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Metcalfeslaw

BITCOIN to DROP to ~ $12500 in ~ 1-2 YEAR. Network Adoption...I know everyone will say this is an outlandish call but I am making it anyway. I FULLY Expected $BTC to bounce at the most recent TL support around $38,400-$40k just as everyone else did. But the signs were there and I wish I saw them earlier that $BTC has Topped for 2022 and will likely not see a bottom until 12-18 months from now. I expect the low to be around $12500 for this Target Price. WHY?? Glad you asked. When $BTC broke from its major TL support, Horizontal support and below the Weekly EMA 39 I had to reevaluate my Bullishness on $BTC. Now I am LONGTERM Bullish $BTC but have become intermediate term Bearish. BTC has been following closely the Metcalf's law of Network Adoption that is available everywhere online. I am a firm believer that $BTC and crypto in general is the "Internet of Finance and Banking". So why are we comparing $BTC to $BTC prior 4 year cycles??. Why is everyone comparing $BTC to Stock to Flow model and halving events?? Shouldn't we be comparing it to well established Internet stocks that followed Metcalf's Law like,....AMZN?? Yes you say....well lets look closely at AMZN when it was first trading with a market cap of ~ $6 Billion around the Dot Com Bubble. Everyone was into tech. There were thousands of "dot com" companies some of which survived but most that did not. Sounds a lot like Crypto. We have mainstream media talking about crypto but they are not really sure how it fits in to the real world. Some accept it and others think its ridiculous. The same in the dot com era. Look at the following charts of BTC and AMZN. Notice any similarities?? BOTH had a long basing structure with a small pop in price toward end of the summer prior to any POP in price. BTC Price pop was probably somewhat effected by the Pandemic. Notice there are basically 3 UPTHRUSTS. They look slightly different but they also look alot alike. See charts for the details on the similarities . The peaks of the 1st UPTHRUST were obviously different in AMZN compared to BTC but otherwise the timing and chart pattern is almost identical. Even the slope of the TL (Yellow Lines) and timing of all the Peaks is eerily similar. What was going on at that time with the Fed?? You guessed it RATE HIKES!! Three to be exact! But the overall Nasdaq continued to tread higher topping out between March-April 2000 while AMZN started to top out January 2000. People said it had no merit and expected it to die many times. After all AMZN didn't make any money (sound Familiar Peter Schiff?...). AMZN Topped and fell for about 20 months before reaching its "Basing Structure" overhead resistance around $5. That base became the floor. If we assume that BTC is trading 24/7 unlike AMZN we can reasonably assume the bottom will happen slightly quicker like maybe 14-18 months. The "Basing Structure" prior to BTC POP in price in 2020 had overhead resistance around $12500. AMZN Floated around $5-$14 for most all of 2001 in another "Basing Structure" of sideways chop. Will history CONTINUE to Repeat??? Tell me what you think and comment below. Trade what you see... AMAZON Chart for Comparison
BITSTAMP:BTCUSDShort
by eganon69
2
Has Metcalfe's Law Stopped Working for Bitcoin?Metcalfe's Law has been successfully used to value a variety of network effect technologies and businesses, including Facebook and Tencent. Applying Metcalfe's Law to Bitcoin , using "Daily Active Addresses" (DAA) as the "n" value, yields interesting results. Historically, Bitcoin has tracked the Metcalfe Law Fair Price reasonably well. A number of studies have been performed over recent years which validate this and have used various derivations of Metcalfe’s Law. Note: this indicator sticks to the original Metcalf’s Law. Prior to 2018, every time Bitcoin was above the Metcalfe’s Law fair price (calculated using a default “A” of 0.5 here), a bubble had formed, and price quickly reverted back down to the mean. Nonetheless, since February 2018, Metcalfe's Law Fair Price has remained below the actual Bitcoin price, suggesting Bitcoin is currently overvalued. There may be a few reasons for this: 1. Possibility A: Bitcoin may still be extremely overvalued. Since the December 2017 peak, Bitcoin has only reverted to the Metcalfe’s Law Fair Price briefly during the December 2018 bottom. If this case is true, there could be further to fall unless DAA numbers pick up to fill the gap. 2. Possibility B: The introduction of side-chains, private transactions and the Lightning Network may have fundamentally altered the effectiveness of using DAA to value Bitcoin . As more daily transactions are completed off-chain, or on large platforms/exchanges which use fewer addresses, the relative number and growth of DAA may be misrepresented and artificially low. In this case, DAA as it is reported today is no longer useful in assessing the fair value of Bitcoin with Metcalfe’s Law and this Indicator is effectively useless. 3. Possibility C: Neither of the above are true. We are just in an anomalous period in which price and Metcalfe’s Law Fair Price have deviated from the mean for an extended period (and will meet again in the future, potentially at a higher price). 4. Possibility D: Metcalfe’s Law doesn’t really work for Bitcoin . I am inclined to believe Possibilities “C” and “D” are unlikely. Given the way Bitcoin infrastructure is being developed and used in 2019, Possibility “B” seems the most likely, as this case is supported by the fact that a number of other metrics indicate that Bitcoin is currently on the lower side of “fair value” (including Dynamic Range NVT Signal). If Possibility “B” is false, or the impact of private network address usage is negligible, the Bitcoin network may not in a healthy state, with DAA values basically flat for the last 3 years. Regardless, Possibility “A” remains a candidate. Only time will tell. It will be interesting to check back on this indicator in 12-24 months time. Hopefully this indicator has been proven redundant by then.
BNC:BLX
by capriole_charles
3