Source: lookintobitcoin.com
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Logarithmic analysis is a statistical approach that uses historical data to forecast and predict future prices. In this case, the Logarithmic growth curve takes all the historical price data of Bitcoin and uses log growth analysis to develop curves that project a potential path of future price growth.
The indicator only uses historical price data. Beyond direct price, it does not use any analysis of market participant behavior (in contrast to other models such as RHODL Ratio or 1yr HODL Waves).
Historically, we have seen that price tends to bounce between the upper and lower bounds of the logarithmic growth curve. The reason for this is that Bitcoin moves through market cycles. It is worth noting that price does not have to stay inside the curves. In fact we can see an example of where it briefly did not during the March 2020 covid crash, before then price corrected and came back into the log growth curves.
Assuming Bitcoin continues to be adopted over time this chart can be used as a price prediction tool where there is potential for there to be resistance on the upper boundary and support on the lower boundary. The price levels of those boundaries can be seen by hovering over them. Because the curves can be calculated on a forward-looking basis, it is possible to forecast where the price of Bitcoin may move towards in the future.
Inspired by the work of Harold Christopher Burger
December 2019
Check out this thread by Cole Garner on Twitter
Inspired by this article from Harold Christopher Burger: Bitcoin's natural long-term power corridor of growth
Another live chart that attempts to develop a Bitcoin price prediction is the Stock to flow indicator. It uses a different approach by looking at the supply of Bitcoin over time and using regression analysis to forecast future Bitcoin prices.
Ratio of bitcoins in circulation relative to the amount of bitcoins annually mined, and this ratio's relationship with price
Market sentiment tool gauging investor fear and greed over time.
Long timeframe investor tool to identify under/oversold price periods
Any information on this site is not to be considered as financial advice. Please review the Disclaimer section for more information.
