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Rainbows, Log Charts, and S2F: Bitcoin’s 2022 Bear Market Has Broken the Community’s Most Popular Price Models

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The 2022 bear market was brutal as more than $2 trillion was thrown out of the crypto economy. In addition to losing record highs, the crypto winter managed to break a number of popular bitcoin price patterns such as the rainbow price chart and the infamous Plan B stock-to-flow pattern. violated and deviated below the lower band for about 86 days.

Abnormality: The 2022 Bitcoin Bear Market Breaks Some of the Most Popular Price Patterns

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For many years, crypto traders have been using tools, charts, and models to predict the future value of bitcoins (BTC) and other popular digital assets. The Bitcoin.com news has covered the Plan B stock-to-flow (S2F) price model multiple times, and in 2021 the S2F model was pretty accurate up until the end of November.

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In addition, many bitcoiners rely on other charts and price models such as the golden ratio, Fibonacci sequence, rainbow pattern, and logarithmic growth curves. During the last quarter of 2021, Bitcoin traders expected BTC to reach 100 thousand dollars per coin by the end of the year.

Rainbows, logarithms and S2F: Bitcoin bear market in 2022 broke the community's most popular price patterns
BTCWeekly /USD chart on bitcoinwisdom.io on August 5, 2022.
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In September 2021 when BTC traded for prices ranging from $45K to $50K, Blockware Solutions Lead Analyst Will Clemente tweeted about the new pricing model, which he called “illiquid supply levels.” At the time, Clemente said that the model combined Glassnode’s illiquid supply data with the S2F Plan B model and stated that it creates a Bitcoin price floor based on BTCdeficit in real time.

The minimum price Clemente predicted was $39,000, and over time, the analyst’s illiquid supply model broke down. Even after Plan B’s “worst-case” S2F forecast deviated in late November, the pseudonymous analyst said he was confident that the price of bitcoin was still “on track to $100,000.”

None of these bold predictions came true, and at the start of the cryptocurrency bear market, such price patterns openly mocked and is condemned by many people in the crypto community. The illiquid supply level was not sustainable, S2F broke and people ridiculed the popular Price indicator “Rainbow”.

A popular power law corridor model showed an 86-day deviation from the norm

In addition, one of the most popular bitcoin price patterns, known as the Power Corridor or Logarithmic Growth Curve pattern, has also been broken since May 11, 2022. BTCprice chart can be seen from logarithmic perspective. Actually, log price chart is one of the world’s most popular crypto and traditional financial technical analysis.

Charts of the logarithmic growth curves of bitcoins are hosted on crypto web portals such as lookintobitcoin.com as well as coinglass.com. The current deviation is unusual because BTCuntil 2022, the price fell below the lower band only twice. The first deviation occurred quickly in October 2010 and the second most notable deviation occurred on March 11, 2020.

Rainbows, logarithms and S2F: Bitcoin bear market in 2022 broke the community's most popular price patterns
Graph of the logarithmic growth curves of bitcoin on August 5, 2022.

March 11, 2020, also known as Black Thursday, was an interesting day for every asset on planet earth as financial markets shuddered across the board. While, BTC broke below the $4,000 range and the move moved below the lower development line on the log growth curve chart.

This particular case did not last long as global markets recovered from the initial panic caused by Covid-19 and a bull market began almost immediately thereafter. The price of bitcoin soared to $64K in April 2021 and above that range to $69K on November 10, 2021.

Nine months later bitcoin (BTC) the price fell 66% below the all-time high of $69K, and the popular and often reliable logarithmic growth curve model has been down for 86 consecutive days. Bye BTC the first bear market rally was observed, the price still has a way to go to return to the lower band of the power-law corridor.

In order for the price to do this now, the price would have to be just above the $35k range. The price of bitcoin has never fallen below the bottom line of the band for so long, and this is unusual when looking at BTC13 years of price cycles. The breakthrough shows that markets often follow certain mathematical laws, patterns, and patterns, but these types of technical methods don’t always ring true.

Currently, the latest bear market rally and other factors indicate that it is entirely possible that the bottom of this particular crypto winter will be reached, but since charts and signals like these have broken in the past, this means that no one can really guarantee the bottom of the cryptocurrency market. in.

What do you think of all the Bitcoin pricing models that have broken in the past? Let us know your thoughts on this in the comments section below.

Denial of responsibilityA: This article is for informational purposes only. It is not a direct offer or solicitation to buy or sell, nor is it a recommendation or endorsement of any products, services or companies. Bitcoin.com does not provide investment, tax, legal or accounting advice. Neither the company nor the author is directly or indirectly liable for any damage or loss caused or alleged to be caused by the use of or reliance on any content, goods or services mentioned in this article.





Credit : news.bitcoin.com

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