Taking Profits – Considerations

Einstein is often quoted in the field of economics. The saying “Compound interest is the eighth wonder of the world. He who understands it, earns it. He who doesn’t, pays it”, or something to that effect, is often attributed to him along with the associated “Rule of 72”.

The story of that being an Einstein quote is almost certainly apocryphal, and the Rule of 72 is definitely not Einstein’s work (as if the father of Special and General Relativity needed a cheat method to estimate logarithms! 😆 ), BUT – the essence of the quote is absolutely true.

Compound Interest is an incredibly powerful way of growing wealth in a relatively easy and safe manner, with the major variables in the equation being Initial Investment, Interest Rate, and Time.

As much as we would all like to be rich, that isn’t a reality. Compound Interest presents one option for the “not rich” to possibly become a part of “the rich”. It’s a method which is highly applicable in the crypto world, and one which I personally use daily.

Earning Interest

At the moment, I reinvest every crypto gain I can back into the crypto market. Anything I earn from my blogging gets invested, and dividends paid get invested. Airdrops, hard forks, competition winnings, donations, staking rewards… every last little bit goes back into crypto. I have never withdrawn a single sat.

In this way I earn interest not just on what I initially put in, but also on my earnings. It’s not all strictly “interest” per se, but the effect of holding assets which increase in value over time is essentially the same as interest.

Taking profits is the opposite of that. Taking profits removes money from the interest earning equation, and leaves you with less earning potential. For that reason, it’s important to get it right, you don’t want to shoot yourself in the foot by taking profits in a manner which will hurt your investment.

Looking at the three variables of compound interest, we can see where and how manipulating each variable changes things.

Initial Investment is the amount of money that we put in. The more money we put in, the more we earn (how many of you wish that you had put more money into crypto when you started? I know I do!). You can add money into crypto after your initial investment, and it’s a good idea to do so, but the general rule of thumb is: “the sooner you put it in, the better”. Of course I understand that we put money into crypto as it becomes available to do so, so please, this is not me saying “don’t DCA!”, but rather “it’s better to go big early than to invest in a piecemeal manner over a period of time”.

Interest Rate is something which we don’t have much control over. Yes, we can chose which coins to hold based on their returns, but we can’t control how they increase in price, and we alone can’t determine something like the interest rate earned on a staked coin. Indeed, even though there are coins which offer a very good APY, e.g. 20% or more, this figure pales in comparison to the gains that cryptocurrencies themselves make during a bull market. The majority of “interest earned” in crypto comes from the gains in value that cryptocurrencies make during bullish periods. As I write this now, I have six coins which have gone up by more than 20% in the last 24 hours alone, that’s the “interest” I want to compound!

Time is the variable over which we probably have the most control. For the patient investor, time can be the great equaliser. It’s the way that a more patient poor investor can catch up to a less patient rich investor. Time is the reason that investing sooner rather than later is a good idea. The longer your money sits in crypto, the more chance it has to earn “interest”. For instance, if you invested $100 invested today in a coin which averages an annual price increase of 50%, it would be worth $150 a year from now. But if you left the same $100 for four years, it would be worth just over $500.

The difference is non-trivial: the $150 payout means that you’ve earned an average profit of $50 per year. But the $500 payout means that you’ve earned an average profit of $100 per year – double what you would have earned with the shorter investment! What if you left it for 10 years? Then you would have $5766, an average of $567 per year!

Doubling your initial investment would double the profits you make, but doubling the TIME that you leave the money invested for, that leads to exponential returns! For this reason, it is absolutely vital not to take profits too early! When you take profits, you no longer earn gains on all your interest, and you invalidate the benefits of the compound interest equation.

Taking Profits

The key to successfully taking profits is simple: if you are able to do so – don’t take any.

I’ve been running the numbers for some time. I knew a bull run was coming and I knew that it would be a good profit taking opportunity. I also remember that during the last bull run I found it difficult to divorce my emotions from my trading decisions. in preparation for that, I decided to determine a profit-taking plan before the market hype set in.

After many attempts, this is what I found:
There is no scenario in which taking profits works in my favour. No matter which strategy I use, no matter how much (or little) I take, no matter how seldom I take profits, no matter at which BTC price I take profits, I end up losing out in the long-run. And by “losing out” I mean significant losses.

I sat for many hours with the spreadsheet below, working and reworking the figures and strategies.

I found that the second you take profits instead of reinvesting them, you break the power of compound interest. Though I already knew this before going to the spreadsheets, I was hoping to find a way that I could take small profits while not affecting the later figures by much. There is no such way, not unless you’re willing to take profits that are insignificantly small, and what would be the point of that?

