Analysis

[Wexlike]

Pretty arbitrary lines.

[1715672206]

1715672206

[1715672206]

1715672206

[1715672206]

1715672206

[1715672206]

1715672206

[1715672206]

1715672206

[1715672206]

1715672206

[JayJuanGee]

Pretty arbitrary lines.

Not "arbitrary"..... "maths and sciences"   

[Wind_FURY]

Pretty arbitrary lines.

Not "arbitrary"..... "maths and sciences"  

Call it "arbitary", maths and sciences with the "quotes", or even "chart-voodoo", but it does actually show that there's a pattern. Especially after the yellow lines/halvings. Did Satoshi accidentaly design a long term surging "asset"? Shower thought.

[cAPSLOCK]

Pretty arbitrary lines.

Not "arbitrary"..... "maths and sciences"  

Call it "arbitary", maths and sciences with the "quotes", or even "chart-voodoo", but it does actually show that there's a pattern. Especially after the yellow lines/halvings. Did Satoshi accidentaly design a long term surging "asset"? Shower thought.

It's a question that has been bounced around for quite a while.  Monero did an interesting tweak in making the issuance decent smooth instead of stepped.  But the repeating hype cycle definitely is an interesting idea.  On purpose?  Satoshi a genius or lucky or crazy?

On the other hand it seems it should diminish in magnitude over time as half of half of half becomes vanishingly smaller.

[kellrobinson]

Under-damped step response



https://lpsa.swarthmore.edu/Transient/TransInputs/TransStepTime.html#Case_3

There's no damper on the market, so the price overshoots.  Like an RLC circuit without enough resistance responding to a step input, or a jalopy without shock absorbers that bounces up and down like crazy when it hits a bump (halving).
Car or circuit has enough time to stop bouncing or ringing and settle down (i.e. bitcoin reverts to its longtime trend, the red line), before it gets subjected to the next shock.
With continuous block reward adjustment instead of a massive cut once every four years, maybe price would scoot more smoothly up the curve, like our proverbial shockless jalopy on a smooth road.  We wouldn't see a mega-bubble every four years like clockwork.  But we do.
The block reward step function put that green line where it is.  For some reason the last two peaks hit the line spot on.  If we get another blow-off top, it probably won't make a bullseye on the green line like the other two did (in which case price will peak somewhere between $150k and $200k).  I am expecting price at least to mount the $75k step, though.
Some people, like PlanB and Willy Woo, are projecting around $300k.

[JayJuanGee]

Pretty arbitrary lines.

Not "arbitrary"..... "maths and sciences"  

Call it "arbitary", maths and sciences with the "quotes", or even "chart-voodoo", but it does actually show that there's a pattern. Especially after the yellow lines/halvings. Did Satoshi accidentaly design a long term surging "asset"? Shower thought.

Yep.. he seems to have designed a kind of surging asset... so I am not sure if the implications of design choices was an "accident", exactly.

[edited out]

It's a question that has been bounced around for quite a while.  Monero did an interesting tweak in making the issuance decent smooth instead of stepped.  But the repeating hype cycle definitely is an interesting idea.  On purpose?  Satoshi a genius or lucky or crazy?

On the other hand it seems it should diminish in magnitude over time as half of half of half becomes vanishingly smaller.

seems dat cAPSLOCK speaks dee truth.   

[exstasie]

Call it "arbitary", maths and sciences with the "quotes", or even "chart-voodoo", but it does actually show that there's a pattern.

Traders sometimes say "the trend is your friend, until it ends." The point being that all trends do eventually end. You can only expect to ride them for so long.

In this case, I wonder if people are overestimating their ability to keep selling the top of that logarithmic channel. Everyone thinks they can sell $80K or $100K but........what if the mass adoption scenario happens? We could be looking at $500K or $1M in the next cycle if you think about it.

[explorer]

Call it "arbitary", maths and sciences with the "quotes", or even "chart-voodoo", but it does actually show that there's a pattern.

