This zoomed out Bitcoin/USD chart highlights the crashes of June 2011, April 2013, and late November 2013.
Also noted, is the hype of Bitcoin during these crashes by looking at Google trends on Bitcoin: google.com.au/trends/explore
Bitcoin search popularity seem to have a similar exponential behavior as the price movement during each crash.The search trends tend to keep rising for a few more days after the peak of the Bitcoin price.
There seems to be a correlation of a high Google search interest rate to the high price volatility. The theoretical "healthy" Google search interest seems to be around 4%. Right now we are at 72% indicating for some remaining price volatility to come.
In conclusion, a lack of hype could be a good indicator for signaling stabilty or rises in price. However it is hard to determine the peak prices since during a crash since Google searches continue. This is likely because the continuing searches would consist of people looking for information regarding the price crashes.
Edit: The Google search interest figures are based on the period between January 2011 and December 2013. The search figure of 4% for price stability only held true for the time after the first crash. However the search figure for price stability rose to 9% for the duration after the next crash. If the search rates remain linear, then theoretically the next stable rate should be marked around 18% to 20%.
Edit #2: As pointed out by Shantee this is not an indicator. It is a correlation observation.
Comments
EdC
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And yes this is a correlation observation not an indicator.
EdC
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What I meant to say is that the searches continue to increase for a while after the prices peak and start to pull back. Which makes this type of observation not good for picking tops. However when searches have decreased you can possibly gauge an entry.
This isn't a textbook tech analysis and you're right. It would be difficult to formulate the mathematics to make it into a bot grade indicator. It's likely that Google will continue to tweak their web search metrics in the ongoing future. However changes to metrics will be progressive rather than immediate. So this analysis may hold for the next few months.
Shantee
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"In conclusion, a lack of hype could be a good indicator for signaling stabilty or rises in price. However it is hard to determine the peak prices since during a crash since Google searches continue. This is likely because the continuing searches would consist of people looking for information regarding the price crashes."
So in conclusion google trend is not a good indicator for technical analysis of bitcoin, maybe it's not an indicator at all ?