2011 vs. 2013: The Definitive Comparison

[Zangelbert Bingledack]

(Starts of the bubble periods aligned; chart compares percentage changes)


Note three things about this log-scale chart:

• The 2013 bubble took three months to rise from $13 to $260
• The 2011 bubble took only two months to rise from the equivalent of $13 to about $550; that's more than twice as high in 2/3 the time
• Even though 2011 went much higher and faster, and even though it looked like the end of Bitcoin, the price bottomed out at the equivalent of about $35-40 - then promptly tripled and held rather steady

Conclusion: If this is a repeat of 2011...

1) There's no reason to suspect from comparison alone that we will bottom out below around $60, since there isn't nearly the excess to burn off that was there in 2011. According to the "Repeat of 2011" theory, it wouldn't be at all surprising if we already saw the bottom last week at $66.

2) We'll end up consolidating at $100 for quite a while.

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[ElectricMucus]

Again the timescales are different.

This is a scaling of 2.5


Tweaking it to match the mid bear-market crunch 11/13 would result in a even more impressive match.

[Spaceman_Spiff]

nice charts

[vokain]

What if we assumed 2013 won't be like 2011? 

[Zangelbert Bingledack]

Again the timescales are different.

This is a scaling of 2.5


Tweaking it to match the mid bear-market crunch 11/13 would result in a even more impressive match.

Credit for this idea of overlapping the charts goes to you, EM.

I maintain, though, that any comparison must be done on log-scale to be meaningful. As for tweaking the timescale, I have some reservations. I lean toward it being better to just compare them straight, as I did in the OP. For example, adjusting the timescales so that the bubbles match closer in terms of shape would distort how abrupt the 2011 run-up was compared to the 2013 one.

[Zangelbert Bingledack]

What if we assumed 2013 won't be like 2011? 

It probably won't, buy my goal here is to show that even if 2013 were to somehow be "as bad as" 2011, things would still be pretty nice.

[ElectricMucus]

It's not me bringing that up though.

Anyway, here is yet another version, this time log scale and directly laying them on top of each other.



The basic elements are all at the same ratios, I don't know if it is possible to improve upon this, it might be that there is a different timescale ratio bear/vs bull market.
My first version was matched against the bull market correlation this time I looked for the bear market correlation.

I'm now waiting for some EW Guy to enlighten us. 

[MoreFun]

ElectricMucus why you don't show us the rest of the chart for 2011?

[ElectricMucus]

ElectricMucus why you don't show us the rest of the chart for 2011?

Because I just used a transparent layer in gimp and didn't want to mess with something else.
So because I'm lazy.

There isn't much to match it against anyhow since that hasn't happened yet.

[MoreFun]

Yea but we do not match two years to just find out if they match but if they match to be able to predict what is next this year. So key in the chart is how 2011 evolved in the following weeks.

[blueberry]

It's not me bringing that up though.

Anyway, here is yet another version, this time log scale and directly laying them on top of each other.



The basic elements are all at the same ratios, I don't know if it is possible to improve upon this, it might be that there is a different timescale ratio bear/vs bull market.
My first version was matched against the bull market correlation this time I looked for the bear market correlation.

I'm now waiting for some EW Guy to enlighten us. 

Your 2011 chart begins on May 24, 2011 when the price was at $7. The 2011 bull market began on April 11, 2011 when the price was around 70 cents. Therefore your 2011 chart is missing the initial 10x increase in price. Try again.

[ElectricMucus]

Yea but we do not match two years to just find out if they match but if they match to be able to predict what is next this year. So key in the chart is how 2011 evolved in the following weeks.

I recommend you don't fall for the trap of trying to predict the future based on correlation and intuition. For that you would need more sophisticated methods, like statistics which can provide you with a margin of error you can expect. Because if you leave out this step you can easily catch a bad trade. Intuitively one might think it's a good time to sell, but the case being is that the correlation might end at this point. Only if you have a system to estimate a risk of that happening you can expect a profit, otherwise it just remains gambling, strategic gambling but never the less gambling.  

[ElectricMucus]

Your 2011 chart begins on May 24, 2011 when the price was at $7. The 2011 bull market began on April 11, 2011 when the price was around 70 cents. Therefore your 2011 chart is missing the initial 10x increase in price. Try again.

Pay attention to the comments
As it seems there are different timescale ratios for the bull and bear markets each 2011/2013 respectively. I looked for correlations in the bear market not in the bull market, which was done above.
I honestly invested more time into this than I should anyway, so if you like you can take my hints and run with it. (Alas do it yourself if you like to)

[MoreFun]

Good post, I agree, you gave a great lection about gambiling and risk mng. Although my intention was not to make decision based on that but maybe to see options.

