I’ve always been interested in the Forex market, particularly mathematical formulas to predict the movement of the market, however, in Forex it’s very difficult to do as there is not a consistent money supply.
So for example, with Sterling (GBP), there have been times when the Bank of England have introduced quantitative easing. Now QE, as it’s called, plummets a currencies value. Simply because you are printing more currency. Almost all fiat currencies are not backed by anything except a promise to pay.
I have been working on a mathematical formula using the magic number of 61.8 (or 62). More Bitcoin is created every day by mathematical formulae, this is a controlled expansion of the currency. Meanwhile, the demand for the cryptocurrency increases. So this means to me there is, in fact, a baseline that the currency sits at. Fluctuations around that line are simply the result of supply and demand.
Today, I think I have finally solved it.
The chart shown is from Tradingview and I’ve written the indicator using the PINE language. You can see that at it’s “direst” moment the currency returns pretty much to the red line of the indicator, this is acting as a mathematical support.
Every currency has an ideal price, and I would suggest that the line I have drawn is pretty much the ideal price of Bitcoin.
Only time will tell if this chart is correct, however, if it is, that means that the currency hit it’s baseline and now can only really move in an upward direction – all be it slowly.
The reason of course that the currency’s price will increase in value over time at that rate is that the mined new Bitcoin is actually owned by the miner or the mining pool. It doesn’t just “appear” in the blockchain not belonging to anyone, thus creating a “demand” that matches the growth of the coin.
This is all theoretical and invest at your own risk, but I think this could be the path of the coin in the future.
A great post! I’m a believer also that Bitcoin will continue to rise over the longer term. There will be many challenges along the way and the value will be dictated by the final response from national bodies. If crypto becomes widely accepted, then the value will be massive as it’s a borderless tech. If, however, Governments decide to make life hard then it will be more of a niche currency – they will be unable to ban it due to its p2p nature but they can stifle wide spread adoption. A slow rise, punctuated by volatility, is what I see. By the way your new website design is looking good! Regards Crypto Coin Dude
Thanks Crypto Coin Dude it’s great to have the encouragement!