Bitcoin price cycles

[uki]

I have highlighted what might correspond to areas A and B in the charts, though its not clear.  In fact A and B might not be distinct enough, but rather may be the same part.  Doesn't really matter.  What it would suggest is we still may have a sudden, short-term dip (C) upcoming, somewhere into the low-mid $300s., which would be followed by a rise to above the previous high point of this cycle.  At this point, cycle 3 is looking more like cycle 1 than cycle 2.

Well, and there it is, I would say.  The corresponding points are getting more clear, although I would still say A (if it really is a trend) is harder to match.  However, we seem to have clearly just hit point C.  If so, this would indicate upcoming is a rise, followed by another relatively flat period.
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Thanks a lot for a nice update. I haven't visited your thread for a longer while and now it seems the picture is slightly more clear than about a month ago. The next 50 days will be crucial for the whole story, if the original cycle (or scenario A) is to play out. As I wrote in one of the early posts in this thread, I wouldn't necessarily expect a ten fold increase from where we just are ($3500-4000), as the sign of the cycle confirmation. Instead, I would expect the price to peak at around $2k (ten fold increase within the cycle - see one of my posts on the first page).

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[hacknoid]

Thanks a lot for a nice update. I haven't visited your thread for a longer while and now it seems the picture is slightly more clear than about a month ago. The next 50 days will be crucial for the whole story, if the original cycle (or scenario A) is to play out. As I wrote in one of the early posts in this thread, I wouldn't necessarily expect a ten fold increase from where we just are ($3500-4000), as the sign of the cycle confirmation. Instead, I would expect the price to peak at around $2k (ten fold increase within the cycle - see one of my posts on the first page).

Yes, and I am inclined to agree.  Both the peak at point B and the "heartbeat" at C have been less intense than previous cycles, so the next peak could quite likely be less proportionally.  I also think the ongoing blocksize drama will help mute any price rises as well (though not defeat them entirely).

[darkangel11]

What if we added 2014 in here? Would they match? If not then why? Asking because you took 2010 and 2012 as indicators and then skipped 2 years instead of 1.

[NorrisK]

What if we added 2014 in here? Would they match? If not then why? Asking because you took 2010 and 2012 as indicators and then skipped 2 years instead of 1.

As far as I know, 2014 is right in the middel of the Nov 2012 - May 2015 graph..

Also, it is a 900 day graph, which would indicate that it covers around 2.5 years, which would indicate that 2014 is covered.

[hacknoid]

What if we added 2014 in here? Would they match? If not then why? Asking because you took 2010 and 2012 as indicators and then skipped 2 years instead of 1.

As far as I know, 2014 is right in the middel of the Nov 2012 - May 2015 graph..

Also, it is a 900 day graph, which would indicate that it covers around 2.5 years, which would indicate that 2014 is covered.

Yes - the graphs are continuous - the next cycle begins immediately after the previous one ends.

It may not be clear since I just realized I cut off the right side of the picture with the legends on it (I'll correct it for next time); the three cycles are:

1) June 2010-Nov 2012
2) Nov 2012-May 2015
3) May 2015-Jan 2016

[rekinthis]

(Note: This is a follow-on thread to my original one about price cycles; however, as I have re-analyzed things, I think at this point it deserves a new starting point.  See that thread for more background.)

I have been looking at trends in the Bitcoin price for a while now, and I've been noticing something, which I will detail below.  I think what I am seeing is the result of a couple of things:

• Bitcoin is a unique ecosystem.  It has arguably been allowed to grow organically, and as such I think the price is exhibiting some natural cycles, not unlike what you would find in nature in cycles of sunspots, plant shapes, sea shells, tree rings, etc.
• Price is, of course, driven ultimately by people.  Now, individually people's behavior is almost impossible to predict, but in large groups, certain fundamental patterns will exist.  Basic human emotions such as fear and greed are behind a lot of it, but regardless of exactly why it is, people can be somewhat predictable in large groups, not unlike animal herds or insect swarms.

With that in mind, I looked again at the price of Bitcoin over time, and tried aligning some of the peaks in price.  Previously this wasn't overly successful (although some general similarities showed up), but this time i though I would see what would happen if I looked at a full cycle between the peak in June 2011 and that in November 2013.  It turns out that there is about 903 days between those peaks, so I am going to round this to 900 and plot the data.  Observe:



All of a sudden there is clearly some repetition to the price cycles.  The scale is different, of course, but the trend is up, and the major events correlate quite well.  Know what else?  That 900 cycle divides neatly into 3 phases of 300 days each:



Each of those phases is marked by some clear trends, which has repeated each time.  (And yes, I know we would only be in the third cycles, but at least now, if the concept holds, behavior can be seen in the previous 2 cycles).  I'll break each down below.  Note that a 300 day phase is about 10 months, which is quite a long period of time in Bitcoin.  Here are the same graphs in linear scale, each on their own graph:







Phase 1: Initial runup
This phase is marked by a generally level or rising trend in the price, with one or two distinct jumps in price.  Note that the price run ups, as has happened with every major price increase, are followed by a fibonacci retracement, but in each case ends up higher than before the runup began.  In each cycle, Phase 1 ends with price being about an order of magnitude higher than at the start of the phase.  (Cycle 1 Phase 1 I didn't get the data for the first 40 days or so; doesn't really have much impact, and with such as low price and relatively low number of people trading, I wouldn't bet a lot on it's worth.)

