Quote from: znaky on April 01, 2014, 08:03:03 PM

Quote from: rpietila on April 01, 2014, 11:06:18 AM

The beauty of the 5.25-year trendline with exponential fit (R^2=0.93 which is pretty darn good) is that it takes into account every worry of every person who has ever owned or not owned bitcoins. I put more weight on that than the individual worries of a single person.

The trendline is a representation of how people have speculated in the history of Bitcoin. As Anonymint points out we have a large merchant adoption that we haven't had the last 5.25 years. Do you think new factors with a possible large impact like this can make the trendline less accurate?

I do not see a large merchant adoption making the trendline any less accurate, it is simply an indication of the growth of Bitcoin. Furthermore I the find idea that large scale adoption by merchants is bearish for Bitcoin rather bizarre and more an indicator, that we are currently very close to a significant low in the BTC/USD price. Maybe the bears are starting to get a bit on the piggish side here?

As for the trendline it does have some significant limitations:
1) The exponential model makes sense when applied to the market capitalization not the price. The impact of this approximation is to underestimate the price. When applied to 2009 this approximation completely breaks down
2) The data before July 2010 is highly questionable. It also does not include the data from January - June 2010 from http://newlibertystandard.wikifoundry.com/page/Exchange+Rate. This data, unlike the data from 2009 from the same source, is actual trading data in terms of gold (1 gram XAU via Pecunix) from BitcoinMarket and NewLibertyStandard. I do agree with the premise that for a large part of 2009 the USD/BTC rate could have been constant. This is due to the growth in the Bitcoin money supply being approximately equal to the growth in the use of Bitcoin during 2009.

My thoughts on this is that because of the above the trendline errs on the side of being overly bearish. It for this reason that I was aggressively buying in August / September and into October 2013 (where I was proven right) and held rather than sell in December 2013 - March 2014 (where I was proven for the most part wrong). As for the current situation I see a hold and / or long term buy.