The Observer Effect (take 2: over $1000 by 21 July - 8 Aug)

[JulieFig]

Here is an updated chart... although it is hard to see any progress since we of course are in log-scale.

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[JulieFig]

I also found that the bubbles (or peaks, if you would prefer to call them that) seem to occur approximately every 234 days (an observation already mentioned on this forum) - with the minimum time between peaks being 213 days and the maximum time being 235 days. Considering there have been six peaks, that is a very small degree of variability for such a notoriously volatile phenomenon as Bitcoin.

Could you please post the dates of the peaks and how exactly you define a peak? I simply defined a peak as a new ATH. However, this is assuming the magnitude of the peak that occurred in June 2011 is an outlier in terms of datapoints, but the date at which it occurred aligns with the proceeding peaks. Excluding this June 2011 peak magnitude, the peaks following (Jan and August 2012) could be considered ATHs. It is an assumption, yes, but a valid one (imho) considering the smaller user-base in the early years, and arguably less reliable exchange data.

By my count, there have been six peaks as well. However, the number of days between peaks that I've identified has ranged from 99 (2010-11-07 to 2011-02-14) all the way to 664 (2011-06-09 to 2013-04-09).

PS. Cool graph. How did you generate it? Good old excel.

[JulieFig]

We all love this chart and hope it comes to fruition.  But I must point out that the bottom line is just a copy of the top line's slope fit to touch a single low.  This doesn't make it a particularly strong channel.  The bottom line may not have the same slope.

You are right, but as I said previously, this channel is purely arbitrary, and was really only included as a visual guide (for myself) - although, don't you think chart looks nicer for it?  

This channel was in no way used to determine the projected ATHs that I have also posted.

[bitcoinsrus]

Julie, any plans of making a site with one of your charts (that updates). Would seem like a good follow.

[bitrider]

I don´t know what im going to do. I need to sell my btc to pay bills, but i know it will keep on rising and im going to lose money, but i sell or i sleep in the streets.

Sleep on the streets until 2016 and then contact the national newspapers. 

Yes. What's life if not an adventure? 

Or better yet, ask your powerful mind "how can I hold my bitcoins and still live comfortably for the next year?"

[maker88]

Now I don't know whether to buy a house next year - or wait until we hit $100K and buy two.  

Why would you want to buy two houses  

this is like asking "why would you want to be rich?"

No, it's not!

Are you saying that it's better to hold houses than bitcoins?

from a historical basis, yes houses are a good investment. should anyone hold anything INSTEAD of the other? no thats not what I'm saying. but the reasons one would want to have two houses is fairly obvious. its one of the most reliable investments there is i believe, even taking the 'housing crisis' of america into consideration, people with houses are certainly better off than people with just one house, if you actually own them. theres a large number of extremely wealthy people in the world who owe it all to buying real estate. if done right, it can do pretty well. maybe not early adoption of bitcoin well, but its nice and stable and some people like stable performers over volatility.

Agree, but perhaps someone would like to ask about the situation in Greece. There are 300k unsold houses and another 300k mortgaged ones but in the red (the loan is not being paid)!!!

 

People with mortgages are required to pay at the price they bought plus interest etc, while the value of their property has plummeted by 50% or even more!!! Not much of an investment there!!!

like i said, no one is talking about mortgages, talking about BUYING a house. as in purchasing it, in full, with money you have currently. no mortgage. but you're totally right thats exactly what happened in america, artificially overvalued assets, bought on leverage. likely those people did no research into what the house should be worth based on land and intrinsic value, more they went with the agents word and recent local sale numbers. never a smart move to buy things that are over valued on leverage and also not do your research.

[JulieFig]

Julie, any plans of making a site with one of your charts (that updates). Would seem like a good follow.

That's not a bad idea... if there's interest. I might wait and see how the bubble (or peak) prediction goes first. It could all be for nought!

[BittBurger]

In regards to the chart in the OP:

Is there any indication that each of the new jumps, or general movement over time has slowed in volatility?

I am no expert in these charts.  I guess I am wondering if there is reason to believe that the *percent* increases we've seen might realistically decrease as we move to the right?

That is what most non chart people would say.  We've seen our 8000% increase already.  What reason do we have to believe it will continue along the 'same line'  ?

-B-

[romneymoney]

Now I don't know whether to buy a house next year - or wait until we hit $100K and buy two.  

Why would you want to buy two houses  

this is like asking "why would you want to be rich?"

No, it's not!

Are you saying that it's better to hold houses than bitcoins?

from a historical basis, yes houses are a good investment. should anyone hold anything INSTEAD of the other? no thats not what I'm saying. but the reasons one would want to have two houses is fairly obvious. its one of the most reliable investments there is i believe, even taking the 'housing crisis' of america into consideration, people with houses are certainly better off than people with just one house, if you actually own them. theres a large number of extremely wealthy people in the world who owe it all to buying real estate. if done right, it can do pretty well. maybe not early adoption of bitcoin well, but its nice and stable and some people like stable performers over volatility.

