattern we observe is that one from cycles 1 and 2.

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June 09, 2016, 10:38:08 PM
 #164

The 10% is recalculated each time.

With your example, you'd sell 100 at $.20, and then you'd sell 90 at $.40. Then you'd sell 81 at $.80.

Okay, I got it now. That seems reasonable enough. Did he actually do that though? I thought I remembered hearing he had 2k and sold almost all of it near but not at the peak?

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June 09, 2016, 10:50:18 PM
 #165

The 10% is recalculated each time.

With your example, you'd sell 100 at $.20, and then you'd sell 90 at $.40. Then you'd sell 81 at $.80.

Okay, I got it now. That seems reasonable enough. Did he actually do that though? I thought I remembered hearing he had 2k and sold almost all of it near but not at the peak?

It was a suggestion for the newbies. He may have opted to swing trade, given his experience.




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June 12, 2016, 11:41:01 AM
 #166

hacknoid, can you post an updated chart? thanks man  Smiley
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June 12, 2016, 02:03:29 PM
 #167

Sorry I've been away from this thread for about a week now... Been laid up with a bad back so I couldn't even get to the computer! I'll post replies... Probably tomorrow.

Cheers

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June 12, 2016, 02:32:13 PM
 #168

I hope the last (critical  Grin ) 24 hrs chart action will help that bad back feel somewhat better man!

The next 24 hours are critical!
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June 13, 2016, 12:16:04 AM
 #169

I hope the last (critical  Grin ) 24 hrs chart action will help that bad back feel somewhat better man!

^^^ what he said ^^^
Very anxious to see updated chart. I know nothing about TA but I've been glued to this thread! Very interesting and I'm wondering if I should indeed attempt to load up my cold storage coffers a bit at this price. I share in the earlier statements of being "bitcoin numb" and would add that those feelings are mixed with the all too familiar FOMO. It's a "crypto-speedball" lol. I prefer to buy and hold, as trading is too much anxiety for me.
 Sending positive vibes and I hope you feel better. I also hope you're really onto something, and to say all your hard work is appreciated is truly an understatement!
Great job buddy! Smiley
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June 13, 2016, 10:23:46 AM
 #170

There are definitely some bitcoin price cycles going on but it does take some figuring out to find out the exact patterns. But one of the most obvious ones is a huge pump before the halving, and perhaps an adjustment after halving.

If you can get hold of these cycles, you can make some seriously money.

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June 13, 2016, 10:33:17 AM
 #171

congratulations, we are seeing the expected rise.
Foul see if we ATH.

On the negative side, I worry that after a few days of rise, we have to wait 900 days to see a new high.

Translated means congratulations to those who bought a year and a care makes those who buy now, because at any moment we will have the maximum for the next 3 years


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June 14, 2016, 03:37:34 PM
 #172

OK, sorry for the delay.... here's the latest update on the graphs, for phase 2:



Up to this point, the trend has continued exactly as it did in the previous 2 cycles during this phase; a relatively flat period to start, followup by a sudden jump (indicated by the arrows), a small plateau, then the real takeoff.If (and that's a big if) the trend continues from here in the same way, then we should be heading much higher.  Note that I adjusted the vertical scale on the cycle 3 graph to better reflect both the relative height of increase as well as the resistance we faced at $600.

Here is the zoomed out view of the whole cycles (still on linear scale):


However, and i will say it again, these graphs are only showing what is currently happening as compared to previous times.  I absolutely cannot say that the price trend will go to new highs as in the past, only that the pattern looks the same.  I just don't want anyone to think I am trying to convince them to buy.  I still personally think there is room to go up, but who knows.

On the negative side, I worry that after a few days of rise, we have to wait 900 days to see a new high.

It may not be that bad.. it looks to be taking 900 days for the whole sentiment-cycle to repeat, but we also had some nice new highs previously in phase 1 (which is only about 500 days away Smiley )


BTW, my back is getting better - thanks for the wishes.  The fact that this past weekend all my previous bitcoin purchases are now positive relative to the purchase price, certainly helps things feel better.

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June 14, 2016, 04:10:57 PM
 #173


On the negative side, I worry that after a few days of rise, we have to wait 900 days to see a new high.