Traders sometimes say "the trend is your friend, until it ends." The point being that all trends do eventually end. You can only expect to ride them for so long.

In this case, I wonder if people are overestimating their ability to keep selling the top of that logarithmic channel. Everyone thinks they can sell $80K or $100K but........what if the mass adoption scenario happens? We could be looking at $500K or $1M in the next cycle if you think about it.

   Selling at 80k or 100k is a no brainer.  Doing that and having that be near the top, and then also buying again at the bottom of what dip may or may not come...  the complexity of those additional factors can wreck a plan damn fast.  Sell at 80k.  great. OOps, the top shot to 500k, and the crash to a spike low of 140k, back to 1000k+ ... Oops.  Think it can't happen?

[Wind_FURY]

Pretty arbitrary lines.

Not "arbitrary"..... "maths and sciences"  

Call it "arbitary", maths and sciences with the "quotes", or even "chart-voodoo", but it does actually show that there's a pattern. Especially after the yellow lines/halvings. Did Satoshi accidentaly design a long term surging "asset"? Shower thought.

It's a question that has been bounced around for quite a while.  Monero did an interesting tweak in making the issuance decent smooth instead of stepped.  But the repeating hype cycle definitely is an interesting idea.  On purpose?  

I believe it was. Satoshi did put a supply cap.

Satoshi a genius or lucky or crazy?

Look at the price, he is a genius! Although, I believe Bitcoin got lucky in getting some traction during the beginning.

Pretty arbitrary lines.

Not "arbitrary"..... "maths and sciences"  

Call it "arbitary", maths and sciences with the "quotes", or even "chart-voodoo", but it does actually show that there's a pattern. Especially after the yellow lines/halvings. Did Satoshi accidentaly design a long term surging "asset"? Shower thought.

Yep.. he seems to have designed a kind of surging asset... so I am not sure if the implications of design choices was an "accident", exactly.

I would say it wasn't. Bitcoin might be the greatest "hack" on the financial system.

[exstasie]

Sell at 80k.  great. OOps, the top shot to 500k, and the crash to a spike low of 140k, back to 1000k+ ... Oops.  Think it can't happen?

Exactly!

[kellrobinson]

   Selling at 80k or 100k is a no brainer.  Doing that and having that be near the top, and then also buying again at the bottom of what dip may or may not come...  the complexity of those additional factors can wreck a plan damn fast.  Sell at 80k.  great. OOps, the top shot to 500k, and the crash to a spike low of 140k, back to 1000k+ ... Oops.  Think it can't happen?

Hodl past 80k.  great.  Sell at 500k.  Looks good so far!  Buy at 140k.  Mmm, cheap coinz.  Sell at 1000k.  Cha-ching!

[boumalo]

   Selling at 80k or 100k is a no brainer.  Doing that and having that be near the top, and then also buying again at the bottom of what dip may or may not come...  the complexity of those additional factors can wreck a plan damn fast.  Sell at 80k.  great. OOps, the top shot to 500k, and the crash to a spike low of 140k, back to 1000k+ ... Oops.  Think it can't happen?

Hodl past 80k.  great.  Sell at 500k.  Looks good so far!  Buy at 140k.  Mmm, cheap coinz.  Sell at 1000k.  Cha-ching!

The 18,5m bitcoins are worth 355 B$. The liquidity keeps increasing and as long as it does and people want bitcoins, the price should go up.

A market cap of 1000 B$ is the equivalent of 53800$ per BTC.

[dragonvslinux]

Everyone thinks they can sell $80K or $100K but........what if the mass adoption scenario happens? We could be looking at $500K or $1M in the next cycle if you think about it.

Wow, this is the most bullish statement I've ever heard from you I think! To me mass adoption wouldn't necessarily mean price continues to rise. If anything, this adoption would be based on usage (spending Bitcoin) rather than store of value (long-term investment). Therefore, adoption kicking in at a 6 figure BTC wouldn't be something I'd be bullish about. Of course you could argue that investment is adoption, which is true, but a more accurate form of adoption to me is using Bitcoin as currency, not to invest speculatively.

