Bitcoin has baffled many minds as an emerging asset class. The determination of the price of Bitcoin [BTC] doesn’t actually end with the supply and demand curve. Price discovery of BTC has been one of the most challenging issues due to round the clock trading, global presence, lack of complete trading data apart from ledger transactions, and it’s emerging nature.
Analysts have applied a variety of techniques to find a chart or analysis that explains everything; a unified theory on Bitcoin price, as one could say. The Bitcoin On-Chain transaction volume and NVT analysis are credible unorthodox approaches that have more often than not described the true nature of things.
Another Regression model on logarithmic graph attempted by Renato Shirkashi seems to be holding since the beginning as well, the non-linear regression model. The graph is plotted on a logarithmic scale w.r.t. time. As Bitcoin is a growing asset with the network effect, it seems to explain the price characteristics better.
Moreover, the chart held true during the bear market of 2014-2015. It also correctly predicted the bottom in time during this bear cycle.
What happens when we extend the graph?
The model suggests that the bottom for Bitcoin [BTC] might actually be in, as it seems unlikely the price would go below the orange line. Theoretically, a break around $4500-$5500 range is the worst possible situation. The lowest bottom level by the end of 2019 is around $6000. Furthermore, from the reference of peaks or resistance, during the year a bottom below $4600 seems highly unlikely.
Also Read: Bitcoin [BTC] Bulls and Bears Both Capitulate Due to High Volatility
Since this bear market was shortened by a lot in time, an accumulation between the mean and lower orange line can be expected.
The graph is plotted on a logarithmic chart, hence the room to the upside is even bigger in the short term. If Bitcoin prices move along the regression model mean or above it, $10000 can be achieved during this year.
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Author: Nivesh Rustgi