It may not be that bad.. it looks to be taking 900 days for the whole sentiment-cycle to repeat, but we also had some nice new highs previously in phase 1 (which is only about 500 days away Smiley )


Of course it's bad if shopping at a maximum price, ask the user who bought in nov / 2013 to $ 1000, it's been almost 3 years and still losing.

Of course it is bad buy in full bubble, the time to buy was months ago, now it's time to sell slowly.

Your study has been great to hold positions before this rise, now is the time to be very careful because if the two previous cycles is repeated, the fall is just as fast as the rise.

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June 14, 2016, 05:07:59 PM
 #174

I think in theory cycles, in the sense that the price peaks, both maximum and minimum, occur separated by a very similar time.

Cycle theory can not predict ATH or ATB, at least to my knowledge. We can only guess that there may be a maximum or a minimum when some time has elapsed since the previous.

However, your study goes beyond this cycle of 900 days and is very dangerous for people to think that we will see an ATH in the coming weeks, as your graphs indicate.

We must be very clear, as you have advised your last post, but even more.

If in the next few weeks we have an ATH, everyone happy, but everyone should be clear that there is no security, at least in this cycle ... maybe in the next.


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June 14, 2016, 05:44:44 PM
 #175

I think in theory cycles, in the sense that the price peaks, both maximum and minimum, occur separated by a very similar time.

Cycle theory can not predict ATH or ATB, at least to my knowledge. We can only guess that there may be a maximum or a minimum when some time has elapsed since the previous.

However, your study goes beyond this cycle of 900 days and is very dangerous for people to think that we will see an ATH in the coming weeks, as your graphs indicate.

We must be very clear, as you have advised your last post, but even more.

If in the next few weeks we have an ATH, everyone happy, but everyone should be clear that there is no security, at least in this cycle ... maybe in the next.



Very well put.  And yes, you are right - this sort of thing cannot predict how high the highs will be, or even IF it will reach a new ATH.  I hope it is clear I am not advocating that this definitely is a crystal ball - I certainly would not want to see people lose money by trying to use these past trends to buy and sell.

My point in proposing the cycles is to illustrate that I believe the price is reflecting user sentiment, and basic human trends, which do tend to operate in cycles.  There are many many factors at play in pricing, and I propose that in a "bull run" the sentiment is more positive, resulting in prices generally going up.  Bad news doesn't tend to have as much impact during these times, while good news can have more effect.  Similarly, after a price spike and then subsequent sell-off, sentiment tends to turn bearish, and it is harder for the price to keep up.

Given the timing and trends in the market, as well as news in global financial markets, it seems we are in a bullish phase, which tends to repeat in these cycles.  Hopefully that means prices go up from here, but all we need is another Mt.Gox or China ban event to trigger a change in sentiment.

And make no mistake - there will be corrections and sell-offs, regardless of whether the next high is $700 or $7000.  There will always be people that buy at or near the peak; use care, manage risk, and don't invest more than you could afford to lose.


Of course it's bad if shopping at a maximum price, ask the user who bought in nov / 2013 to $ 1000, it's been almost 3 years and still losing.

I did make some buys in 2013 when I too was struck by FOMO, at a price of around $800 (CAD).  It's taken from then until the last couple of days for those coins to be back at the price I paid for them.  I held onto them though, as I believed the price would eventually recover (and I wasn't so hard pressed for cash that I had to sell at a loss).


I prefer to buy and hold, as trading is too much anxiety for me.

That's my strategy too.  I average down when and if I can, and otherwise hold them long term.  I tried some other trading, but I always lose money at that.  Long term the trend has been a slow uptrend, and patience has worked out.  Nothing is guaranteed, but trying to buy on the expectation of short term gain is highly risky, despite what anyone might otherwise infer from my charts (or any other charts, for that matter).

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June 14, 2016, 10:03:51 PM
 #176

However, and i will say it again, these graphs are only showing what is currently happening as compared to previous times.  I absolutely cannot say that the price trend will go to new highs as in the past, only that the pattern looks the same.  I just don't want anyone to think I am trying to convince them to buy.  I still personally think there is room to go up, but who knows.

