Tracking the 2014 Bitcoin Bubble - First DoublingI am tracking the number of days it takes the bitcoin price to double. This is a proven indicator for determining when a bubble is peaking. There is academic research that quantifies the super-exponential growth during an asset price bubble, but the math is much simpler when counting days-to-double. Historically, the bitcoin price peaks when prices are on a pace to double in about a week.
The first doubling leading up to the next bubble took 51 days, which is the difference between $340 on April 10 and $680 on May 31.
I will be watching for . . .
Second doubling - $1360 (perhaps July)
Third doubling - $2720 (perhaps July)
Fourth doubling - $5440 (I think the late July peak will be near this value)
Fifth doubling - $10880 (probably will not happen unless the peak is in the fall)
The academic research is
Fearless versus fearful speculative financial bubbles D Sornette, JV Andersen - International Journal of Modern Physics
, 2002
A significant quote from the highly cited paper . . .
The feature that distinguishes it [the model] from ordinary bubble models is that the solutions may be at some times growing super-exponentially, i.e., with a growth rate growing itself with time. This is fundamentally different from previous bubble models based on exponential growth (with constant average growth rate). This suggests to qualify bubbles by testing for the existence of nonlinear super-exponential growth.