I do see your general point though, price could 5x from ATH to new ATH, but instead carrying on further. This will always be the case with Bitcoin's unpredictable nature.

[exstasie]

Everyone thinks they can sell $80K or $100K but........what if the mass adoption scenario happens? We could be looking at $500K or $1M in the next cycle if you think about it.

Wow, this is the most bullish statement I've ever heard from you I think! To me mass adoption wouldn't necessarily mean price continues to rise. If anything, this adoption would be based on usage (spending Bitcoin) rather than store of value (long-term investment).

I don't really make such a distinction. I think it's only natural that markets price in Bitcoin's speculative potential way ahead of its actual medium of exchange utility.

I also use the term "mass adoption" pretty loosely. What I really mean is the point at which this S-curve goes vertical:

Since Bitcoin's price is directly related to adoption, we can think of its price cycle in terms of technology adoption curves. Now if BTC is to become mass adopted, then we're still only in the early adopter phase:



Consider the implications of that. The chart visually shows how the price cycles seen in 2011-2017 may just be tiny blips compared to the mega gains coming during the mass adoption phase.

People around here can barely conceive of > $20K. Let's talk millions USD.

For me, this is not so much about the size of Bitcoin's network or utility as a currency. It's more about when society (retail, institutions, government) collectively realizes where BTC is going and acts accordingly by piling into the market. Not in small numbers (small money) as early adopters anymore, but actually as the majority. And in that scenario, Bitcoin's extreme scarcity (lost coins, the HODL culture) makes it really difficult to predict just how high it could go. The sky is the limit honestly, especially if we're talking about blow-off tops.

The basic idea underlying this insane bullishness is that the 2010-present bull market is just a tiny taste of the potential gains when that technology adoption S-curve goes truly vertical and then later plateaus. Everyone seems to assume the market will continue in these periodic fits and starts ("the 4 year cycle"). As a contrarian trader and big believer in maximum pain theory, that lends support to this idea that perhaps even the Bitcoin bulls are going to get run over and left behind by this market.

These periodic cycles are going to become way too predictable at some point, and then the pattern is going to change. The question is, to what? This is one possibility I see.

[kellrobinson]

People talk about the sigmoid growing fastest at the knee because they look at linear charts, and on a linear chart, slope changes.  During logistic adoption, the early stage of growth is exponential, and represented on a linear chart, slope there increases.  But during exponential growth, the rate of increase is not changing; y gets multiplied by the same constant for a unit increase in x, no matter where you are on the x axis.  Look at log charts and you will see it.  Here's a graph of the log of the sigmoid function.
https://wolframalpha.com/input/?i=y%3Dlog%281%2F%281%2Be%5E%28-x%29%29%29%2C-10%3C%3Dx%3C%3D10%2C-10%3C%3Dy%3C%3D1&x=11&y=7
The sigmoid or logistic function can be expressed as y=1/(1+e^-x)
The left half of the logarithmic logistic is a straight line.  The knee comes at x=0. (This is where the linear chart shows a "knee")
The sigmoid has asymptotes at 0 and 1.
The sigmoid is the tanh (hyperbolic tangent) function shifted and scaled.  Tanh has asymptotes at -1 and 1. Shrink it by half and move it up a little, and you have the logistic function.
The point I wanted to make before I wandered off the subject is that as bitcoin continues its progression along the logistic curve, if that's what it's even doing, we won't see an increase in growth.   On the log scale, price growth has been slowing since 2010.  And a log scale is the only way of looking at it.  On the linear scale, most of bitcoin's price history gets squashed down to invisibility.  Linear is unrealistic for representing bitcoin's price history through its orders of magnitude.
Linear representation serves measures, like time, where zero is an arbitrary point on a line that's infinite or indefinitely long.
For quantities where zero means nothing's there, like money or audio power levels, one needs to use the logarithm.  Which is why we measure power in decibels.