Thanks for giving the updates!

I have two models I've been using for my own pricing. Both of them are taking into account not only the magnitude of changes but also time period changes. You can see some of my predictions by going through my post history if any of you are interested.

I don't want to go into too much detail about my current system, but don't you think a price cycle should maybe take into account the following?
  • Total Shares Outstanding (or total coin outstanding)
  • Market Capitalization
  • Volume
  • Price
  • Time since previous ATH
  • Time since previous bottom
  • Change in magnitude of recent ATH to previous ATH

That's not to say spacing it out by 900 days is a bad idea, I'm just not sure if that specific trend can continue indefinitely. In fact, while some trends may be visible in hindsight, it might not always equate to a similar scale today. After all, where do you really start and stop? Do you completely ignore the time period before Bitcoin had a "price" of $0.10 as listed on Gox and was instead being sold primarily OTC? What if someone's model of off-chain transactions is better than yours? What about the Winklevoss twins having possibly portioned off most of their shares for ETF underwriting?

I have two models, one of which is eerily close to your 900-day one. I think the one that is not 900 days might be more accurate in the long-term, but it has been interesting watching this thread and how things unfold. Makes me hope I am wrong and the 900-day model is more accurate. If so, then it predicts over $10k by the end of next year which would be huge compared to waiting for 2020.

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June 14, 2016, 10:11:42 PM
 #177

However, and i will say it again, these graphs are only showing what is currently happening as compared to previous times.  I absolutely cannot say that the price trend will go to new highs as in the past, only that the pattern looks the same.  I just don't want anyone to think I am trying to convince them to buy.  I still personally think there is room to go up, but who knows.

Thanks for giving the updates!

I have two models I've been using for my own pricing. Both of them are taking into account not only the magnitude of changes but also time period changes. You can see some of my predictions by going through my post history if any of you are interested.

I don't want to go into too much detail about my current system, but don't you think a price cycle should maybe take into account the following?
  • Total Shares Outstanding (or total coin outstanding)
  • Market Capitalization
  • Volume
  • Price
  • Time since previous ATH
  • Time since previous bottom
  • Change in magnitude of recent ATH to previous ATH

That's not to say spacing it out by 900 days is a bad idea, I'm just not sure if that specific trend can continue indefinitely. In fact, while some trends may be visible in hindsight, it might not always equate to a similar scale today. After all, where do you really start and stop? Do you completely ignore the time period before Bitcoin had a "price" of $0.10 as listed on Gox and was instead being sold primarily OTC? What if someone's model of off-chain transactions is better than yours? What about the Winklevoss twins having possibly portioned off most of their shares for ETF underwriting?

I have two models, one of which is eerily close to your 900-day one. I think the one that is not 900 days might be more accurate in the long-term, but it has been interesting watching this thread and how things unfold. Makes me hope I am wrong and the 900-day model is more accurate. If so, then it predicts over $10k by the end of next year which would be huge compared to waiting for 2020.

Hey Raize,

Could you please elaborate more the part in bold please Smiley

If you don't mind for sure.

Thank in advance.

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June 14, 2016, 11:08:59 PM
 #178

Could you please elaborate more the part in bold please Smiley

If you don't mind for sure.

Two years ago I would have said no, but I'll go ahead and divulge some information for the hell of it since very few people actually take me seriously enough they won't likely act on my predictions.

That said, I need to preface this with the huge caveat that this should not be taken as sound financial advice. Invest at your own risk and I don't want to hear that anyone has taken out a second mortgage on their house to invest according to my estimates, but I do suppose there's some benefit in sticking my neck out with a prediction in case it does come true. One model predicts $10k by end of 2017, a second model predicted it by sometime in 2019/2020 (before the next halving most likely). The latter of the two models was my first one that I've been starting to think lately is too conservative. It is primarily based on the amount of time between the previous ATHs compared to each other and takes into consideration the magnitude of the price differentials as well. I'm not going to be extremely detailed, but I'll use some numbers to get the gist of it across. Remember that this first one is the model that I think is probably TOO conservative.

