Bitcoin Fair Value and Peak Logarithmic Regression BandsWhile BTC has dipped back down recently, we are still very much on track. In fact, we are still fairly far ahead with regards to our "fair value" logarithmic regression support band, fit to "non-bubble" data.
This market cycle will likely be a long one, so buckle up for the journey, and maybe one day BTC will flirt with the upper "peak" logarithmic regression band. No one can reliably predict what the short-term will bring, but I am certainly bullish on BTC on the macro-scale.
LOGARITHMIC
BTC Logarithmic CurveTHEORY
- I never understood why most students needed to learn what a Log was until I've studied a BTC chart.
- A Log curve in simple term goes 0 to .99999999
- It never touches 1. It is infinite. Meaning it goes forever always getting closer to 1.
- My assumption is that BTC will become stable one day. It may take many more halving's for that to happen.
- With that being said, that's why BTC is an excellent investment opportunity in the year 2020. (Of course with a proper bottom entry)
- Each halving comes a significant reduction of (RIO) Return On Investment.
CHART
- After many hours of studying this chart. I observed a pattern. BTC usually switches trends yearly on the macro level.
- I base that theory on this chart. If historical evidence does in fact repeat then my theory analysis will be true.
- I like to think of this chart of like playing darts w/ a blindfold on. It is a million dollar question.
OPPOSING VIEW
- Many say BTC is in a Wyckoff pattern. " Fill the gap"
I tend to believe that Bitcoin will revolutionize the world the same way the internet has been able to. I will remain optimistic because I believe in the technology.
Like & drop a comment on what you think will happen.
AMZN: Arithmetic and Logarithmic Charts ExplainedIn this post, I'll be shedding light on the difference between arithmetic and logarithmic scale charts, and how to best use both charts to your advantage.
Arithmetic Chart
- The chart on the left is a chart that uses the arithmetic scale
- This is the chart most common to us all, and one that's easiest for traders and investors to comprehend
- An arithmetic chart represents price on the y axis, using equidistant spacing between the prices
- This is demonstrated on the arithmetic scale above; the distance between 1 and 2, is the same as the distance between 8 and 9
- Arithmetic charts demonstrate absolute value
Logarithmic Chart
- The log chart on the right side has a different approach to interpreting price movement
- The y axis uses equidistant spacing between designated prices
- This is demonstrated on the logarithmic scale above; the distance between 1 and 2, is the same as the distance between 2 to 4, 4 to 8, and so on.
- The logarithmic chart demonstrates the percentage change in the underlying asset's price
Case Study: Amazon (AMZN)
- We can take a look at Amazon's arithmetic and logarithmic charts, dividing them by significant phases to better understand the differences
- We can first see that the area marked by 'extreme volatility' on the log chart, is much more drastically demonstrated than that of the arithmetic chart
- This is because price fluctuations in terms of percentages were drastic at the time, due to the Dot-com Bubble.
- For more information on the Dot-com bubble and today's stock bubble, you can check out my other analysis below:
- However, because in terms of the absolute value changes during the Dot-com bubble are minuscule compared to the price fluctuations today, the phase of extreme volatility is barely noticeable in the arithmetic chart
- In the period of a 'steady uptrend', we can see a clear and steady uptrend in the logarithmic chart, indicating that the stock moved up at a consistent pace, percentage-wise
- The arithmetic chart, while not drastic in the uptrend's degree, demonstrates parabolic momentum building up
- We then have the 'exponential growth' phase. Here, we see a move from $400 to $3,400 on the arithmetic scale.
- However, the logarithmic chart merely demonstrates a steady uptrend without much volatility.
- This is because while the absolute value of the stock has risen significantly over time, the percentage change in the rise was consistent.
Conclusion
While the arithmetic chart is more familiar for the average trader/investor, logarithmic charts help us clearly view long term data, especially when price points show immense volatility during the short term. As such, log charts can be effectively used in for technical analysis of cryptocurrencies, as well as volatile tech stocks with long price history. The understanding of the log chart is an effective tool, but it must be used with caution, since most people intuitively interpret a chart as an arithmetic one.
