Projecting prices from stable periods

BITSTAMP:BTCUSD   Bitcoin / U.S. Dollar

Bitcoin is potentially in a period of consolidation at the end of a large bubble cycle. Movement will seem sideways and down until indicators signal the next wave of adoption. Sentiment will remain low. Recovery will be slow for the next 7 - 15 weeks. Bitcoin obituaries are surging and general sentiment is very low.

A breakout through local resistance at 10k can happen as soon as mid July but may take until October. Significant price discovery is being established at the bottom of a new long-term trading range and may confirm the bottom of a new channel that should last through the next halving event, in 2020.

The US government seems to have greenlit development of trading desks and financial tools at major.

Crackdowns on ICOs and altcoin speculation are just beginning to kibosh unchecked growth in alt markets. Bitcoin's market domination will likely be confirmed after G20 nations implement effective regulations against rampant gambling and illegal financial tools.

Large leveraged positions against the altcoin markets still aren't available to most traders who operate in compliance with local laws, but they will probably be made available over the next 1 - 2 years.

A : Medium-term consolidation

Resistance to growth remains through June, part of July, and possibly into August. Bearish and moderate performance is accompanied by nearly unprecedented price stability. Two heavy resistance lines are broken before bullish sentiment can return.

B : New ATH sometime between September 2018 and June 2019

Heavy resistance is broken--drawn from the 2014 ATH and the January 2018 breakdown from our local ATH—and moderate sentiment keeps bitcoin in a consolidation phase under the previous ATH for many months. A new wave of adoption from new markets is eventually identified. Full capitulation from alt market speculation exposes frivolous and or fraudulent Crypto assets and securities. Government crackdowns and arrests begin to pile up in altmarket ICOs. Public outcry against abuse and fraud triggers international concern. Capital escapes from small alts to the top 5 - 10. There are less than 20 Cryptos with a market cap over 500 million USD.

C :The ascending wedge drawn from the 2013 ATH is difficult to break.

We bounce off an ascending wedge and establish a new ATH between September 2018 and July 2019. The bottom of the channel is retested near the current ATH . Capital flight into Bitcoin from alts will eventually pushes bitcoin through the resulting falling wedge .

Bitcoin's user base rapidly grows. It’s fueled by speculation that institutional adoption and an ETF are on the way. Speculation attracts a new wave of users who are disenchanted with traditional investments. Bitcoin's young male demographic starts to diversify and enter new markets internationally.

Segwit and Lightning adoption demonstrate 1000x increase in possible transaction support while significantly decreasing transaction fees. LocalBitcoin processes 15 to 30 million USD in transactions daily. Press praises Bitcoin as a tool ready or nearly ready for “Main Street.” A use case for Lightning in retail businesses is implemented in some markets.

D : Bounce off the top of the new long-term channel by October 2019

Speculative fever ignites again and Bitcoin hits the top of a new, yet to be formed, long-term channel for the first time since December 2017. Our new ATH is somewhere between 50k and 160k USD/BTC. The correction to the bottom of the channel triggers a fresh wave of obituaries.

Hitting the top of the channel signals a long-term bear market and moves the price into a comparatively moderate range, well under 100K USD. Bouncing off the top of the channel completes before speculation about the halving takes hold of sentiment in early 2020.

By the end of 2019, 1 million USD price targets are commonly issued from established financial institutions in the United States.


This post uses the wrong definition for the indicator at the bottom. It should read "BBand width crosses down through RSI width at current current BBand width and sustains low volatility for 6+ weeks"

Here's the same post with the correct definition for the indicator.

Hi. Nice overlay of options. They all look good long term. I am currently a bit biased towards your most bearish view .

jarederaj darobsta
@darobsta, Nice.

I've found that doing the math on similar log charts manually has required extreme over-fitting. I'm of the opinion that one should throw out price data from before 2012 and take a very critical view of price data at the end of 2013. We know that sub $10 USD prices were very easy to manipulate up and down, and that there was grotesque market manipulation/fraud being practiced at the largest exchange, Mt.Gox.

Also consider that 6/7 times, the market consolidates and breaks up after periods of stability. If the market doesn't break down in the next few weeks to new lows then I don't think your scenario can play out. I also don't see what fundamentals are in play that can drive the market down that far.
darobsta jarederaj
@jarederaj, hi. All good points regarding the data itself... But you gotta say... it kinda looks like a curve rather than a straight line. Price manipulation or fraud would just create more short term volatility, not change the shape of the baseline, right?

Anyway, you're right .. the market needs to confirm my idea and it currently is not. I have plans if we go full bull-tard.

Also, when you talk about fubdamentals, I assume you are talking about bad news or discovery of broken tech or something like that? I am of the opinion that this is a 95% speculation market
darobsta darobsta
@darobsta, ... 95% speculation based market... and it didn't take fundamentals to drive us to 20k and it doesn't need fundamentals to take us back down.

All the best
jarederaj darobsta
@darobsta, It's a speculation market that is nearly 100% OTC and has a market cap that was over 300 billion at one point. That's not just rare, it has never happened before. Bitcoin consistently behaves in ways that shouldn't be possible. Careful with confirmation bias.
jarederaj darobsta
@darobsta, I think the fraud at the end of 2013 is dramatically worse than you're describing here. Willy Bot and MtGox had a systemic impact on market prices at the time. I'm not sure how to quantify it, but I'd knock at least 15-20% off the top of the market. even that's pretty generous. It's only ~200 USD. Without WillyBot I kinda doubt that the December 2013 bubble would have happened at all.

What I'm really curious about is the rapidly descending BBand width on the weekly chart. It's at a historically rare point, but it could go any direction at any point. To confirm the pattern I'm pointing at we have to go sideways for 6 more weeks... which is an incredibly improbable scenario. We should either break up or down if Bitcoin is doing it's normal thing. After a sideways period with low volatility AND low RSI, Bitcoin historically breaks out to new highs. There's not a lot of data to go on, though, so the 2 for 2 record we have on that is at risk for confirmation bias. The 6/7 number on periods that don't consider RSI is telling, though.

I don't know, it's pretty low probability, but it seems like it's being confirmed so far... oh that confirmation bias.
darobsta jarederaj
@jarederaj, hi yes ... your projections statistically say we move up, but as you say there's not a huge amount of data and the parameter space has many dimensions to pull confirmation from.

Agree on the fraud and the over pricing during the 1k bubble... I am not even gonna try and predict peaks! Too many factors. The base low curve looks more approachable to analyse computationally and is my next project.

All the best
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