First high date: 07-18-2010
First high price: $0.09
First low date: 09-18-2010
First low price: $0.05
Number of days: 61

Previous high date: 06-08-2011
Previous high price: $31
Previous low date: 11-13-2011
Previous low price: $2
Number of days: 159

New high date: 11-30-2013
New high price: $1150
New low date: 1-14-2015
New low price: $160
Number of days: 411

First Time Factor: 159/61 = 2.61
Second Time Factor: 411/159 = 2.58

First Days Low till High: 263 days (09-18-2010 till 06-08-2011)
Second Days Low till High: 749 days (11-13-2011 till 11-30-2013)

Current Low Date: 1-14-2015
Estimated Third Days Low till High: (749/263) * 749 = 2133 days
Date Estimation: 1-14-2015 + 2133 days = 11/16/2020

First Price Factor $0.05 to $31 = 620
Second Price Factor: $2 to over $1k = 500

Current Low Price: $160
Estimated Third Price Factor: (500/620) * 500 = 403
Price Estimation: $160 * 403 = $64,480

If factor of price and time and the trend of those factors continues, that would be a value of ~$65,000 on or about Q4, 2020.

Now, here's why I think this is wrong...

Quarter to Quarter estimation from my raw ratios of the low compared to previous price swings:
Time   Price (High)   Price (Low)
Q1 2015   $317   $150
Q2 2015   $292   $190
Q3 2015   $486   $353
Q4 2015   $417   $340
Q1 2016   $370   $311
Q2 2016   $364   $326
Q3 2016   $356   $340
Q4 2016   $462   $362
Q1 2017   $628   $449
Q2 2017   $920   $628
Q3 2017   $862   $691
Q4 2017   $888   $711

Obscuring other data...

Q3 2020   $9,579   $8,319
Q4 2020   $14,478   $8,299
Q1 2021   $64,480   $14,289

After 2021 the bubble would be popping. At this point nearly every man, woman, and child in first world countries will know about Bitcoin and the subsequent bubbles will no longer be able to be multiple magnitudes more than the previous ones.

I was super-excited to watch the price increase almost exactly according to my numbers in Q3 2015 just as this chart had predicted, however I was not accounting for things like volume, total coin outstanding, and etc. Because of this, I was off on so many levels, but I still consider it a reasonable model, just not one I'd recommend a client use given what I know now. I think my numbers might also be close, but obviously the time-scale of them is "off".

My current model does see increases till ~$900 sometime this July-August and a decrease to low $700s shortly after in early Fall. It will then stay in that range into early 2017 with things picking up again after tax time (April) in 2017. From there it's basically a crazy ride till the end of the year when people take their profits in December over $10k. After that I'm not discussing what I predict and when, but I do think that on long-term scale the prospects are great. Smiley Good luck!

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June 15, 2016, 12:05:40 AM
 #179

Could you please elaborate more the part in bold please Smiley

If you don't mind for sure.

Two years ago I would have said no, but I'll go ahead and divulge some information for the hell of it since very few people actually take me seriously enough they won't likely act on my predictions.

That said, I need to preface this with the huge caveat that this should not be taken as sound financial advice. Invest at your own risk and I don't want to hear that anyone has taken out a second mortgage on their house to invest according to my estimates, but I do suppose there's some benefit in sticking my neck out with a prediction in case it does come true. One model predicts $10k by end of 2017, a second model predicted it by sometime in 2019/2020 (before the next halving most likely). The latter of the two models was my first one that I've been starting to think lately is too conservative. It is primarily based on the amount of time between the previous ATHs compared to each other and takes into consideration the magnitude of the price differentials as well. I'm not going to be extremely detailed, but I'll use some numbers to get the gist of it across. Remember that this first one is the model that I think is probably TOO conservative.

