Bitcoin Logarithmic Price Bands

14. Sept. 2021

Bitcoin has been trending up with time. Generally, Bitcoin has been following an increasing logarithmic path, as seen on the chart. This indicator tries to plot areas of buying or selling opportunity. The green area contains data from times when Bitcoin was extremely undervalued. The red area is calculated from times where Bitcoin was extremely overvalued. The logarithmic bands will increase with time, so the values are not static.

Generally speaking, buy when the price is in the green area and sell when the price is in the red area.

The model doesn’t contain ANY data from after November 2020. Nevertheless, it correctly predicted the area where Bitcoin topped in April 2021.

In addition, the yellow logarithmic band manages to indicate strong areas of support or resistance. So did it correctly indicate the top of the mid-cycle peak in 2013, the bottom after the first sell-off in Feb 2018, the 2019 top and at last the mid-cycle bear-market from May-June 2021.

This study will be updated once or twice per year to add new data to the calculation. This means that the logarithmic bands will look slightly different in the future compared to now. Nevertheless, the bands add valuable information on buying or selling opportunities in the market.

The indicator is only useable on the Bitcoin/Dollar index by Tradingview, weekly timeframe.

For access, please take a look at the "Author's Instructions" below.

18. Feb. 2023

Versionshinweise

- New BTC data has been added from before 2011. This caused the script not to work properly anymore.
- Bottom green bands have been optimized.
- Top red band now includes the 2021 top to calculate the future value.