If you like this analysis, please make sure to like the post, and follow for more quality content!
I would also appreciate it if you could leave a comment below with some original insight.
Ethereum Logarithmic Regression I have fit the weekly logarithmic regression and used 20/50/100/200 MA indicator for ETH. For a bullish trend, I expect to see a double cross on the MAs, with the 50 and 100 both crossing the 200, followed by steady separation of ordered MAs (green yellow orange red) from top to bottom.
Updated BTC Cycle Targets and DatesIn this chart I have used logarithmic regression to identify cycle tops and bottoms in BTC. Using the hypothesis of lengthening cycles, I have 3 price targets for a cycle top in mid-to-late 2022. With the current weighting of my regression, it shows that BTC is undervalued right now, with the fair value shown using a blue line.
BTC Moves on This Path....?Playing around with the log chart, just trying to get some concept of where the price extremes are and where important lines (like ATH) converge. The last market cycle had bitcoin making its ATH seven weeks before the previous ATH converged with the bottom trend line. If the same thing were to happen this cycle, and the high comes in exactly on the top trend line, then we'd see a high of around $200K on the 13th of November, 2023.
That's still a ways off, but I think I can live with that kind of return in just over three years :)
Bitcoin Growth Angle of Market CyclesFrom the origin of Bitcoin to the peak of each bull run, a trend line was drawn. Using the "trend angle" tool I found the angle corresponding to each bull market.
Bull Run 1 (2010-2011): 74 degrees
Bull Run 2 (2012-2013): 56 degrees
Bull Run 3 (2015-2017): 41 degrees
Bull Run (2020-2022?): 30 degrees?
By comparing the angle of the previous bull run to the following bull run, a repeating ratio reveals itself.
Bull Run 1 = 74
Bull Run 2 = 56
74/56 = 1.32
Bull Run 2 = 56
Bull Run 3 = 41
56/41 = 1.36
These numbers could be a coincidence, but seeing how Bitcoin has followed a logarithmic regression that seemingly revolves in 4-year cycles, it wouldn't surprise me if more patterns revealed themselves.
So where do we go from here? To see where we might be heading, we simply continue the model.
Bull Run 3 = 41
Bull Run 4 = x
Bull Run 4 is the bull run that the 2020 Halving has started. As it has not happened yet, we do not know the Angle of Growth. However, by recognizing that the ratio between two consecutive bull runs is around 1.3, we can use this information to calculate the angle.
41/x = ~1.3
41/1.3 = x
x = ~30 degrees
What is remarkable about the "trend angle" I drew at 30 degrees, is that it touches the crash in March 2020 from the pandemic. In fact it acts as almost perfect support! (light blue trend line)
On the other hand, I drew a curve that connects the peak of each bull run (white dotted curve). The area where the white curve and the trend line of Bull Run 4 converge is around Spring 2022 @ $100,000.
Hope you all are enjoying this bullish sentiment as much as I am.
On a side note, seeing these patterns through mathematics excites me because math is impartial. Using math to map the future eliminates the possibility of a Confirmation Bias finding "patterns" that aren't actually there. The truth is in the math...
Tesla vs. FordFirst off, please don't take anything I say seriously or as financial advice. As always, this is on an opinion based basis. That being said, Tesla is growing substantially when you compare market cap and share price. However, what most people don't seem to understand is that Ford has higher A) Production output B) Revenue and C) Likely higher enterprise value. Also the invested capital in Ford is 322.61 B. The Enterprise value of Ford is realistically higher . Tesla's realistically closer to a valuation of $125 billion when you look at the 2019 revenue, growth percentage, and expectancy. However this doesn't change the fact that A) The market cap for Tesla is way higher than Ford B) Tesla can now buy Ford if they wanted to C) Ford would have done better as a privately held company. When looking at the log curves for comparing Tesla and Ford, you can see who is obviously growing. At this point, it looks like Tesla annihilated Ford. Obviously alot of this comes down to speculation. Traditional Wall Street that hated Elon Musk is now overvaluing Tesla by at least 25% while dramatically shortening its competitions. Elon is expected to meet production quotas, and they are becoming a trophy in the automotive industry. I'm also bullish for sure.