First high date: 07-18-2010
First high price: $0.09
First low date: 09-18-2010
First low price: $0.05
Number of days: 61

Previous high date: 06-08-2011
Previous high price: $31
Previous low date: 11-13-2011
Previous low price: $2
Number of days: 159

New high date: 11-30-2013
New high price: $1150
New low date: 1-14-2015
New low price: $160
Number of days: 411

First Time Factor: 159/61 = 2.61
Second Time Factor: 411/159 = 2.58

First Days Low till High: 263 days (09-18-2010 till 06-08-2011)
Second Days Low till High: 749 days (11-13-2011 till 11-30-2013)

Current Low Date: 1-14-2015
Estimated Third Days Low till High: (749/263) * 749 = 2133 days
Date Estimation: 1-14-2015 + 2133 days = 11/16/2020

First Price Factor $0.05 to $31 = 620
Second Price Factor: $2 to over $1k = 500

Current Low Price: $160
Estimated Third Price Factor: (500/620) * 500 = 403
Price Estimation: $160 * 403 = $64,480

If factor of price and time and the trend of those factors continues, that would be a value of ~$65,000 on or about Q4, 2020.

Now, here's why I think this is wrong...

Quarter to Quarter estimation from my raw ratios of the low compared to previous price swings:
Time   Price (High)   Price (Low)
Q1 2015   $317   $150
Q2 2015   $292   $190
Q3 2015   $486   $353
Q4 2015   $417   $340
Q1 2016   $370   $311
Q2 2016   $364   $326
Q3 2016   $356   $340
Q4 2016   $462   $362
Q1 2017   $628   $449
Q2 2017   $920   $628
Q3 2017   $862   $691
Q4 2017   $888   $711

Obscuring other data...

Q3 2020   $9,579   $8,319
Q4 2020   $14,478   $8,299
Q1 2021   $64,480   $14,289

After 2021 the bubble would be popping. At this point nearly every man, woman, and child in first world countries will know about Bitcoin and the subsequent bubbles will no longer be able to be multiple magnitudes more than the previous ones.

I was super-excited to watch the price increase almost exactly according to my numbers in Q3 2015 just as this chart had predicted, however I was not accounting for things like volume, total coin outstanding, and etc. Because of this, I was off on so many levels, but I still consider it a reasonable model, just not one I'd recommend a client use given what I know now. I think my numbers might also be close, but obviously the time-scale of them is "off".

My current model does see increases till ~$900 sometime this July-August and a decrease to low $700s shortly after in early Fall. It will then stay in that range into early 2017 with things picking up again after tax time (April) in 2017. From there it's basically a crazy ride till the end of the year when people take their profits in December over $10k. After that I'm not discussing what I predict and when, but I do think that on long-term scale the prospects are great. Smiley Good luck!

I would like to thank you so much for taking the time to write this post and going into details, much appreciated.

For me, don't worry, my strategy is so simple, buy and hodl, whatever we will reach $1K or $1M in the coming 10 -15 years, I'm here for the long haul.

Now, questions time as I'm confused.

1. Which model is the "too" conservative, once you said the later of the two models and once you said the first one ?

2. Your best model or the model you are working on is the one that estimates $10K at Dec. 2017, am I right ? If yes, then why would be reaching $60's K at 2020/2021 could be wrong ? What will stop the increase ?

3. I believe in the $60's K somehow because from the above numbers, the numbers seems to go exponential, and this is how Bitcoin behaves, am I wrong ?

Waiting to hear from you Smiley

Thanks again to take the time and effort to write the post Smiley

Quote from:  Satoshi Nakamoto
Feb. 14, 2010: I’m sure that in 20 years there will either be very large transaction volume or no volume.
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June 15, 2016, 03:32:44 PM
 #180


I don't want to go into too much detail about my current system, but don't you think a price cycle should maybe take into account the following?
  • Total Shares Outstanding (or total coin outstanding)
  • Market Capitalization
  • Volume
  • Price
  • Time since previous ATH
  • Time since previous bottom
  • Change in magnitude of recent ATH to previous ATH


It was brought up recently in this thread about the previous ATH being different in relative terms, due to the total number of coins in circulation at the time vs now.  I think it's possible that there may be a way to model expectations by trying to take into account the factors you mentioned above.  Certainly those are valid points in both of those cases, but that's not what I am really trying to show in my graphs.  As I said earlier, I think what the 900-day cycle shows is a reflection of sentiment towards bitcoin, as reflected in the price, but modulated by a whole bunch of external factors, including what happens in other markets (FOREX, stocks and bonds, etc.), news in the Bitcoin/crypto world, focus/attention on BTC or competing cryptos, etc.

