Bitcoin has a strong tendency to show up in world events, as a catalyst for change. Today’s headlines include rumors of a “hard fork” (i.e. a split into two competing versions) in the Bitcoin community, a record price of Bitcoin, and a new company as ambitious as a country being launched by a revolutionary group of entrepreneurs. And, as if that wasn’t enough, a visualization of the future of Bitcoin has been created.
The Bitcoin price in USD reached an all-time high at the end of 2017, and has remained fairly stable since reaching $20,000 in December. But is this a sustainable trend, or is it just a nice but temporary blip on the Bitcoin chart? How much further can Bitcoin rise?
The Power-Law Corridor Model, created by Michael J. Casey and Paul W. E. Dales, is a graphical representation of Bitcoin’s price history that shows the market’s price cycles over time.. Read more about bitcoin price prediction 2025 and let us know what you think.There are a number of tools, charts and models that traders use to predict bitcoin price cycles, and in our last article we discussed using the Gold Ratio multiplier. The following editorial discusses another method of bitcoin price prediction analysis using logarithmic growth curves. In September 2019, a full article was published by Harold Christopher Burger describing how cryptocurrency advocates can visualize bitcoin’s price cycles using the Power Law Corridor model.
Logarithmic curve of bitcoin growth
To give our readers a deeper perspective, Bitcoin.com News talks about several useful pricing models that technical analysts and crypto traders use to predict future bitcoin prices. In a previous report, we discussed the Golden Ratio as a multiplier and how bitcoin players can use the Golden Ratio and the famous Fibonacci sequence to predict future values. In the next post, we’ll look at how cryptocurrency enthusiasts can use logarithmic growth curves to gain perspective on Bitcoin (BTC) price cycles. Essentially, logarithmic growth is the opposite of exponential growth, and is much slower than fast, aggressive growth. Logarithmic growth is used in biology and various sciences, but exponential and logarithmic functions can also be used in finance. The price chart of bitcoin can be viewed from a logarithmic perspective. In fact, the logarithmic price chart is one of the most popular charts in the world of technical analysis of cryptocurrency and traditional finance. Simply put, a logarithmic graph of a crypto asset uses regular interest rates, and all intervals are equal in scale. Even on the simplest logarithmic BTC charts, a person can get a very different picture than a typical cryptocurrency price chart that uses different candlesticks and time frames. Additionally, Bitcoin traders can look at the logarithmic growth curve model of crypto assets for even more perspective. This particular logarithmic growth curve (LGC) price model, published on lookintobitcoin.com, was created by Cole Garner and @quantadelic. Moreover, the pricing model is also inspired by the work of Harold Christopher Burger, according to the website. Harold Christopher Burger has published a comprehensive study of the LGC in his paper The Natural Long-Term Growth Corridor of Bitcoin by Power Law. When Burger wrote the article in 2019, he mentioned a number of people like John McAfee ($1M) and Nouriel Roubini ($0) predicting unaffordable prices. In his editorial, Burger looks at the entire history of the price of bitcoin (BTC) from a logarithmic perspective. In essence, Burger describes possible future pricing models for BTC using the Power Law Corridor (PLC) model. Mr. Burger then stated that he was confident that in the long run the price would indeed develop in the way suggested in his article. His study shows that bitcoin follows a price corridor that can be divided into two ranges. One belongs to the low price range of the forecast and is quite thin, while the other is much larger and belongs to the high price range of the forecast, the analyst said in a note. The price of bitcoin spends about the same amount of time in both areas. This implies that large bubbles and recessions are likely to persist. The researcher, who blogs for Quantodian Publications, explains that the pricing model helps people identify entry and exit points. This model allows us to make general predictions about the future long-term price of bitcoin, the blog notes, referring to two predictions.
- The price will reach $100,000 per bitcoin no sooner than 2021 and no later than 2028. After 2028, the price will never drop below $100,000.
- The price will reach $1,000,000 per bitcoin no sooner than 2028 and no later than 2037. After 2037, the price will never drop below $1,000.
Constant movement Normal and rising
Through mathematical calculations, equations, and linear regression, Burger discovered that the basic level of support for the BTC price is a power law. He ran a linear regression with the bitcoin price peaks in 2011, 2013 and 2017. Market tops also seem to follow the law of power, according to Burger. If the next market top also follows this power pattern, the market top will be on this line. The slope of this power law is 5.02927337, while fitting to the full data set yielded a slightly higher slope of 5.84509376. This indicates a relative softening of the bitcoin bull market relative to the overall trendline, the author adds. When Burger quantified these dimensions, defined by the three peaks in the bitcoin market price and the coefficient of determination, the researcher arrived at two power laws. He also used random sampling consensus, or RANSAC, to get more data points. The researcher then discovered two modes, one normal and one bullish, and was able to formulate several power law models for the BTC price. Burger shows a diagram that includes the Power-Law fit, the Power-Law fit minus the offset, the Power-Law fit at only three vertices, and the robust fit. We now have several models to predict the future price of bitcoin. We just need to expand the schedule, says Burger’s blog. The researcher adds: We can then divide this corridor into two bands, one corresponding to normal mode and the other to bullish mode. So far, price has spent half the time in the lower band of normal mode and the rest of the time in the upper band of bullish mode.
Black Thursday and the current state of affairs
Burger’s blog post on the Power Growth Corridor Law has been tracking the price of bitcoin pretty well since its publication. However, the author of Quantodian Publications notes that when he modeled the bitcoin price support line using the power law, there was one instance in 2010 where the BTC price fell below that line. Since the publication of this blog post on the 4th. September 2019 saw a second instance where the price of bitcoin crossed the safe compliance line. This particular moment was during the financial crash of the 12th. March 2020, also known as Black Thursday, when the value of BTC and almost every asset in the world collapsed. The 12. March was considered an unusual event and perhaps an aberration because of the fear and shock that Covid-19 caused in the financial markets. In conclusion, the current chart shows that bitcoin has been going through a bullish cycle lately, but has not peaked like other bullish cycles. In fact, the chart shows that the northern price peak reached a much lower plateau than the other peaks, and the price began to move south. What do you think about logarithmic graphs, power laws, and the use of logarithmic growth curves to predict bitcoin price cycles? Let us know what you think in the comments below.
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Bitcoin, bitcoin price, BTC, BTC charts, BTC price, coefficient of determination, growth, Harold Christopher Burger, linear regression, logarithmic, logarithmic growth curve, power-law, power-law corridor, Quantodian Publications, RANSAC Photo credit: Shutterstock, Pixabay, Wiki Commons Denial: This article is for information only. It is not a direct offer or invitation to buy or sell, nor is it a recommendation or endorsement of any goods, services or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author shall be liable, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services referred to in this article.The visualization below depicts long-term Bitcoin price cycles in the form of a power-law corridor, showing how Bitcoin’s price moves in three distinct phases: early adopters, growth and maturity, and late adopters. The corridor has two distinct features: it consists of a series of minor waves, and it passes through the midpoint of the corridor, where price reaches its highest point. The price cycle is marked by the occurrence of both a major and a minor peak, and the major peak is situated at the midpoint of the corridor.. Read more about bitcoin price prediction october 2020 and let us know what you think.
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