Spiral Out – Using the Golden Ratio and Fibonacci Sequence to Predict Bitcoin Price Cycles – Bitcoin News
The value of the leading crypto asset Bitcoin has fallen more than 53% from its all-time high of over $ 64,000, to a low of $ 30,000 on May 19. While Bitcoin is still down 25% in the past 30 days, it’s hard to predict where Bitcoin’s value will go from here. Although a number of people use indicators like the golden ratio multiplier, the Fibonacci sequence, logarithmic growth curves, and tools like the infamous stock-to-flow pricing model (S2F) to predict future Bitcoin valuations.
Predicting the booms and busts of Bitcoin with the number Phi
Most people cannot predict the future and when it comes to Bitcoin (BTC) and the crypto-economy, busts and booms are generally common. In addition, bankruptcies and booms are often unpredictable except in some cases like certain news that shakes investors. However, there is an abundance of technical analysis tools, charts, and models out there to help a large number of people stay one step ahead of the game.
For example, fans of technical analysis use the golden ratio and Fibonacci sequence perspective to predict future Bitcoin valuations. In essence, a trader will be applying math to things like the value of Bitcoin and the moving averages. The golden ratio is also known as the divine ratio, divine ratio, number phi, extreme and medium ratio and golden number. Essentially, in the “science of quantity” two quantities reach a mathematical divine section if their ratio is equal to the ratio of their sum to the larger of the two quantities.
The golden ratio is equal to 1.618 and is used not only in mathematics, but also occurs in architecture, geometry, and many natural elements. Then there is the classic example of mathematics called the Fibonacci sequence, a sequence of quantities where a number is the addition of the last two quantities, starting with 0 and 1. The Golden Ratio Multiplier hosted on lookintobitcoin.com is there a detailed description of how the multiplier works with the leading crypto asset Bitcoin (BTC).
“Bitcoin adoption curve and market cycles to understand how price may behave over medium to long-term time frames,” notes the website. “This is done using multiples of the 350-day moving average (350DMA) of Bitcoin price to identify areas of potential resistance to price movement.” Lookintobitcoin.com adds:
Multiples are the value of the 350DMA, not the number of days. The multiples refer to the golden ratio (1.6) and the Fibonacci sequence (0, 1, 1, 2, 3, 5, 8, 13, 21). These are important math numbers. These specific multiplications of the 350DMA have been very effective over time in identifying intra-cycle highs for Bitcoin price as well as key market cycle highs.
The Golden Ratio Multiplier as applied to Bitcoin price predictions was conjured up by Philip Swift when he published an article on the subject on June 17, 2019. The article, entitled, “The Golden Ratio Multiplier: Unlocking the Mathematically Organic Nature of Bitcoin Adoption,” helps a trader get a better view of multi-year cycles.
A 2019 Golden Ratio Multiplier chart shared by Philip Swift on Twitter.
“The article begins by noting how the 350-day moving average has acted as the axis for Bitcoin’s major market cycles – as soon as we break out, a new BTC bull run begins,” Swift tweeted two years ago. Swift went on by saying:
The new insight begins when this important moving average is multiplied by key numbers: the golden ratio (1,618) and numbers in the Fibonacci sequence (1,2,3,5,8,13,21). In doing so, we are able to single out almost all of the major intra-cycle price highs in the history of Bitcoin (colored lines) AND every market cycle high (dotted lines). See the 2015-17 bull run as a clear example of the MA multipliers acting as great resistance at the highs within the cycle.
Bitcoin’s sequence of numbers such as Fibonacci poetry and Nautilus shells
Of course, not everyone agrees to use the golden ratio and the Fibonacci sequence to predict Bitcoin busts and booms. For example, Alvaro Fernández of the open insurance platform Nsure Network noted, “Historically it seemed to be respected, but how much could it be trusted? We might as well pass the first accumulation high. ”Other critics believe that using the golden ratio and the Fibonacci sequence is no different from using tarot cards.
Despite the skeptics, Swift’s bitcoin tool, the Golden Ratio Multiplier, is highly respected and used by a wide variety of technical analysts. The golden ratio has been used since the time of the ancient Greeks and many believe that it is deeply connected to the universe and nature. Similar to the golden ratio, Satoshi Nakamoto’s invention is a well-known and irrational technology. Interestingly, Bitcoin’s epic price surge since its first trade has closely followed the patterns of the number-phi and fibonacci sequence.
Just like the golden ratio multiplier, the leading asset followed succinctly with a “natural long-term power law growth corridor,” according to Harold Christopher Burger. Burger has published a comprehensive article discussing the logarithmic growth curves of Bitcoin. Like Swift’s Golden Ratio Multiplier, logarithmic growth curves can give a trader an idea of when to expect busts and booms and specific time frames. But these tools have allegedly been exposed on occasion, and the golden ratio is often viewed as a fairy tale.
Similar to the Nautilus shell, the price of Bitcoin has often been associated with the golden mean and the Fibonacci sequence. The Nautilus bowl is often compared and associated with the golden ratio, but contrary research and reflection suggests that the famous bowl is not a good example of the naturally occurring logarithmic spiral of the golden ratio. Studies show that the Nautilus shell has phi proportions but follows a 4: 3 ratio.
What do you think of using the golden ratio and the Fibonacci sequence to predict future bitcoin prices? Let us know what you think on this matter in the comments below.
Tags in this story
Alvaro Fernández, Bitcoin Math, Charts, Divine Section, Fibonacci Sequence, Golden Ratio, Golden Ratio Multiplier, Harold Christopher Burger, Logarithmic Growth Curves, Math, Models, Multi-Year Cycles, Number Phi, Philip Swift, Science of Quantity, Tools
Photo credit: Shutterstock, Pixabay, Wiki Commons, lookintobitcoin.com,
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