At least to this point, there is no perfect model.  I have seen some really good short term TA (Klee's PnF seems to be working remarkably well), and that can focus on price, but longer term the price becomes difficult, if not impossible, to predict.  I am pointing out the trends that have occurred and seem to be repeating, but don't expect relative highs like previous cycles - they could be higher or lower, relatively speaking.  Look at phase 1: cycle 3 repeated the trend of cycle 2 remarkably well, but we didn't reach a new ATH.  However, the graph shares the same shape.

I read through your analysis, though I admit I don't follow it all; it certainly seems to have reasonable conclusions, but remember, ultimately what we and all TA is trying to do is predict the future.  Humans haven't been able to do this in any arena so far, although Nostradamus arguably has a pretty good track record, and Moore's law continues to hold up well.  But everything is subject to change at some point, based on whatever unexpected events may occur in the future.

I think looking forward to prices, the best we can guess is a range, as you have done, and I applaud that.  Hopefully nobody bets too much based on anybody's models. 


Quote
That's not to say spacing it out by 900 days is a bad idea, I'm just not sure if that specific trend can continue indefinitely. In fact, while some trends may be visible in hindsight, it might not always equate to a similar scale today. After all, where do you really start and stop? Do you completely ignore the time period before Bitcoin had a "price" of $0.10 as listed on Gox and was instead being sold primarily OTC?

I started looking at the trends back in 2014 when I was kinda bummed out by the price; at the time, I came up with various shorter-term models (~670 days) which matched well to that point, but began to break down as time went on.  Since that time, a 900-day cycle has matched (and continues to match) better.  It may not indeed be 900 days exactly, and it may vary from cycle to cycle.  A while ago rpetiela postulated a multi-year trend (2 years, IIRC), which does fall along my line of thinking as well.

The question about where to start a cycle is interesting, and one I struggled with.  I have already had to change the exchange I based my numbers on once (Gox was significant earlier, and since then Bitstamp is my source of numbers, and that may change again).  But there was value assigned before that... thing is, if the cycle length is correct, when exactly it started doesn't matter.  The up- and down-trends still match up, and the events occur ~900 days apart.  The earlier you start taking data from, of course, the smaller the sample size, so I wouldn't weight it too heavily.  I already don't assign too much value to cycle 1/phase 1, as the price was much more volatile and the market so much smaller.

Quote
What if someone's model of off-chain transactions is better than yours? What about the Winklevoss twins having possibly portioned off most of their shares for ETF underwriting?

As I say, I think the field is open to anyone's opinion; after all, this is the speculation forum.  I'm sure the Winklevii coins' status, as well as that of other large holders (Tim Draper, for example, or the BIT) have an impact on price, as they effectively affect market liquidity.  But even more so are the halvings.  They certainly affect price, but not instantaneously.  For example, there was no sudden doubling of price in Dec 2012, and there won't be next month.  However, as the number of new coins available to drop into the market decreases, there will be an effect - of that I am certain.  However, next month it could be less.  Dec 2012 we decreased the number of new coins per day by ~3600, next month we will decrease by ~1800.  In a market with so many coins trading each day, the effect will likely be smaller.  However, in a perfectly balanced market (reflected by a stable price), this could be enough to tip the scales up to a new balance point.  In a bull market the effect could be even more.

At the end of the day, the price reflects what someone is willing to pay for one Bitcoin.  Thus I am choosing not to try to account for these other things, but rather just watch how they affect the overall number.


Quote
I have two models, one of which is eerily close to your 900-day one. I think the one that is not 900 days might be more accurate in the long-term, but it has been interesting watching this thread and how things unfold. Makes me hope I am wrong and the 900-day model is more accurate. If so, then it predicts over $10k by the end of next year which would be huge compared to waiting for 2020.

Again, be careful - I am not trying to predict what the price will be, just pointing out the trend in price.  I have personal feelings on what the numbers may be, but that is just based on gut feeling and being generally hopeful and bullish about Bitcoin's future, rather than any sort of analysis of the graphs.

Thanks a lot for contributing to the discussion... certainly some interesting points you raised.  Let's hope the high ranges do pan out!

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