Analysis

[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.

[Wind_FURY]

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.

It might also be the same time Bitcoin has "found" it's true price, volatility will reduce, and stabilize?

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.

It's a shitcoin in my opinion. For how long Vitalik Buterin can keep his database running, it will not be forever.

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.

I know some Bitcoiners respect Monero, but you said it, their own onchain privacy will be their own problem. Governments don't like it, their developers should be like Satoshi and never reveal their identities.

Chia, it's too late, before 2017 was the right time to challenge to be a "better Bitcoin".

Your opinion on Decred?

[exstasie]

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.

It might also be the same time Bitcoin has "found" it's true price, volatility will reduce, and stabilize?

My theory is that will happen during the "laggard" phase.



When the majority is entering, it's more likely to be the final speculative bubble.

It's a shitcoin in my opinion. For how long Vitalik Buterin can keep his database running, it will not be forever.

I don't care whether it's a shitcoin. I care about where the market is going.

Bitcoin maximalists make the fundamental mistake of forgoing profits (BTC profits) in favor of talking shit from on their high horse. The market makes clear time and time again that it does not value decentralization nearly as much as you do. It's not like all money must flow to the one true decentralized coin.

Ethereum aside, there is also the possibility (however slight) that alternatives to POW eventually become viable. That could be a game changer.

Chia, it's too late, before 2017 was the right time to challenge to be a "better Bitcoin".

It's never too late........until the "laggard" phase. As long as the market still views Bitcoin as speculative, then investors are going to keep chasing after "the next Bitcoin."

Your opinion on Decred?

None yet. A couple people I respect think it's going places, but I never took the time to look into it.

[Wekkel]

Bitcoin maximalists make the fundamental mistake of forgoing profits (BTC profits) in favor of talking shit from on their high horse. The market makes clear time and time again that it does not value decentralization nearly as much as you do. It's not like all money must flow to the one true decentralized coin.

Exactly. In each major bull run, the big money was made in ... altcoins.

But in this cycle, I have yet to see a meaningful start of a bull run in the alt market. Will it be different this time (I suspect not; big boys are accumulating as we speak)?

[exstasie]

Exactly. In each major bull run, the big money was made in ... altcoins.

But in this cycle, I have yet to see a meaningful start of a bull run in the alt market. Will it be different this time (I suspect not; big boys are accumulating as we speak)?

It's all about sector rotation: https://www.investopedia.com/articles/trading/05/020305.asp

Sector rotation is the movement of money invested in stocks from one industry to another as investors and traders anticipate the next stage of the economic cycle.

In crypto markets, this dynamic usually manifests in the following way:

• BTC rallying causes an exit from altcoins as traders chase BTCUSD gains
• When BTC consolidates and goes sideways, traders return to altcoins in search of speculative gains

During exponential growth cycles like 2013 and 2017, we saw money flow back and forth between the two markets, over and over. BTC up, altcoins stagnate. BTC stagnates, altcoins up. They switch off rallying until the latest stage of the bubble, when basically anything currently listed on a crypto exchange can and will be pumped in a mad speculative frenzy. That's the blow-off top phase.

BTCUSD doubled in the last two months, so it's no surprise the market is piled into BTC rather than altcoins. Given that corrections are inevitable, and that I'm already sold on another bubble cycle like 2017, I think money flowing into altcoins is inevitable too.

It all boils down to greed. In a greedy and speculative market, traders increasingly seek out riskier and higher return instruments.

[cAPSLOCK]

Bitcoin maximalists make the fundamental mistake of forgoing profits (BTC profits) in favor of talking shit from on their high horse. The market makes clear time and time again that it does not value decentralization nearly as much as you do. It's not like all money must flow to the one true decentralized coin.

Exactly. In each major bull run, the big money was made in ... altcoins.

But in this cycle, I have yet to see a meaningful start of a bull run in the alt market. Will it be different this time (I suspect not; big boys are accumulating as we speak)?

The alt action as I see it could unfold like this... Particularly in the wake of the XRP led altpocylypse.

There are two kinds of big money coming in. 

1.  The Michael Saylor "Bitcoin is the killer network" sort of maximalist inflow.  And there will be a lot of this.  Because those level of investors understand how important network effect is, and they are also most likely fairly resistant to scam narratives, unlike retail.

2.  The due diligence "what is the next bitcoin?" inflow.  But hopefully it is actually somewhat more sophisticated than that.  For example Fidelity seems to be getting Bitcoin from their analysts to their CEO.  But do you really think that company is not looking at other projects and pinpointing places where there could be an asymmetrical bet sort of like Bitcoin circa 2014.  I think it is possible this is driven by misunderstanding and ignorance as well as by really solid analysis.  In other words, I feel like Raoul Pal's recent ETH praise is not really based on deep analysis.  I think he is sort of just looking at it on the surface and thinking it will be the smart contract platform without regard to its security, ability to remain decentralized, etc.  Whereas someone else might notice a crypto project that honestly does something Bitcoin does not do, and stays out of the way of Bitcoin's sweet spot.  I can think of a couple.  And I could see money going into those.

SO... I think it is very likely we see CERTAIN altcoins continue to appreciate in value while possibly even the majority tank.

But I also kind of hope for that... so I am biased.

[Wexlike]

"new" post: https://www.tradingview.com/chart/BTCUSD/cOgzT7cl-Lets-test-yet-another-price-channel/

[drays]

"new" post: https://www.tradingview.com/chart/BTCUSD/cOgzT7cl-Lets-test-yet-another-price-channel/

Masteluc is generating those channels with enviable persistence

It reminds me of this post from JayJuanGee: https://bitcointalk.org/index.php?topic=274613.msg55537511#msg55537511... "If he keeps trying sooner or later he is going to be correct"
But in fact, we cannot apply the theory of a "broken clock" here, because unlike broken clock, Masterluc is changing his statements, so there is no guarantee he will be correct sooner or later...

[windjc]

"new" post: https://www.tradingview.com/chart/BTCUSD/cOgzT7cl-Lets-test-yet-another-price-channel/

Masteluc is generating those channels with enviable persistence

It reminds me of this post from JayJuanGee: https://bitcointalk.org/index.php?topic=274613.msg55537511#msg55537511... "If he keeps trying sooner or later he is going to be correct"
But in fact, we cannot apply the theory of a "broken clock" here, because unlike broken clock, Masterluc is changing his statements, so there is no guarantee he will be correct sooner or later...

MasterLuc was once the crown prince of bitcoin charts. But over the years he has wandered astray. I am not sure he understands the fundamentals that are at play in 2020.