Stephen Reed's Million Dollar Logistic Model

[holomen]

The price deviated a lot more from the trendline prior to 2012, because trading was all over the place back then.

Until the future proves otherwise we can assume the log10 delta from trend has a period of 8 months and an amplitude of 0.4 (maybe 0.45) log base 10 units.

I have to second this opinion. Had same in mind saying ''Few years".

I guess prior 2012 the market itself wasn't global and mature enough to be as stable as it is now.

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[SlipperySlope]

Summer 2014 Bitcoin Bubble - moral_agent's BubbleWatch from reddit

In the Daily Discussion thread on Reddit BitcoinMarkes, moral_agent posts an album of charts titled Bubble-watch. Here is the explanation.

Here is my favorite chart from his series, that scales the previous bubbles and aligns them by troughs. If the next bubble is indeed very similar in shape to the preceding two bubbles, then we could expect the Summer 2014 Bubble to peak in late July.



 

[SlipperySlope]

Here is a great comparison and prediction set of charts from reddit user lowstrife. The numeric labels are Elliott Wave counts. Heiken Ashi is a candle stick chart variation. What I get from these charts is a sense for a sideways price consolidation - the flat - which occurs before the super-exponential portion of the bubble. The blue bars in the June 2014 chart are a projection of what lowstrife believes is a bubble peak in late July . . .

[BitChick]

Here is a great comparison and prediction set of charts from reddit user lowstrife. The numeric labels are Elliott Wave counts. Heiken Ashi is a candle stick chart variation. What I get from these charts is a sense for a sideways price consolidation - the flat - which occurs before the super-exponential portion of the bubble. The blue bars in the June 2014 chart are a projection of what lowstrife believes is a bubble peak in late July . . .

I am not sure that the "recovery" phase is quite done yet.  I think that we will push up to $800 or so and hang out there for a bit before the spike in July.  Just my thoughts.

[bitrider]

Thanks for sharing the charts Stephen. Been seeing these around. Nice to have them all in one place.

They ring true to me, and I think we are about where we need to be for the base. In past bubbles the basing calm happened at about 50% of the bubble peak (very rough) and I think we are just about there. I suspect the steady phase is upon us...with some fluctuation up and down for the next couple of weeks.

[SlipperySlope]

I know I'm getting ahead of myself here, but the NEXT bubble after the July one should take us into the $25,000 area sometime in March/April 2015.

 

The Bitcoin ETF's should be live by then. That would fuel the 2015 bubble. If there is a single bubble this year, then perhaps 2015 will be similar to 2013 and have two bubbles.

[snowdropfore]

I know I'm getting ahead of myself here, but the NEXT bubble after the July one should take us into the $25,000 area sometime in March/April 2015.

 

The Bitcoin ETF's should be live by then. That would fuel the 2015 bubble. If there is a single bubble this year, then perhaps 2015 will be similar to 2013 and have two bubbles.

two bubbles can take us to 25000

[Nagato]

I've been following this thread for some time and think its wonderful work.

However, in my opinion atleast, the $1 million maximum price is too conservative.
Based on the assumption of Bitcoin supplanting all government currencies alone, which on last check M2 was ~$60 trillion would imply a BTC price of about $3 million each.

Now, where it really gets interesting is if you start to factor in that monetary inflation has been pretty out of whack since the late 90s (or arguably since 1971 after the world went off the gold standard), fuelling the Dot Com/Housing bubbles and more importantly, altering people's saving/investment behaviour. Almost any productive individual today (below 50) has lived their entire lives watching prices of almost everything around them go up consistently, whether it be groceries, houses, stock market, PMs. Even though the majority may not understand the nature of inflation or what causes it, they do understand that saving money in the bank is inferior to "investing" in other asset classes. "Investing" because most of them do not actually invest based on fundamentals but buy the said assets simply because they have shown to reliably appreciate year after year in nominal terms. Many of these "investors" think they are making good investments when they watch their nominal portfolios rise when infact all they have discovered is an asset to hedge against inflation.

Before 2008, the majority of people who were risk adverse may have been content with keeping money in the bank and losing 3-5% in inflation year after year in return for less risk. However after the Lehman collapse and the onslaught of QE/money printing around the world, monetary inflation rates have exploded and asset classes like equities, bonds(it would appear only CBs are buying this) and real estate have kept up with the money printing. It could be argued that since 2008, fiat has been reduced to merely a transactional and immediate liquidity needs type of asset for more people than ever before. Real Estate(see China ghost cities), equities and PMs have now taken over the additional role of long term store of value and are therefore vulnerable.

