All the other crypto bloggers have been posting BTC charts for the last week or two
Now that I've given most of them the opportunity to have had their say, let old Bit Brain give you the correct information! 😉
We'll do this my favourite way: visually and in simple terms. One chart - no clutter from tools and indicators. Right! Here we go:
Made with TradingView by Bit BRain
Bitcoin trendline analysis 📈 latest update
Straight lines
I have always seen this chart as a curved one; outstripping the base 10 logarithmic growth rate (and therefore having a slightly upwards curve). Of course, I may be wrong and BTC growth will be linear on a logarithmic chart - as silly as linear on logarithmic may sound!
Because of the eventuality of having BTC track a straight growth line across a logarithmic chart (which I doubt is correct), I am including straight limiting lines. The straight red line at the bottom joins the points of lowest price (accounting for logarithmic growth). A few interesting things can be deduced from this line IF it is indeed relevant. Assuming that it IS relevant:
- The 2018 bear market has not altered the trajectory of the line.
- BTC price could drop as low as $3850 if it were to crash today.
- BTC price could continue sideways at the current level until mid-April 2019.
Similar to the straight red line, there is the straight green line. The straight green line links the maximum price points (allowing for logarithmic growth). Once again I don't believe this line to be important, correct or very relevant (due to BTC's beyond log 10 growth rate), but am including it in case I am wrong. The previous bull market did push this line higher, much higher. Not much else can be seen from this line alone. But if we look at the red line in conjunction with the green one...
The black dashed lines indicate the distance between the red and green straight lines. Immediately obvious is that the distance between those lines is narrowing. Now no matter what sort of growth rate you believe this chart to represent (sub log 10, log 10 or beyond log 10); these two lines can never touch. It is a physical impossibility. They could touch if you project them far enough into the future, but not along the body of the existing chart.
In order for these two lines to stay apart, the market will have to do one of two things:
- decrease in growth rate enough to force the red line to point further downwards; and/or
- increase in growth rate enough to force the green line to point upwards.
Due to the massive price movements required, this is more an "or" situation than an "and" situation (at least it will be for several years). One of those lines has to change angle, that's not open to debate. This creates an obvious question: Which one? We'll return to this question in a moment.
The main trend line
The main trendline is a (blue) gently curved line that I deem to, as accurately as possible, represent the average price curve of BTC. Note that this is MY line, based on MY guesswork. No mathematical calculations nor any certainties here I'm afraid. The technical term for that line is "a calculated guess". It's the general path that I think BTC is following. Some of it is tricky to determine, especially the starting point. But guess or not (and don't let anybody dare to tell you that I'm wrong, because the very best that they have to offer is also only a guess!), I'm happy with that trendline and consider it to be a "good guess".
Significant data to be derived from the trendline:
If you look at the curved blue line and the red straight line, you will see that they run roughly parallel to one another. The blue line and the green straight line do not. This lends credence to the idea that the red line is moving roughly along the correct trajectory and does not have to point further downwards. If the red line won't point further downwards, then the green line will have to point further upwards! The fact that the tip of the blue line is also approaching the tip of the green line on their current trajectories, also means that the green line is likely to have to shift upwards. The green and blue lines can touch, but they can never cross one another, at that point the green line will tilt further upwards.
This is good for BTC price. It means that it is likely that more powerful bull runs will occur. Please realise that this is only based on guesswork, but that the guesses have solid roots, some of which are immutable facts e.g. either the green or red lines must move. This old post also explains why the green line is more likely to be the one that changes: https://steemit.com/cryptocurrency/@bitbrain/bitcoin-price-predictions-chart-display-part-3-the-s-curve-more-good-news (possibly my all-time favourite post).
The limiting trendlines
The dashed red and green lines represent the limiting lines of BTC price.
The green line is the maximum BTC price, an almost useless line for prediction purposes because it climbs so ridiculously and unrealistically fast. It links the high price points on the chart. Unfortunately the short history of BTC tends to skew the shape of this curve. After several major bull runs it will be far more useful, but for now, all but two of the points that it links are somewhat arbitrary and of insufficient significance.
The red dashed line is also based on guesswork towards its beginning. I distrust the early price movements of BTC. Those ultra-low volume days created a situation where small price movements are overrepresented and outliers hold unrealistic sway over the shape of the chart. I attempt to compensate for this by guessing a realistic starting point for the line. Know that there is margin for error (it may start a bit lower than where I placed it).
BTC price should not drop below this line, but it can force it to point more downwards, thereby altering the shaped of the curve by making it flatter. BTC has very recently done so; it can happen again.
Ideally the blue trendline should lie between the dashed read and green lines. But I'm not going to fit the curves just to make them pretty and more simple. I'm calling it as I see it, and I'm pointing out to you the inaccuracies and guesswork necessary to create these lines as they are. I do consider the blue line to be slightly conservative - it could well be more bowed i.e. it would point steeper upwards at the end - but I would rather err on the side of cautious non-hype, so I am happy with it as it is.
Are you wide awake?
No, I haven't trade to trick you with fake TA again, this is real. The keen eyed among you may have spotted where the blue line crosses the end-of-2018 line: at $25000. The sharp of eye and memory may remember that I predicted an end year BTC price of $20000 - $25000. We shall see...
Yours in crypto,
Bit Brain
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by Bit Brain
