Quote from: rpietila on July 11, 2014, 09:39:45 AM

I just updated my personal sheet tracking these things. The parameters of that one:
- flat price 0.005 assumed until Mt.Gox opens
- for 7/2010-2012, Mt.Gox prices used
- for 2013, three exchanges
- for 2014, Bitstamp only
- daily VWAP
- first day 2009-1-3, the first day of Bitcoin; last day 2014-7-9, the 2014th day of Bitcoin

The exponential trendline for this time:
USD/BTC = exp(-2.869800 + 0.003012 * D), D being the number of days

R^2 = 0.934183

The trendline is at $1583.

At $623, we are currently -0.405 units below the trend.

For comparison, the max we ever went below the trend prior to the first 2013 runup, was -0.573.
Prior to the second 2013 runup, -0.341.

The maximum downside (greatest drop in price experienced ever after) after a day when price has already been at a low of -0.4 or lower, is -19%, experienced in 2012-10-5 to 2012-10-26, when the price dropped from $12.75 to $10.31.

This is comparable to the price going from $623 to $504 this month. This would put us on par with the maximum historical downside from already such a low point as $623 represents in the trendline.

I will not go to the upside calculations now, just leave the closing remark:

TL;DR: Historically, buying at a price such as this has represented a very low risk entry point with very limited downside in dollar terms.

Historically, selling at a price such as this (for any other purpose than covering immediate needs) has been counterproductive, as it is very likely that you will get a better or at least not much worse a deal; 1, 2, 3, 6, or any number of months in the future.

In the above trend-line formula, can you please describe D (the number of days)? Is it a constant? How this number is calculated?

Cheers!