Topic: Rebound or Bull Trap? A Log-scale Analysis of the Infamous Hype Cycle Chart (Read 2457 times)

I believe this is Zangelbert's fault, he misplaced the closing IMG tag. The image works:

I swear to God, every time I see a photobucket link its broken. Does that company even work anymore? Geez.

Just saw blackreplica's chart, very good addition to this. I'm taking the (c) road just because of how frothy sentiment still feels, but short term (b) remains possible, or even (c) with very low probability.



Edit: Image link fixed

I agree, 100 is where we should be at!

The following image was posted in another thread, arguing that the present bounceback from $100 to $180 is only temporary and we have much further to fall:



Below I will attempt to analyze this chart in a way that is suitable for trend analysis of Bitcoin.

First of all, every fundamental indicator I know of suggests that Bitcoin adoption is an exponential growth phenomenon. Anyone who disagrees please do us both a favor and STOP READING HERE and instead supply an argument why adoption isn't exponential.

Now, exponentially growing fundamentals strongly suggest that the mean trendline (gray dotted line) in the graph that the price reverts to should be exponential, not linear. On a log chart, this means "not flat, but at a fixed slope."  



The above log-scale chart shows that so far in 2013 the slope was fixed until the Cyprus-inspired media blitz started just a few weeks ago. Since then it has been curling upward, and I have been warning gradually more loudly that this indicates some froth being introduced to the mix with Bitcoin-clueless money piling in, as the fundamental growth has for the most part remained "merely" exponential.

So where are we now? The 2013 Exponential Trendline (red straight line on the graph) above has the price at around $80 now, to reach $200 - this time solidly - by early June, $2,000 by autumn, and $10,000 by Christmas. Still silly, crazy fast growth.

We are now still floating about 2.5 times above that price, "cruising for a bruising" back down to that trendline in case of any bad news or just random jitters+goxlag.

Under this exponential interpretation of the hype chart, supposing this rebound is actually a "bull trap," if we skid down to "despair" at the end of April the desparation low should be around $30-50 (since the exponential trendline hits $100 at that time), with perhaps a mid-May return to the exponential trendline at about $130, this time soaring* higher with plenty of fundamental backing as the weak hands are really going to be shaken out.

*Slower than post-Cyprus but still crazy fast (EXPOMUTHAFUCKINENTIAL).