Post
Topic
Board Economics
Re: Monthly average USD/bitcoin price & trend
by
SlipperySlope
on 19/11/2013, 21:14:49 UTC
There is a very compelling argument right now that the recent price movement is driven by fundamentals because of China's recent en masse entry to the buyers market.

Fitting to a trendline has no relationship to these fundamentals, and if we are to believe that there is something technologically-transformative or revolutionary about Bitcoin, then the fundamentals are the dominant factor in driving long-term pricing. This is not pork bellies, barrels of oil, or frozen concentrated orange juice.

I understand bitcoin speculation fundamentals as per your example. Clearly the price is driven upwards at this point by exponentially increasing numbers of speculators. See my logistic model of speculator adoption of bitcoin - https://bitcointalk.org/index.php?topic=322058.msg3549092#msg3549092

And I distinguish the fundamentals of the underlying bitcoin economy as very well presented by http://coinometrics.com/bitcoin/btix .

Regression fitting and other sorts of technical analysis abstract out the underlying phenomena and simply model the behavior of informed and uninformed traders. Technical analysis is good at predicting bitcoin price bubbles and for giving us the best possible predictions about future bitcoin valuations.