Great post.
However, I couldn't help but wonder why you didn't mention the block reward halving. It seems like each block reward halving could boost (or reset to a degree) the Price increase factor.
Topic: Simple price analysis and metric correlations - page 2. (Read 2153 times)
I have seen several threads analyzing the exponential trend but not any analysis in bull markets and bull/bear scenarios. In this thread I will share my simple price analysis and metric correlation for bull markets. I have succeeded in forecasting the bull/bear scenarios since the April 2013 bull market. I use elementary mathematical methods and then I make use of some other metrics which correlate with bull markets.
Timing correlations
There seems to be a set cyclical pattern on the timing of bull markets. The definition of a bull market in this thread is an uptrend lasting over a month and moving the price up a lot. The following bull markets have occured:
There is an obvious cyclical correlation. Each bull market is 7-9 months apart. During these bull market occurs the only lasting bull markets. The rest of the time, BTCUSD is constantly in a bear market. The bull markets which reach a new ATH are henceforth called high magnitude bull markets. They occur approximately half of all the times and they are the ones we are interested in analyzing.
Analysis of increase ratio between high magnitude bull markets
Bull market Peak Increase ratio from previous bull market Increase ratio of increase ratio
#1 32
#4 260 8.125
#5 1150 4.4231 0.5443786
#10? 2300+? 2+?
The increase ratio of the increase ratio (the second derivative) seems to be approximately one half. This means that the increase ratio of bull market #x will be approximately 0.5*((#x-2)/(#x-1)). I'd make a graph but its easy to visualize what is going on here.
Price increase factor analysis
Bull market Start Peak Price increase factor Increase ratio of price increase factor
#1 0.8 32 40
#4 13.5 260 19.25925926 0.4815
#5 125 1150 9.2 0.4777
#10? 600? 2400? 4?
The increase ratio of the start and the peak of a bull market seems to follow a pattern too.
Metrics correlated with high magnitude bull markets
Metrics correlated with successful bull markets are:
These metrics show that high magnitude bull markets correlate with increased usage of bitcoin and a sharp increase in media mentions. The downside with these metrics is that they lag behind usually, or at best follow the price.
Future prediction
My prediction is that in the future the increase ratio will converge downwards. The same goes for the price increase factor. The forthcoming high magnitude bull markets will take us up to higher and higher 4 digit numbers until it no longer drops to 3 digits after the bear market. New ATHs may then be $1000 higher than the previous one but the increase ratio closer to 1. Beyond that these cyclical patterns should cease as price becomes more stable and behaves like other assets, e.g. gold. Even though gold has very similar patterns, they take over a decade to complete.
The only thing I believe may impact timing as of now is that there might not be an anticipation bubble starting before the halving. Instead there may be a delay on the onset of the bull market. Due to the halving there will be a very noticeable effect on the supply of new coins, since as we know the large mining operations (which make up almost all mining) sell the coins. On another note the price is behaving exceedingly similar to post august 2012 bubble, where the gains of the bubble remained and the price did not move downwards. This is vastly different from most scenarios with bitcoin where it seems to be in a constant negative trend.
Inputs welcome!
Timing correlations
There seems to be a set cyclical pattern on the timing of bull markets. The definition of a bull market in this thread is an uptrend lasting over a month and moving the price up a lot. The following bull markets have occured:
- #1) June 2011 bull market going from $0.8 to $32
- #2) January 2012 bull market going from $2 to $7
- #3) August 2012 bull market going from $5 to $15
- #4) April 2013 bull market going from $13 to $260
- #5) November 2013 bull market going from $125 to $1175
- #6) June 2014 bull market going from $425 to $675
- #7) March 2015 bull market still ongoing from $166 to $300?
- #8) November 2015 bull market going from $230 to $500
- #9) June 2016 bull market going from $450 to $780
- #10) Predicted late 2016/early 2017 bull market, possible ATH?
There is an obvious cyclical correlation. Each bull market is 7-9 months apart. During these bull market occurs the only lasting bull markets. The rest of the time, BTCUSD is constantly in a bear market. The bull markets which reach a new ATH are henceforth called high magnitude bull markets. They occur approximately half of all the times and they are the ones we are interested in analyzing.
Analysis of increase ratio between high magnitude bull markets
Bull market Peak Increase ratio from previous bull market Increase ratio of increase ratio
#1 32
#4 260 8.125
#5 1150 4.4231 0.5443786
#10? 2300+? 2+?
The increase ratio of the increase ratio (the second derivative) seems to be approximately one half. This means that the increase ratio of bull market #x will be approximately 0.5*((#x-2)/(#x-1)). I'd make a graph but its easy to visualize what is going on here.
Price increase factor analysis
Bull market Start Peak Price increase factor Increase ratio of price increase factor
#1 0.8 32 40
#4 13.5 260 19.25925926 0.4815
#5 125 1150 9.2 0.4777
#10? 600? 2400? 4?
The increase ratio of the start and the peak of a bull market seems to follow a pattern too.
Metrics correlated with high magnitude bull markets
Metrics correlated with successful bull markets are:
- Google trends http://www.google.com/trends/explore#q=bitcoin
- Number of transactions https://blockchain.info/en/charts/n-transactions?showDataPoints=false×pan=all&show_header=true&daysAverageString=1&scale=0&address=
These metrics show that high magnitude bull markets correlate with increased usage of bitcoin and a sharp increase in media mentions. The downside with these metrics is that they lag behind usually, or at best follow the price.
Future prediction
My prediction is that in the future the increase ratio will converge downwards. The same goes for the price increase factor. The forthcoming high magnitude bull markets will take us up to higher and higher 4 digit numbers until it no longer drops to 3 digits after the bear market. New ATHs may then be $1000 higher than the previous one but the increase ratio closer to 1. Beyond that these cyclical patterns should cease as price becomes more stable and behaves like other assets, e.g. gold. Even though gold has very similar patterns, they take over a decade to complete.
The only thing I believe may impact timing as of now is that there might not be an anticipation bubble starting before the halving. Instead there may be a delay on the onset of the bull market. Due to the halving there will be a very noticeable effect on the supply of new coins, since as we know the large mining operations (which make up almost all mining) sell the coins. On another note the price is behaving exceedingly similar to post august 2012 bubble, where the gains of the bubble remained and the price did not move downwards. This is vastly different from most scenarios with bitcoin where it seems to be in a constant negative trend.
Inputs welcome!
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