[lucif]

Please define the "bubble start" (what is it?), or your theory costs nothing.

[Dalib]

1) There's no reason to suspect from comparison alone that we will bottom out below around $60, since there isn't nearly the excess to burn off that was there in 2011. According to the "Repeat of 2011" theory, it wouldn't be at all surprising if we already saw the bottom last week at $66.
2) We'll end up consolidating at $100 for quite a while.

Interesting post. I personally does not presuppose that $ 100 is already consolidation.

Some of the many reasons:

1. market is temporarily overbought
2. we are 26% above the daily SMA200

While it is therefore possible that the bottom remains 66 (but can still 55 - 61) and it's very likely that the price will be at $ 75-80 at least temporarily.

In other words - we are probably on top last wave now and we need see the next minimum and then consolidation.

[CoinEntropy]

1) There's no reason to suspect from comparison alone that we will bottom out below around $60, since there isn't nearly the excess to burn off that was there in 2011. According to the "Repeat of 2011" theory, it wouldn't be at all surprising if we already saw the bottom last week at $66.
2) We'll end up consolidating at $100 for quite a while.

Interesting post. I personally does not presuppose that $ 100 is already consolidation.

Some of the many reasons:

1. market is temporarily overbought
2. we are 26% above the daily SMA200

While it is therefore possible that the bottom remains 66 (but can be 55 to 61) and it is very likely that the price of 75-80 $ will be at least temporarily.

In other words - we are probably on top last wave now and we need see the next minimum and then consolidation.

That would be quite sad.

[Frozenlock]

That would be quite sad.

How so? You can end up with more coins! 

[grovestr]

https://i.imgur.com/dqcZyls.png

I have made some changes. Seems legit.
http://oi43.tinypic.com/ot3cxc.jpg

[notme]

1) There's no reason to suspect from comparison alone that we will bottom out below around $60, since there isn't nearly the excess to burn off that was there in 2011. According to the "Repeat of 2011" theory, it wouldn't be at all surprising if we already saw the bottom last week at $66.
2) We'll end up consolidating at $100 for quite a while.

Interesting post. I personally does not presuppose that $ 100 is already consolidation.

Some of the many reasons:

1. market is temporarily overbought
2. we are 26% above the daily SMA200

While it is therefore possible that the bottom remains 66 (but can still 55 - 61) and it's very likely that the price will be at $ 75-80 at least temporarily.

In other words - we are probably on top last wave now and we need see the next minimum and then consolidation.

Regarding 2:  SMA is highly manipulated by small trades in this market.  Using a volume weighted moving average, the 200 day is right at $96.

[nrd525]

Google search trends for "bitcoin"
2011


2013


So far the 2013 recovery looks worse than the 2011 one when compared to the start of the year (though not when compared to the peak).  Currently our search volume is only 3 times what it was in January, 2013.  Whereas in 2011, it looks like the search volume at this point was maybe 6 times more.

If the search volume correlates with price - then it is roughly predicting a $40 price.  Though it could be that if the search volume doubles, the price goes up by more than double (critical mass).

[Zangelbert Bingledack]

Please define the "bubble start" (what is it?), or your theory costs nothing.

The start of a rapid rise after long consolidation. 2013 definitely has a clear start in January. For 2011 the start isn't as clear, so I just chose the start that is LEAST advantageous to my bullish argument (that is, the least amount of consolidation beforehand). Had I chosen an earlier date for the 2011 bubble start, the bubble would look that much bigger and have "crashed" to that much higher of a plateau, boding even better for 2013 prices under the "this is a repeat of 2013" theory.

[Zangelbert Bingledack]

Search volume is both a leading AND and trailing indicator, so we can't draw conclusions from those Google Trends graphs, though they could form pieces of a bearish argument in conjunction with other evidence.

Another thing about Google Trends is that people google something a lot more if they're wondering what the hell it is. A lot more people know what it is or are exposed to it through articles that explain it well now, since more explanatory materials are in place (for example that new "What is Bitcoin?" video with the Australian narrator and high-end visual effects). Perhaps using the phrase "buy bitcoins" or something could eliminate this misleading factor.

Also, the 2011 bubble was way more dramatic and there were all those scams and bad news after the pop keeping search volume high.

[manfred]

The software download has roughly doubled, otherwise more or less the same pattern.