Re: Wall Observer BTC/USD - Bitcoin price movement tracking & discussion
The problem with your log-linear model isn't that it's not updated regularly. I know you do that.
The problem is the *extreme* laggyness of the model, and how you intend to use it. By the time your regression picks up the fact that we are in a huge bear market*, it is already much too late.
The log-linear trend can maybe, if you insist, be used to get an idea of the order of magnitude of the expected price, assuming nothing about the growth function up to now has fundamentally changed. And even then you should remind people that it is no guarantee either, just a reasonably motivated model.
The problem is the *extreme* laggyness of the model, and how you intend to use it. By the time your regression picks up the fact that we are in a huge bear market*, it is already much too late.
The log-linear trend can maybe, if you insist, be used to get an idea of the order of magnitude of the expected price, assuming nothing about the growth function up to now has fundamentally changed. And even then you should remind people that it is no guarantee either, just a reasonably motivated model.
I agree. Is there a point of controversy?
Yes. Your presentation of it.
"Buy now, because we are (almost) guaranteed to turn around anytime now, based on the log trend."
That's the essence of your sales talk, and it is doing a disservice to Bitcoin.
"Buy now, it has historically proven to be a good approximate spot, but be prepared to see your USD value go down further in case the bear market continues."
That'd be an honest presentation of the historic results, but one that I have yet to see in this form.
In case you accuse me of putting words in your mouth, here's the type of presentation I have in mind:
- Trendline comparison: we are now at -0.322 log units. The trendline is at $966 and rising $7 per day, conclusion: rock bottom (of all of the time between the 4/2013 and 11/2013 peaks, only 2% (5 days) was spent this low)
There is no such thing as "rock bottom" of the trendline. If the market continues to go down south, your model will pick that up long after the fact.
For fairness sake, you do add disclaimers when pressed (like: "don't invest what you can't afford to lose"), but you are still regularly abusing your model in discussions about short-to-mid term predictions (e.g. was this the bottom or not?), where this model has no place whatsoever.
When I pay a professional financial advisor I expect disclaimers. When I read what some guy has posted on a forum I insert my own.