Vulnerable to Bitcoin, which with its dual properties of being an excellent transactional currency and store of value.
Consider the following:

Global M2  ~$60 trillion
Offshore wealth   ~$30 trillion
Speculative Real Estate  ~$30 trillion??
PMs ~$8 trillion

There are valid arguments to be made that Bitcoin could draw capital from all of them to a significant degree. If we assume that Bitcoin replaces all fiat and subsumes 50% of the other assets, we are looking at a maximum valuation of $4 million to $5 million in today's dollars.

[rpietila]

in today's dollars.

The concept is elusive. Today, you can purchase 10 smartphones for the price of one phone call to your lawyer. Smartphones aggregate functionalities that did not all even exist 20 years ago. The producible stuff is getting smaller, cheaper and more capable, fulfilling the promise of ephemeralization.

On the other hand, assets that are scarce, like real estate in prime places, or gold, are holding quite well. Even if we transpass the cost of energy and gold becomes easy to produce, RE will still hold its value.

As for human service, some say that it cannot be bought with money at all in the future if we enter into general abundance. I don't believe this, however. Even though I myself don't generally work, or sell my services for money, I am still inclined to do this if someone presents a good offer since the price offered is the concrete proof of the value of my time, and doing something which is highly valued makes me feel good. In this way the monetary incentive does raise my welfare, but it happens directly via the feeling good of being valued, not indirectly via the things money can buy (since the compensation does not increase that at all; I have for long been able to buy all that I need).

[10c]

I am not sure that the "recovery" phase is quite done yet.  I think that we will push up to $800 or so and hang out there for a bit before the spike in July.  Just my thoughts.

I agree with you on this one, we need to get at least to the 750-ish range.
If you look at the charts posted you see the first bubble's top is equal to the sideway's motion,
The second one is roughly at 3/4 of the bubble top, we are barley half way to the top of the last bubble.

[wachtwoord]

I am not sure that the "recovery" phase is quite done yet.  I think that we will push up to $800 or so and hang out there for a bit before the spike in July.  Just my thoughts.

I agree with you on this one, we need to get at least to the 750-ish range.
If you look at the charts posted you see the first bubble's top is equal to the sideway's motion,
The second one is roughly at 3/4 of the bubble top, we are barley half way to the top of the last bubble.

I actually was assuming ~$800 too for the consolidation phase. Bitcoin's price is a bit hard to predict though

[KeyJockey]

But will dogecoin also have this logistic price rise.

I have found only one coin except BTC, which has a good enough potential to even be around in 3 years, to warrant an investment. And that one is Monero, MRO.

RPietila, first of all I wanna say many thanks for your input here... really appreciate all the work you do for all our benefit!

Second, I don't wanna derail the thread from latest posts & analysis about upcoming spike/bubble (really important work!) but just curious if, in the above comment, you've considered the MaidSafe project?

Would it qualify as deserving, in your analysis, being not exactly only an alt-coin but rather just having it's own alt-coin as part of the overall "decentralized Internet" idea that those guys are working on, by itself?  Or despite that, does it still fall short IYHO?

Just curious 'cuz I myself have only ever put any money into just MaidSafe, besides putting everything I can afford/manage into only simply BITCOIN.  I invested exactly ONE BTC into MaidSafe, so it's not that big a deal (LOL, if it fails? no biggie) but for what it's worth I put in that single bitcoin just because I like the idea of what those guys are trying to do...!  But, I dunno, maybe that's a mistake?

Your opinion?  (And, again, feel free to ignore this, if it's gonna derail from thread's focus last day or two on upcoming price action!)

[CaptFantastic]

I think it is worth noting that the "recovery" phase in June 2014 is the most smooth -- with the implicit assumption that this may show the "confidence" of buyers.  In the previous two recovery phases, there's a significant amount of buyer "hesitation" if you will, indicating more anxiety about losing money, and therefore more "choppiness" in the line move up.  However, the larger picture is that the buying pressure has consistently been stronger in all three recovery phases.  I might explain that the obvious lack of "anxiety" in the buyers in this current phase may reflect the stronger position Bitcoin is currently in than ever in the past -- i.e., all of the ever increasingly more positive news regarding the adoption of Bitcoin by ever larger companies, continuing exponential growth of bitcoin wallet numbers, etc. and increasingly more supportive political/governmental environment for Bitcoin in the US.  In other words, ever increasing fundamentals are supporting the price of Bitcoin more so now than ever, with the assumption that this fundamental trend will continue exponentially.  Just my humble opinion. 