[exstasie]

On the log scale, price growth has been slowing since 2010.  And a log scale is the only way of looking at it.  On the linear scale, most of bitcoin's price history gets squashed down to invisibility.  Linear is unrealistic for representing bitcoin's price history through its orders of magnitude.

Logarithmic vs. linear is not the appropriate question. The question is whether you can extrapolate a line of best fit (or log regression) into the future and expect it to hold. My contention is that you can't, not for very long. In markets, these patterns become too obvious and then investors front run them.

There is no reason to assume that just because BTC's growth in 2010 was so rapid that its future growth must be limited to a logarithmic regression based on that growth rate. There is no logic to that at all.

People just see trends and get attached to them. But all trends eventually end.

[cAPSLOCK]

7 Hours ago from the time of this post:



And it has broken to the upside, if only a little.

[explorer]

7 Hours ago from the time of this post:



And it has broken to the upside, if only a little.

I think we cross the 20k line again.  I'd rather do it sooner than later.

[Wind_FURY]

Since Bitcoin's price is directly related to adoption, we can think of its price cycle in terms of technology adoption curves. Now if BTC is to become mass adopted, then we're still only in the early adopter phase:



Consider the implications of that. The chart visually shows how the price cycles seen in 2011-2017 may just be tiny blips compared to the mega gains coming during the mass adoption phase.

People around here can barely conceive of > $20K. Let's talk millions USD.

For me, this is not so much about the size of Bitcoin's network or utility as a currency. It's more about when society (retail, institutions, government) collectively realizes where BTC is going and acts accordingly by piling into the market. Not in small numbers (small money) as early adopters anymore, but actually as the majority. And in that scenario, Bitcoin's extreme scarcity (lost coins, the HODL culture) makes it really difficult to predict just how high it could go. The sky is the limit honestly, especially if we're talking about blow-off tops.

The basic idea underlying this insane bullishness is that the 2010-present bull market is just a tiny taste of the potential gains when that technology adoption S-curve goes truly vertical and then later plateaus. Everyone seems to assume the market will continue in these periodic fits and starts ("the 4 year cycle"). As a contrarian trader and big believer in maximum pain theory, that lends support to this idea that perhaps even the Bitcoin bulls are going to get run over and left behind by this market.

These periodic cycles are going to become way too predictable at some point, and then the pattern is going to change. The question is, to what? This is one possibility I see.

Off-topic, but once the early majority enters the market, then the late majority, what other cryptocurrencies should be "bought and HODLed" with our Bitcoins to be back to be the "early adopters"? Asking for a friend.

[exstasie]

Off-topic, but once the early majority enters the market, then the late majority, what other cryptocurrencies should be "bought and HODLed" with our Bitcoins to be back to be the "early adopters"? Asking for a friend.

When the majority enters the market, it means Bitcoin's era as a highly speculative asset is over. By that point, I think the door will be closing on this era where shitcoins can endlessly be pumped based on pure speculation and greed. Which coins survive to that point......it's impossible to say. Some probably haven't been launched yet.

The only altcoin I'm confident will stand the test of time (even if it can't remain truly decentralized) is Ethereum. It's too entrenched to disappear. I'm also partial to Monero (far more than any other privacy coin) but I wonder how damaging soft and hard bans by governments and exchanges will affect its organic network effect and value. As for unlaunched coins, Chia looks interesting to me but it's way too early to make any big bets on long term viability.

Shitcoins are such that the only way to play it in the micro/low cap or pre-launch phase is to make lots of bets and expect that most won't come in. The ones that pay off will pay off massively. But you can't afford to leave yourself very exposed to any one project because chances are it's going nowhere. In that case you're just hoping to sell into an exit pump, which can take long periods of bagholding. And sometimes your bags will be de-listed from exchanges in the meantime (during bear markets) so you need to hedge against those worst case scenarios by spreading the risk around and only choosing coins that have a high propensity for network effect and hype.