The thing with compound interest is this, it is most powerful in the last few periods for which it is calculated. So if, for example, you earn compound interest over a period of 10 years, the greatest gains, by far, are realised in the final two years of investing.

Going back to our earlier example – the $100 which became $5766 after 10 years – more than half of that amount is made during the final two years. After eight years the return is only $2563, meaning that $3203 of the $5766 is earned during the final two years.

If I took profits of just $10 of the $150 I had after the first year of investing, it would translate into the loss of $384 after 10 years. Taking $10 in profits after 1 year means that I get $5382 instead of $5766. And $10 taken from $150 is only 6.7% – hardly a large amount.

The message is clear: taking profits today greatly hinders your ability to make big profits in the future. The longer you reinvest everything, the better – by a HUGE margin!

There is a caveat…

Taking profits – without hurting your investment

There is a way to take profits without harming your investment. In fact, you can help your investment along.

Unfortunately, the old maxim applies to this scenario: “there is no such thing as a free lunch.”

As with most things in crypto, if you want greater rewards (or a higher “interest rate”, if you want to see it that way), you need to accept higher risks.

IMPORTANT: Accepting risk is not for everybody! I am a BIG fan of the HODL strategy, and for good reason. It gives a great return, it’s safe, it’s easy and just about anyone can do it successfully if they are patient. If you are risk averse, new to the market, in a fragile economic situation, not good at market analysis or just in doubt, then I suggest that you just continue to HODL. It’s all I’ve been doing for years, and I’m not sorry.

For those who do want to take profits and not hurt their investments, the solution is fairly obvious: sell at the top and then buy back in at the bottom. During this process, you can take a little profit on the side – as long as you buy back at least as much crypto as you sold!

While this sounds obvious and easy, it isn’t. The reason for that is simply that nobody has a crystal ball which can predict the future. We NEVER know when we are at the top of the market and we NEVER know when or for how low it is going to dip. For this reason, we have to compromise when we trade: either we sell too soon and leave some profits on the table, or we risk missing the top (and therefore our opportunity to sell) entirely. The inverse applies at the bottom of a bear market.

Things change VERY fast in crypto. Your chances of hitting the very top of the market, or even calling the top within about 10% of it, are almost zero. Imagine you sell your BTC at $200 000 because you think that’s the market top, and then BTC keeps on climbing for three more months, up to $350 000. That’s a realistic scenario. How will you feel then? It’s a bitter pill to swallow, and the temptation to FOMO back in would be very real!

Similarly, let’s say you sold near the top and are waiting for a buy-back level. You want to buy at $40000, but BTC hits $75000 and then turns positive. What then? These things happen! In April of 2018, BTC dropped to $6500 and then started climbing again. It climbed for three weeks, up to almost $10000 before slowly turning negative again. How would you have felt during this time if you had been waiting for a price of $6000? Would you have been able to wait, or would you have panicked and forced a FOMO buy to avoid missing out?

You can not ignore the mental effects of trying to time the market and you can not ignore the fact that the risks are real. BTC may NOT hit your buy price! You may well miss the re-buy point entirely, that’s a real risk. Throughout 2019 I heard people say over and over again: “I’m just waiting for one more drop to $6000/$5000/$3000 before I buy”. Perhaps those guys were lucky, they got the rapid dip at the start of the Covid-19 drama, though I suspect that by then most of them had already capitulated and bought back in at a far higher price. But even after the March 2020 Covid dip, I still heard people waiting for another $6000 or $5000 or whatever price they wanted, only to see BTC keep on climbing and climbing to the prices we see today. So the risks of missing the boat are real, as are the stresses involved.

Good information is crucial to the making of good decisions. This presents a challenge to us. It is vital that you acknowledge just how new cryptocurrencies are as an asset class. While we have seen a few market cycles in the past, we still have a statistically tiny number of cycles from which to work. We do NOT have well established trends or models yet, at least not ones accurate enough to trade on. We have best guesses based on extrapolated data, but we know that those guesses will grow increasingly inaccurate over time.

Remember: you are not special. You are not the one to which the rules do not apply. Most amateur traders lose money. Fact.

I am working hard to try to determine the most accurate trendlines possible. I am also devising a profit-taking system of my own based on those trendlines. It is a “sell and rebuy” system like the one described above, but it is still a work in progress. I believe that I am getting close to a good and accurately predicted strategy, but even so, it’s still susceptible to the risks mentioned above. I have started typing a post about my strategy, but like the strategy itself, it’s still a work in progress. If I can get it to a level at which I am 90%+ confident in it, I will share it with you and will execute the strategy myself.