[okthen]

I know I'm getting ahead of myself here, but the NEXT bubble after the July one should take us into the $25,000 area sometime in March/April 2015.

 

The Bitcoin ETF's should be live by then. That would fuel the 2015 bubble. If there is a single bubble this year, then perhaps 2015 will be similar to 2013 and have two bubbles.

two bubbles can take us to 25000

I do think this as well (25000 as a top, of course).
Besides the EFT I guess eBay will probably be in by then.
I imagine that this could be the start of the next bull run, if they integrate bitcoin on paypal...

[SlipperySlope]

I think it is worth noting that the "recovery" phase in June 2014 is the most smooth -- with the implicit assumption that this may show the "confidence" of buyers.  In the previous two recovery phases, there's a significant amount of buyer "hesitation" if you will, indicating more anxiety about losing money, and therefore more "choppiness" in the line move up.  However, the larger picture is that the buying pressure has consistently been stronger in all three recovery phases.  I might explain that the obvious lack of "anxiety" in the buyers in this current phase may reflect the stronger position Bitcoin is currently in than ever in the past -- i.e., all of the ever increasingly more positive news regarding the adoption of Bitcoin by ever larger companies, continuing exponential growth of bitcoin wallet numbers, etc. and increasingly more supportive political/governmental environment for Bitcoin in the US.  In other words, ever increasing fundamentals are supporting the price of Bitcoin more so now than ever, with the assumption that this fundamental trend will continue exponentially.  Just my humble opinion. 

I commend your line of reasoning regarding the increasing fundamentals. According to Peter_R's interpretation of Metcalf's Law that says bitcoin prices have a relationship to square of the number of users, addresses and quantity of transactions. The site Bitcoin Pulse has an excellent set of fundamental adoption data series. For prices to increase as they have in the past, 10x annual price growth is supported by 3.2x growth in the adoption fundamentals.

My own CPoS project has as one of its benefits, low transaction fees and capacity for many more micro transactions than Satoshi's Bitcoin.

[Bit_Happy]

Thanks Stephen, for making this thread and on-going event. This could turn into an "epic adventure" type of topic.

Here is a great comparison and prediction set of charts from reddit user lowstrife. The numeric labels are Elliott Wave counts. Heiken Ashi is a candle stick chart variation. What I get from these charts is a sense for a sideways price consolidation - the flat - which occurs before the super-exponential portion of the bubble. The blue bars in the June 2014 chart are a projection of what lowstrife believes is a bubble peak in late July . . .

When patterns get "too predictable" markets tend to throw in some amazing surprises.
I expect/predict we will eventually have another huge rally, but this years chart (or the next) will have much different ripples in the "waves".

[okthen]

Here is a great comparison and prediction set of charts from reddit user lowstrife. The numeric labels are Elliott Wave counts. Heiken Ashi is a candle stick chart variation. What I get from these charts is a sense for a sideways price consolidation - the flat - which occurs before the super-exponential portion of the bubble. The blue bars in the June 2014 chart are a projection of what lowstrife believes is a bubble peak in late July . . .

I am not sure that the "recovery" phase is quite done yet.  I think that we will push up to $800 or so and hang out there for a bit before the spike in July.  Just my thoughts.

Well, if you look at the previous bubble, points 3 and 7 are at approximately the same amount, which looks like where we are now.
What a great summer we'll have!

[wachtwoord]

But 1 was higher than 3 (not in the first one) and the consolidation was longer and less volatile.

[dennydotco]

So is anyone buying and selling based on this logarithmic action? It seems like it could be a good indicator. If the price is x% higher than the curve, maybe it's a wise time to sell and buy in when it drops to x% under the curve.

[SlipperySlope]

So is anyone buying and selling based on this logarithmic action? It seems like it could be a good indicator. If the price is x% higher than the curve, maybe it's a wise time to sell and buy in when it drops to x% under the curve.

Yes, I have been buying fractional bitcoin every workday since March at my local Bitcoin ATM because the Log10 difference from trend has been largely negative. The current price is $585, and the expected price according to the average trend is $1,624. Supposing the bubble peaks in July, then I expect a selling target price of $4000-$5000, and higher if the bubble is postponed.