Agree, but perhaps someone would like to ask about the situation in Greece. There are 300k unsold houses and another 300k mortgaged ones but in the red (the loan is not being paid)!!!

 

People with mortgages are required to pay at the price they bought plus interest etc, while the value of their property has plummeted by 50% or even more!!! Not much of an investment there!!!

like i said, no one is talking about mortgages, talking about BUYING a house. as in purchasing it, in full, with money you have currently. no mortgage. but you're totally right thats exactly what happened in america, artificially overvalued assets, bought on leverage. likely those people did no research into what the house should be worth based on land and intrinsic value, more they went with the agents word and recent local sale numbers. never a smart move to buy things that are over valued on leverage and also not do your research.

You better believe real estate investors consider those things very seriously.  For us poor saps that need a place to live at some locations, there aren't many options besides paying market price on leverage.  There are arguments for renting, but it doesn't work for everyone.

[BitChick]

In regards to the chart in the OP:

Is there any indication that each of the new jumps, or general movement over time has slowed in volatility?

I am no expert in these charts.  I guess I am wondering if there is reason to believe that the *percent* increases we've seen might realistically decrease as we move to the right?

That is what most non chart people would say.  We've seen our 8000% increase already.  What reason do we have to believe it will continue along the 'same line'  ?

-B-

I am not the OP of course, but I think that we will continue to see the steady rate of adoption until something major (such as the Wall Street ETF) causes the steady increase to change.  The price jump once Wall Street joins in will be greater than what we have seen so far. For those that have a more fatalistic view a serious flaw in Bitcoin or government shut down could cause the price to go off track in the other direction too.  But I think the point is that if everything stays the "same" we will see these continuous bubbles until we reach full market adoption, or close to full market adoption.

[snowdropfore]

come on ,keep update

[JulieFig]

come on ,keep update

No worries. (I was holding off since the large time-scale makes day-to-day updates seem a little superfluous.)

But here is the updated plot... we have hit the 'velocity line', but bear in mind that this line was drawn through a peak expected on 17th July. Based on previous cycles (where peaks occur approximately every 230 days), this date could be as late as 24th July. I may adjust for this as we get more data.

[JulieFig]

Another plot for those who are interested...

I superimposed the current trend (over the last 50 days) with the run-ups to the April and November 2013 peaks.

We still seem to be right on track for a peak between $4000 and $5000...



Good news is we only need to wait a fortnight (maximum) to find out if history will repeat itself.

Note: This plot has the peak occurring in late July, which is based on the assumption that the peaks occur (approximately) every 234 days (an assumption based on historical data).

[snowdropfore]

thank you!!

[madmat]

Another plot for those who are interested...

This new plot is really good. As data are displayed only on 100 days, it is easier to see if we are still on track or not.

If you are interested, i could help to make a simple website to display these two wonderful charts.

[10c]

awsome! keep it up

[Gianluca95]

I Think that all of this is unrealistic, is very difficulty that the price of Bitcoin can go over 4000$ over July ! Now price is only 630$ and there is low liquidity on our market (Bitfinex, Bitstamp ecc.).

However, there is some probability that the price will go to 4000$ by the end of this years, is much possible, but the next month absolutely no !

[madmat]

I Think that all of this is unrealistic, is very difficulty that the price of Bitcoin can go over 4000$ over July ! Now price is only 630$ and there is low liquidity on our market (Bitfinex, Bitstamp ecc.).

However, there is some probability that the price will go to 4000$ by the end of this years, is much possible, but the next month absolutely no !

This seems unrealistic to all of us. Price mutliplied by ten in less than two months is just too hard to catch for human people. If everyone here were convinced the price will follow this graph, everyone would be all in btc, and this is not the case.

Hopefully, we will have an answer in less than two months.

[Gianluca95]

I Think that all of this is unrealistic, is very difficulty that the price of Bitcoin can go over 4000$ over July ! Now price is only 630$ and there is low liquidity on our market (Bitfinex, Bitstamp ecc.).

However, there is some probability that the price will go to 4000$ by the end of this years, is much possible, but the next month absolutely no !

This seems unrealistic to all of us. Price mutliplied by ten in less than two months is just too hard to catch for human people. If everyone here were convinced the price will follow this graph, everyone would be all in btc, and this is not the case.

Hopefully, we will have an answer in less than two months.

Exactly. But there is a probability that the price will go up to 1500$ to the end of July, is not impossible, is probably (x3 respect the actual price).

however, if big investor doesn't enter to bitcoin, price will not multiply easily. Now, (for example me) I waiting the ETF of Winklevoss brother, after it, to the Saturn (not the moon, is too much near !)

[alexeft]

Nice graph OP! Thanks for posting and updating!