Phase 2: Long phase exponential increase with more volatility
Each of the major runups in the two previous cycles (one in each) has been another order of magnitude increase or more, followed by a retracement valley and then up again before the phase ended.  The end of the cycle has been between about 6x and 10x higher than the start.

Phase 3: Volatility and instability
The least predictable of the 3 phases.  Cycle one showed a general increase over time (~50% increase), while Cycle 2 had a drop-off of about half.  Note again that this is over 10 months, so while a long slow decline is painful, it's not that bad in comparison to the overall trend.  Interestingly, there is a "hiccup" in Phase 3 of each of the two cycles, occuring at almost the same time (about 2/3 of the way through the phase).

What drives all this?  I'd characterize Phase 1 as showing pent-up demand (and maybe fading memories) about the last major increase, which, by this time, would have been well over a year before (previous Phase 2).  Phase 2 shows confidence gained from Phase 1 resulting in increased demand.  Phase 3 shows some shakiness in the confidence and basically is a "rebuilding" phase.  All these things are probably affected greatly by media attention, which also (I suspect) goes in cycles. 

As I said above, I think people's behavior as a group follows trends, even if individuals' behaviors are not predictable.  It is the individual volatility, such as the implosion of Mt. Gox and the clamp down by China (both back in 2014) that is trying to break trends and cannot be predicted.

What does it mean going forward?  Maybe nothing.  I'll say again, as I did before, that past history does not predict future performance.  However, look at the points and trends which correlate between those two previous cycles.  That's a lot of coincidences.  The cycling also predicts that before March of 2016 we should have expected at least one or two major price spikes.  We had one this month; if the cycle holds, there will be at least one more before March 2016.  Note also that the halving occurs part way through Phase 2 of this current cycle, which is widely expected to drive price up. 

So maybe there is something.  Maybe not.  But I have been getting tired of all the meaningless posts lately and wanted to post something new.

Oh, and if you are into numerology, there are a lot of "3"s in this analysis!

Disclaimer: I'm tired, and am not going to proofread this post now.  Have a good night, all.

of course it is, funny how you name it, "ecosystem",well, i noticed that too, that everything repeats

like pumps and dumps, if we have pump we will have dump soon, and if we had dump, we will get pump soon, same cycle all the time, it makes bitcoin even predictable sometimes

[bit1]

Interesting, So that the finish of the last period will be on Jan or Feb 2017. However could be interesting see too as will be the impact of the halving on it.

[josegines]

@hacknoid, you have planned to update the graph? We are at the beginning of phase 2. If the scenario is repeated, the exponential phase is imminent.

[hacknoid]

@hacknoid, you have planned to update the graph? We are at the beginning of phase 2. If the scenario is repeated, the exponential phase is imminent.

Thanks for the "nudge"... I've been sidetracked by other things recently, but I was thinking it was time to update.  We have indeed begun the next phase, so I'll update the chart soon to see what it looks like.  It's been pretty quiet in the price range, although not unexpectedly. 

[hacknoid]

So, here are the updated graphs for March 2016:



and the image with what I see as the corresponding sections highlighted:



It clearly looks to me like we have been in D for a few weeks now, which is a period of relative stability and horizontal movement, after the sudden short volatility of C. (Note D is also preceded by a small run-up in each case; this time, it was the jump from about $370 back in February.)  If things continue, we should expect a noticeable rise over the next few months, possibly to new ATHs.

For reference, here are the other graphs:

[hacknoid]

I should point out that the relative increases are indeed continuing to drop;

Cycle 1 Phase 1 : start: $0.01, max: $1.06 (106x), end: $0.79 (79x)
Cycle 2 Phase 1 : start: $12.06, max: $214.86 (17.8x), end: $127.26 (10.6x)
Cycle 3 Phase 1 : start: $240.26, max: $461.49 (1.9x), end: $405.06 (1.7x)

Also note that in Cycle 2 Phase 1 we went to a new ATH; we did not repeat that this cycle, so exactly how high we go this time is very much up in the air.  However, I do believe a price rise will be incoming (especially with the halving coming up).

[josegines]

if pre-halving hype, you should not take a long time startup. It would be interesting to be repeated again for the third time cycle.

[kehtolo]

Interesting thread. I'm posting so i can keep an eye on how this develops.

