New Bitcoin Pricing Model - Bitcoin Z-Signal


#1

Hey everyone,
I just wanted to drop a link here to my latest Bitcoin pricing model called the Bitcoin Z-Signal. The idea is to give you a tool that you can use to know when to enter or exit from the Bitcoin market, in order to maximize your investment.

The way the Bitcoin Z-Signal works, is by taking in raw data from the Bitcoin blockchain and simply comparing it to the price. The only transformation I do is taking the log scale values of each. Why? Because Bitcoin is a log scale phenomenon, just like the emergence of the internet!

You can see the full article here:

Normally Seeking Alpha has a paywall, but I’ve turned it off for this article. So, you should be able to read it without any issues. If you can’t see the article, just post here and I’ll look into it.

The most important chart is below.

As you can see, there have been many bubbles in the past. We are just now coming out of the great 2017 bubble. I have a sneaking suspicion that there will be more bubbles in the future. If we can spot them and time them, then we’re one up on the game.

Any feedback or questions are welcome. Thanks all.

Cheers,
Hans


Bitcoin Price Thread
#2

Please keep on the forum. I will listen to your interview, time now.


#3

It was well worth time to watch your DC TV interview. I put a like a comment in there.
I don’t have a Twitter account, but if I can get good useful data to invest with I would start one to follow you.


#4

I’ve updated the data behind the Bitcoin Z-Signal to include daily values from the last year. From 2010 to 2017, the data is taken in 48 hour samples, from November 25th, 2017 and going forward, the data will be updated daily.

Here’s the latest:


#5

Hey, awesome work :+1:

So in a nutshell, in what values this z-signal tells us it is the right time to buy/sell?


#6

Historically, buying under Zero has been ideal (a price of $0 is equal to a Z-score of -1). The last bubble peaked out around Z-score 2.4, and the lowest reading was about -0.8 taken in early 2015 ($240). We don’t know how low we will get in this bubble, or how high the next one would be, so I recommend dollar cost averaging either way. For example, maybe we bottom out at -0.5, and then the next bubble goes to 2? I’m just guessing here, we don’t know until it happens.


#7

very interesting :+1: i’ll follow your updates in twitter


#8

Err… wow… I made an error on my spreadsheet. When I added the daily data from the last year, one of the inputs fell below the threshold for P-Value. I’m recalculating the values now, excluding the input from the hash power.

Please be advised that this metric is new and I’m still working out the kinks… bear with me.


#9

You are doing great work and have our attention. Looking forward to seeing the values manifest…


#10

Thank you. I’m working on moving this thing from a spreadsheet into a program that runs automatically; in this process I’m double checking everything… and I’m glad I did.


#11

Ok, the bug is fixed! Here’s the chart for today, with the long view and the last 24 months!


#12

The Bitcoin Z-Signal for November 26th, 2018 is out!


#13

Thanks Hans. I was hoping to see what your score is for the day.

Can I ask, since the score is below zero this means good time to buy, how long is this window, Do I now use my other indicators like RSI and to know when to buy? Can you offer some advise


#14

Hi @Cryptonio,
The truth is we don’t know how low the price will go. I have offered the figures from the last two major bubbles for a point of reference; but this time it could be different.

In the long term, if you can simply avoid buying in a bubble you will do well eventually (unless Bitcoin totally dies, which is possible).

I wish I could give you an exact answer, but in reality nobody knows what is going to happen. My hope is that I can help people spot bubbles, and even learn to profit from them instead of losing money. For example, nobody wants to touch Bitcoin now, but everyone wanted to buy at $20k. Isn’t that ironic?


#15

The Bitcoin Z-Signal for November 27th, 2018 is out!


#16

Bitcoin Z-Signal for 11-28-2018.

Cheers,
Hans


#17

Hi Hans:

Do you have an update on the Z-score?

Thanks…


#18

Yes sir!


#19

Moving forward, I will post updates to the Bitcoin Z-Signal in this thread to reduce clutter on the forums. I’m including the Z-Complex chart as well.

The Bitcoin Z-Signal for December 6th, 2018.

2011 Low: -0.36 => 2013 High: 1.53
2015 Low: -0.41 => 2017 High: 1.21
Current: -0.11


#20

Well, are we having fun yet? The market movements have sure been dynamic. Here’s the latest Z-Signal. Please note the first comment as well.