There are many tools, charts and models traders use to help predict bitcoin price cycles and leverage the Golden Ratio Multiplier was discussed in our previous article. The following editorial discusses another method of bitcoin price prediction analysis using logarithmic growth curves. In September 2019, a comprehensive paper published by Harold Christopher Berger describes how crypto proposers can envision a bitcoin price cycle using the power-law corridor model.
Bitcoin’s Logarithmic Growth Curve
To give our readers some deeper perspective, Bitcoin.com News is covering some useful price models that technical analysts and crypto traders take advantage of to predict the future prices of Bitcoin.
discussed the previous report gold ratio multiplier And how bitcoin can use the famous gold ratio and Fibonacci sequence to predict future values. The next topic takes a look at how crypto enthusiasts can use logarithmic growth curves to get some perspective on bitcoin (B T c) value cycle.
Basically, logarithmic increment Exponential inflammation has the opposite and is much slower than rapid and aggressive growth. Logarithmic development is leveraged in biology and various sciences but exponential and logarithmic functions can be used in finance as well.
The price timeline of bitcoin is a . Can be seen from logarithmic perspective. In fact, a Log price chart Crypto and traditional finance is one of the most popular in the world of technical analysis. In simple words, the log chart of a crypto asset leverages traditional percentage rates and all spacing is equal to the scale.
also the most basic of logarithms B T c Using charts, individual candlesticks and different timeframes can achieve completely different forms than typical crypto price charts. Additionally, bitcoin traders can look at the logarithmic growth curve model of crypto assets which gives an even greater perspective.
This particular Logarithmic Growth Curve (LGC) Price Model was hosted on Lookintobitcoin cole garner And @Quantadelic. In addition, the price model was also “inspired by the work of Harold Christopher Berger,” notes the website.
Harold Christopher Burger Published a comprehensive study on LGC paper Which is called “Bitcoin’s Natural Long-Term Power-Law Corridor of Growth”. When Berger wrote the paper in 2019, he cited several individuals, such as John McAfee ($ 1 million), and Nuriel Rubini ($ 0), who were predicting odd price predictions.
Berger in his editorial called Bitcoin (B T c) Complete price history from a logarithmic point of view. Essentially, the burger describes B T cPotential future price patterns along a power-law or power law corridor (PLC) model.
Berger said at the time, he is “quite confident in the long term, the price will actually develop almost exactly as stated” in his article. Their study states that bitcoin follows a price corridor that can be divided into two bands.
The analyst’s paper description states, “One that lies at the lower end of price forecasts and is rather thin, the other is much larger and lies at higher end predictions.” “Bitcoin price spends roughly the same amount of time in both bands. This means that large bubbles and bustle are likely to continue.”
Researchers blogging for Quantodian Publications explain that price models help people determine market entry and exit points. “This model allows us to make comprehensive predictions about the long-term future price of bitcoin,” the blog post emphasizes, referring to the two predictions.
- “The price will reach $ 100,000 per bitcoin before 2021 and after 2027. After 2027, the price will never be less than $ 100,000.”
- “The price will reach $ 1,000,000 per bitcoin before 2026 and later before 2038. After 2038, the price will never fall below $ 1,000,000.”
Continuous Movement: Normal and Bull Mode
After doing some math, equations, and linear regression, Berger found that a basic level of support for B T cThe price obeyed a power-law. They performed linear regression with bitcoin price peaks in 2011, 2013 and 2017.
“The market tops also obey a power-law,” Berger said. “If the next market top also follows this power-law, then the market top will be on the same line. The slope of this power-rule is 5.02927337, while the fit over all data gave us a somewhat larger slope of 5.84509376. This overall trend. -Because of the line, bitcoin indicates naming relative to the bull market, ”said the author.
When Berger quantified these measurements defined by the three bitcoin market price highs and coefficient of determination, The researcher came up with two power-rules. They also took advantage of the random sample consensus, or Ransack To get more data points.
The researcher then found two modes, a normal and a bull, and was able to further produce different power-law models for B T cPrice of Berger shows a chart that includes “power-law fit,” “power-law fit minus bias,” “power-law fit only three vertices fit” and “strong fit.”
“Now we have different models to predict the future price of bitcoin. All we have to do is expand the graph,” Berger blog post notes. Researchers say:
We can further divide this corridor into two bands, one corresponding to the “normal” mode and the other corresponding to the ‘bull’ mode. The price has so far spent half the time in the lower ‘Normal Mode’ band, and the rest in the higher ‘Bull Mode’ band.
‘Black Thursday’ and current affairs status
The Power-Law Corridor of Growth blog post written by Berger has followed Bitcoin’s price movements very well since it was published. The author of Quantodian Publications notes, however, that when he was modeling a support line for the price of bitcoin to follow a power-law, there was an example in 2010 where the price of B T c Broken down the line.
Since the blog post was published on September 4, 2019, there is a second example where the price of bitcoin broke the “strong fit” line.
This specific time was during the financial meltdown on March 12, 2020, otherwise known as ‘Black Thursday’, when B T c And almost every property in the world saw a drop in values. March 12 was considered an odd instance and possibly an outlier due to the fear and shock of the Covid-19 brought to the financial markets.
Finally, the current chart shows that bitcoin has gone through a bullish cycle in recent times, but not at the peak like the rest of the bull cycles. In fact, the chart shows that the price climax on the north side is much lower than the other peaks and the price is beginning to move south.
What do you think about using log charts, power-laws and logarithmic growth curves to predict the bitcoin price cycle? Tell us what you think about this topic in the comments section below.
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