[talks_cheep]

If you look hard enough, you will see cycles and patterns EVERYWHERE. So many desperate people on the forum are willing to grab straws to hang on to their dreams. Folks, bitcoin will never see 1000 ever again. Most it will get to is 600. The days of rocketing to the moon are long over. Think about it: mining has been centralized to a few Chinese mining factories, market has been taken over by professional manipulators, bitcoin fundamentals have been shown to have too many weaknesses, bitcoin core developers have no leaders and no vision, bitcoin community has never been more disjointed, etc... It's over, folks.

[lumeire]

If you look hard enough, you will see cycles and patterns EVERYWHERE. So many desperate people on the forum are willing to grab straws to hang on to their dreams. Folks, bitcoin will never see 1000 ever again. Most it will get to is 600. The days of rocketing to the moon are long over. Think about it: mining has been centralized to a few Chinese mining factories, market has been taken over by professional manipulators, bitcoin fundamentals have been shown to have too many weaknesses, bitcoin core developers have no leaders and no vision, bitcoin community has never been more disjointed, etc... It's over, folks.

Which is why you're here is it?

It's bitcoin, anything can happen in this space.

[kehtolo]

If you look hard enough, you will see cycles and patterns EVERYWHERE. So many desperate people on the forum are willing to grab straws to hang on to their dreams. Folks, bitcoin will never see 1000 ever again. Most it will get to is 600. The days of rocketing to the moon are long over. Think about it: mining has been centralized to a few Chinese mining factories, market has been taken over by professional manipulators, bitcoin fundamentals have been shown to have too many weaknesses, bitcoin core developers have no leaders and no vision, bitcoin community has never been more disjointed, etc... It's over, folks.

Quite the fucking pessimist, aren't you, sir?

[LMGTFY]

If you look hard enough, you will see cycles and patterns EVERYWHERE. So many desperate people on the forum are willing to grab straws to hang on to their dreams. Folks, bitcoin will never see 1000 ever again. Most it will get to is 600. The days of rocketing to the moon are long over. Think about it: mining has been centralized to a few Chinese mining factories, market has been taken over by professional manipulators, bitcoin fundamentals have been shown to have too many weaknesses, bitcoin core developers have no leaders and no vision, bitcoin community has never been more disjointed, etc... It's over, folks.

Have thought about it. Apart from casual racism, what's the actual problem with this? We've had (non-Chinese) mining pools approaching 51% before (I can't remember, but I think ghash.io may even have passed the 51% mark?) and miners responded by moving to other pools. This Sinophobia only seems to work if we suspend disbelief and assume that the vast majority of miners are (a) also Chinese, and (b) will put national identity ahead of rational self-interest. (Incidentally, you seem to be conflating "miner" and "pool" - I assume that was just an accident).

PS. Not sold on the idea that "professional manipulators" are a new phenomenon - or even a serious one, though I realise that a lack of belief in the mystical powers of cetacea marks me as an iconoclast on BCT.

[hacknoid]

If you look hard enough, you will see cycles and patterns EVERYWHERE. So many desperate people on the forum are willing to grab straws to hang on to their dreams. Folks, bitcoin will never see 1000 ever again. Most it will get to is 600. The days of rocketing to the moon are long over. Think about it: mining has been centralized to a few Chinese mining factories, market has been taken over by professional manipulators, bitcoin fundamentals have been shown to have too many weaknesses, bitcoin core developers have no leaders and no vision, bitcoin community has never been more disjointed, etc... It's over, folks.

I don't really see why people hype so much about centralization of mining by a certain group, as long as there is no 51% attack.  You really think that anyone who purchased the equipment for a big mining farm has anything in mind except for maximizing their profit?  If Chinese bitcoins double in price, so do yours!  They are all the same thing.  And if they are just a big pool, well - even less to worry about.

As for the patterns, see my comment here.

PS. Not sold on the idea that "professional manipulators" are a new phenomenon - or even a serious one, though I realise that a lack of belief in the mystical powers of cetacea marks me as an iconoclast on BCT.

  Thanks for that... that comment made my night!

[Vastraint]

I don't really see why people hype so much about centralization of mining by a certain group, as long as there is no 51% attack.  You really think that anyone who purchased the equipment for a big mining farm has anything in mind except for maximizing their profit?  If Chinese bitcoins double in price, so do yours!  They are all the same thing.  And if they are just a big pool, well - even less to worry about.

If a pool has 51% of the whole network and it is taken down, the the attacker needs just 25% of the hash rate to attack the network.

[hacknoid]

April 2016 updated graphs:

Cycle chart:




With highlights:




Just cycle3 so far (linear scale):




And for reference, the first two full cycles (linear - different scales):





As cycles go, we should be reaching the end of section D very soon.  If previous cycle trends hold, the next thing would be another rise.  This corresponds nicely to the halving which is upcoming (~3 months from now).