On August the 23rd of 2013, the so-called “Mystery Chart” thread was opened on BitcoinTalk. It shows a log scale of the Bitcoin price in USD on Gox, plus an unusual indicator. This indicator seems to plot a shallow sine wave, a moving average, an oscillator and… some frequencies? I really have no idea what that thing is, perhaps a Hilbert Sine Wave indicator with some mods, but it’s certainly interesting… Especially as it did a great job of calling the recent double top! The thread title said to sell in ~115 days, just 11 days past the collapse of the double top formation.
The thread’s author, bb113, describes his work as follows:
The top chart is price up to the date of the post in log scale. It is only mt gox. The second is the mystery indicator which looks like it cycles with different periods, the strongest of which is 230.4 days. That is where the 115 day prediction came from. When mystery indicator is high it has been a good time to buy (in the past), when it was low it was good time to sell. The red and green lines are dates when the mystery indicator had “peaks”, the value from the peaks is also shown below as the boxplots and density plot.
This talk of cycles got me interested. Instead of trying to figure out the indicator, I went and plotted the duration of Bitcoin price peak to price peak. Sure enough, these work out (from April 2013) to about 230 days. These periods are shown in green on the below chart. Next, I plotted sideways or downwards periods in red, and strong upwards pushes in blue. Intriguingly, these periods also turn out to be fairly regular. Apart from the very first instance, the red intervals cover sideways / downwards movements over about 150 days. Finally I plotted the upward surges in blue, noting these have the highest percentage range, spanning between 60 and 88 days.
This seems to portray a definite cyclical element to the Bitcoin price. Although imprecise, if the pattern holds it may give indications to major turning points in the Bitcoin price for the year of 2014. In an update to his thread on the 23rd of December 2013, bb113 posted an updated Bitcoin price chart along with the comment:
Here is an updated chart. It looks like the indicator did have a lower peak a few weeks ago. So that means it recommends to hodl steady (buy stuff with btc then replenish) for another ~100 days then start buying and sell in ~220 days. I have no idea why this cycle would exist and I would expect it to end now that this thread has gotten attention.
In other words, he says the next ramp will occur around the start of April 2014 and put in its top around the start of August.
Now, I don’t know about lower peaks on his mysterious indicator, but projecting the cyclical pattern forwards in time, I get this chart:
Going by this, the magic blocks say to buy early in April and sell out mid-July – pretty close to bb113’s results.
Although it seems bb113 is no longer giving out 0.1 BTC rewards to those who can guess his indicator, I think I’ve gotten close to at least the cycles he mentions.
Using a log chart makes the Bitcoin price peaks clear across the rise in Bitcoin’s value from cents to over a thousand Bernanke-bux. That bull runs have begun 150 days into each peak to peak cycle is also very interesting and suggestive of… I have no idea what!
If you’d like to check out interactive versions of my cyclical and other charts, they can be found on my TradingView profile. Pressing the “play” button will add any new daily bars.
Right now, the above patterns are my best guess at what 2014 holds for the Bitcoin price. Unfortunately I can’t (yet) give you an in-depth explanation for the patterns I’ve noticed (thanks to bb113 and with help from a Russian charist on TradingView) and of course I can’t guarantee the Bitcoin price will perform accordingly. Still, I hope you find them helpful or at least interesting. Please feel free to investigate this “phenomenon” further and get back to me, either here or on Trading View, with any further ideas or observations.
Best of luck with all your trades in 2014!
Last modified: May 20, 2020 5:16 PM UTC