Excellent analysis and a strong counterpoint to the 70% drawdown crowd. We're already at extremely low levels when adjusting for diminishing volatility. I think it's possible we bump along in the 50k range for a while before returning to the power law trend.
At $58k, using the two log-normal distributions and reciprocal Age analysis, price is in an unexplored territory - at 0.01 probability. What does this reveal (if anything) about the time to capitulation, the rate of the bull rebound, the effect on adoption rate, or other? If no predictors are available now, is there the promise of predictors such as this with further research?
This analysis does not address the time to return to power law trend but I have analyzed 30 crossings > ~5% away from trend and the average time to return to trend was half a year (186 days) after a low or high point established. But a very broad distribution, median was lower 2 months longest was well over 2 years.
Regarding predictors at less than one year horizon I have not found something that outperforms naive residual (essentially a random walk). Beyond that power law itself or somewhat better adding in one log periodic mode.
Interesting perspective. It’s easy to focus on Bitcoin’s next move and ignore the assumptions behind the model. Thanks for sharing a thoughtful take that challenges the usual narrative.
Excellent analysis and a strong counterpoint to the 70% drawdown crowd. We're already at extremely low levels when adjusting for diminishing volatility. I think it's possible we bump along in the 50k range for a while before returning to the power law trend.
At $58k, using the two log-normal distributions and reciprocal Age analysis, price is in an unexplored territory - at 0.01 probability. What does this reveal (if anything) about the time to capitulation, the rate of the bull rebound, the effect on adoption rate, or other? If no predictors are available now, is there the promise of predictors such as this with further research?
This analysis does not address the time to return to power law trend but I have analyzed 30 crossings > ~5% away from trend and the average time to return to trend was half a year (186 days) after a low or high point established. But a very broad distribution, median was lower 2 months longest was well over 2 years.
Regarding predictors at less than one year horizon I have not found something that outperforms naive residual (essentially a random walk). Beyond that power law itself or somewhat better adding in one log periodic mode.
Interesting perspective. It’s easy to focus on Bitcoin’s next move and ignore the assumptions behind the model. Thanks for sharing a thoughtful take that challenges the usual narrative.
Take the bottom of 2022 and apply power law on it forward to 2026, you get about $60k. It’s remarkably accurate and interesting.