Bitcoin Bear Market of 2022 Breached Community’s Most Popular Pricing Patterns – Bitcoin News Spotlight

The bear market of 2022 was brutal as over $ 2 trillion worth was wiped out by the crypto economy. In addition to the lost record values, the cryptocurrency winter has managed to break a number of popular bitcoin pricing models such as the rainbow price chart and the infamous Plan B stock-to-flow model. Also, since May 11, 2022 , the well-known power law corridor model or logarithmic growth curve graph also broke and deviated below the lower band for about 86 days.

A deviation from the norm: Bitcoin’s bear market of 2022 breaks some of the most popular pricing patterns

For many years now, cryptocurrency traders have leveraged tools, charts and models to predict the future value of bitcoin (BTC) and other popular digital assets. Bitcoin.com News has written about the Plan B stock-to-flow (S2F) pricing model on many occasions, and in 2021 the S2F model was fairly accurate until the end of November.

Additionally, many bitcoiners rely on other price charts and models such as the golden ratio multiplier, Fibonacci sequence, rainbow model, and logarithmic growth curves. During the last quarter of 2021, bitcoin traders expected BTC to hit $ 100,000 per coin by the end of the year.

Rainbows, Logarithmic Charts & S2F: Bitcoin 2022 Bear Market Breaking Community's Most Popular Pricing Patterns
BTC / USD weekly chart via bitcoinwisdom.io on August 5, 2022.

In September 2021, when BTC was trading prices between $ 45,000 and $ 50,000, Blockware Solutions’ lead analyst Will Clemente tweeted about a new pricing model he called the “Illiquid Supply Floor”. At the time, Clemente said the model combined Glassnode’s illiquid supply data with Plan B’s S2F model and claimed to have created a minimum bitcoin price based on BTC’s real-time shortage.

Clemente’s expected minimum value was $ 39,000 and over time the analyst’s Illiquid Supply Floor model broke. Even after Plan B’s S2F “worst-case scenario” forecast was skewed in late November, the pseudonymous analyst said he was confident that the price of bitcoin was still “on track to $ 100,000”.

None of these bold predictions have come true, and during the onset of the bear market for cryptocurrencies, these types of pricing patterns have been openly mocked and denounced by many people in the cryptocurrency community. Illiquid Supply Floor was not solid, S2F failed and people made fun of the popular “Rainbow” price indicator.

The popular Power-Law corridor model experienced an 86 consecutive day outage from the norm

In addition, one of the most popular bitcoin pricing models, known as the Power Law Corridor Model, or Logarithmic Growth Curve Graph, was also broken since May 11, 2022. The chart is preferred because BTC’s price timeline can be viewed from a logarithmic perspective. In fact, a log price chart is one of the most popular in the world of cryptocurrencies and traditional financial technical analysis.

The graphs of bitcoin’s logarithmic growth curves are hosted on cryptographic web portals such as lookintobitcoin.com and coinglass.com. The current deviation is unusual as BTC’s price fell below the lower range only twice in history before 2022. The first deviation occurred quickly in October 2010 and the second most noticeable deviation occurred the March 11, 2020.

Rainbows, Logarithmic Charts & S2F: Bitcoin 2022 Bear Market Breaking Community's Most Popular Pricing Patterns
Bitcoin logarithmic growth curve chart on August 5, 2022.

March 11, 2020, otherwise known as “Black Thursday,” was an interesting day for every asset on planet earth as financial markets were shaking across the board. At that time, BTC broke below the $ 4,000 range and the move fell below the low development line on the log growth curve chart.

This specific event did not last long as global markets rebounded from the initial scare of Covid-19 and a bull market occurred almost immediately afterwards. Bitcoin’s price skyrocketed in the $ 64,000 zone in April 2021 and above that range to $ 69,000 on November 10, 2021.

Nine months later, the price of bitcoin (BTC) fell 66% below an all-time high of $ 69,000 and the popular and often reliable log growth curve pattern was broken for 86 consecutive days. Although BTC saw the first bear market rally, the price still has a long way to go to return to the lower end of the power law corridor.

For the price to do it now, the price must be just above the $ 35,000 range. Bitcoin’s price has never crossed the low band line for so long, which is unusual when looking at BTC’s 13-year price cycles. The breakup shows that markets often follow specific laws, patterns and mathematical models, but these types of technical methods don’t always ring true.

Currently, the latest bear market rally and other factors indicate that it is entirely possible that the minimum is expected for this specific cryptocurrency winter, but as charts and signals like these have broken in the past, it means that no one can really guarantee that. the bottom of the cryptocurrency market is in.

Tag in this story

Analysts, Bear Market, Bitcoin, Bitcoin (BTC), Black Thursday, broken patterns, BTC, real-time shortage of BTC, Charts, Illiquid Supply Floor, log growth curves, Plan B, Plan B S2F, power corridor model- law, price indicator, price signals, pseudo-anonymous analyst, pseudonymous analyst, Rainbow price indicator, S2F, stock-to-flow, TA, Technical analysis, Will Clemente

What do you think of all the bitcoin pricing models that have broken in the past? Let us know your thoughts on this topic in the comment section below.

Jamie Redman

Jamie Redman is the News Lead of Bitcoin.com News and a financial technology journalist living in Florida. Redman has been an active member of the cryptocurrency community since 2011. He has a passion for Bitcoin, open source code and decentralized applications. Since September 2015, Redman has written more than 5,700 articles for Bitcoin.com News on the disruptive protocols emerging today.




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