**Bitcoin Halving Day! Reward reduced from 12.5 to 6.25 BTC*****Look at that beautiful logarithmic scale and regression, that stunning Stock to Flow ratio. The 200 day moving average is so captivating! Math just doesn't get better than this!***
Bitcoin is solidly back within the bands and the mining reward is being reduced from 12.5 to 6.25 BTC today!
Such a delightful graph! Can I get an "AMEN"!
#Monthly: Bitcoin, Trends and The Secret StrategyThere wes a couple of predictions recently: we will never see Bitcoin cheaper than $ 5,000 (@tonyvays) and its price will jump to $115,000 (@dan_pantera) by August 2021.
We'll see.
Wanna show you how these numbers correlate with the chart and where are the nearest points of strength. Candles without sticks, open and close only, log-chart.
So, Trends
a. Prehistoric trend, formed by lower lows of 2013 and 2015. The lowest point on this trend for now = $1,800. Creepy.
b. Trend formed by higher high of 2013 and lower low of 2019. The lowest point on this trend = $4,700 for now. Bitcoin has already hit this trend and rebounded sharply. I bought from this zone, like many others, it was an excellent price.
c1. Current global downtrend, along the edge of which the price has been creeping since June 2019. It was formed by highs of 2017 and 2019. The highest point on this trend = $9,300. I closed my long here on April 29, excellent move. Wait now .
c2. Projection of the c1 trendline, forming a descending channel, the lowest point of which = $2,800 for now. Trend is formed by bottoms of September 2017 and January 2019.
d1. Candle close level 2017 = $13,770.
d2. Candle close level = $3,500. In fact, d1-d2 is the range of consolidation. A break downward possibly opens the gates to the hell down to $1,150 level. A break upward creates a spark for a new bullish momentum.
e. Local trend formed by nearest bottoms of 2019-2020. The lowest point on this trend = $6,700 for now.
f. Resistance line formed by the February doji in 2018 and higher high of 2019. The highest point on this line = $10,800 for now.
h1. Trendline formed by highs of 2013 and 2017. The highest point = $62,000 for now. AYS?
h2. Trend formed by extremes of 2013-2019, excluding the hysterical peak of 2017. The highest point = $15,000.
z. Trend lasted from October 2015 to November 2018. Broken. The highest point = $29,000 for now. AYKM?
And The Secret Strategy
If you're afraid of enter the market, but want to convert your holy dollars into the crypto for 3-5 years, buy now. If everything becomes (very) bad:
1. Price is $9,000, let's say you invest $150.
2. Price is $5000, invest $250 more. The average entry is $6,500.
3. Price drops to $3,000, invest $600 more, the average is $3,600.
4. Suddenly the price goes underwater to $1,500. No panic, invest again $1,000 more. The average is ~ $3,000, good price. So you invest to the promising asset $2,000 in total.
One more thing. Ok, a few...
First. The main thing is not the price you buy or sell, but the correct calculation of the position. Don't try to catch the ideal price, it doesn't exist, like a free lambo.
Second. Do not listen to those who talk about the frenzy of averaging against the trend: with proper management, you'll take your profit or breakeven.
Third. Try to average your enrty near the strongest level. Don't know how to find it? Watch the move and stand aside if price falls down less than 10%. Price squeezes by 25%-30%, you average without batting an eye.
Fourth. Watch the market when you stuck in a counter-trend trade. If forecasts go worse and risks increase try to open another trade on the trend. Hedge your position.
Fifth. Follow the trend not only for averaging. If the price goes in your direction, increase the position. Yep, worse average price, higher final profit.
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