Further Considerations

Before I end this post, there are a few more considerations which I would quickly like to mention.

When taking profits, plan which currency what you wish to sell into. Fiat currencies are an option, but I do not recommend them. Fiat currencies are immediately traceable by governments and banks, once you sit with fiat transactions, you sit with the issue of paying tax on your crypto gains. As I have said before: crypto has NOTHING to do with your government or banks, and they have no right to tax you on it – provided that you leave it in crypto. If you’re careless or cowardly enough to tell your government what you are doing in the world of crypto, well then, that’s your fault. Remember: the most effective way to imprison a person is to get them to build the prison walls within their own mind. Are you your own jailor?

What that means is that it’s probably best to trade BTC into stablecoins. As much as I hate stablecoins – they’re really just money-making schemes for centralised entities – I hate fiat currencies a whole lot more. Yes yes, I understand that stablecoins form a bridge for users and that they offer convenience and familiarity. But if they are so terribly necessary to crypto, how is it that I never need to use them? That will change if I decide to take profits. I’ll sell BTC and hold it in stablecoins, and then buy it back later. Note, I said stablecoinS. Since I don’t really trust or believe in any of them, I’ll trade into several of them, in order to split the risk.

If I do take some profits for myself, chances are that I’ll invest some of that money in precious metals. While inferior to crypto in many ways, there is still serious value in Gold, Silver and Platinum (hot tip: I think that Platinum is going to do very well this year!). Holding precious metals helps to further spread risk and is a good idea. Just note that the precious metals market is also complex, not to mention highly regulated. DYOR before you even dream of getting into it. (Leave the more exotic precious metals like Rhodium and Palladium unless you really know what you’re doing.)

I will never sell all of my BTC. I don’t see myself selling more than half, and that’s a maximum figure. I need to mitigate some of the risks, risks like “BTC just keeps on climbing” or “Tether turns into a full-blown exit scam and goes to zero”.

There is another consideration: so far I’ve only really spoken about BTC, what about the altcoins? When and how does one take profits on them? That’s a particularly difficult question and there is no simple answer to it. Some altcoins are staked long-term and can’t simply be sold without sacrificing major future gains, if at all. Some, like exchange coins, may do well during periods of bearish selling and may be worth holding no matter what the market does. Some may be going through periods of great adoption and increasing in value despite an opposite market trend. Some may benefit from a hype event such as a main net launch.

It is my opinion that most altcoins are undervalued. I measure altcoin value in sats. Apart from a few over-hyped coins, most of which are currently in the top 20 by market cap, I expect most good (not the hoards of trashy ones which are designed to make someone a quick buck) altcoins to see new ATHs when measured in sats. Taking profits in altcoins is about having realistic expectations as to what total market cap the coin might reach, and about not missing selling opportunities due to excessive greed. When I sell altcoins, I sell to BTC. The job of my altcoins is to help grow my BTC stack. At the end of the day, BTC is my one and only long-term store-of-value coin, so it makes sense to bank my gains in BTC.

Exactly when and how much I bank is hard to say. I truly believe that some of my altcoins have the potential to rival some of the largest companies in existence today. Cryptocurrencies are not the same as shares in a company (in most cases), but they behave in a similar fashion. There is no reason why we can’t have trillion dollar market cap altcoins. Because of this, I will probably never sell my way entirely out of a good altcoin, at least not for the purpose of taking profits. Instead I will sell e.g. 10% of it at a specific sats value, and another 10% at a value 5x higher than that, and another 10% 5 x higher, etc.

The final consideration I wish to mention is financial situation. It’s easy for me to say “Don’t take profits!”, but for some people it may be impossible not to do so. I am acutely aware of the dire financial circumstances in which many people find themselves, especially in these times of government mandated economic shutdowns and rapidly rising costs of living (inflation – note that real inflation and government inflation figures are two vastly different things!). I know that some people may have to sell their crypto even though they don’t want to. I sympathise.

What I do suggest to people in such a situation is: do your best to cut every other expense to the bone before selling off your crypto. From personal experience I can tell you that I took a 50% income cut two years ago. The way I survived was to start budgeting from the ground up. I terminated every contract, account etc that was costing me money, and focussed on paying off interest-bearing debts. I cut luxuries out altogether: no fancy phones, no new clothing, no vacations, no eating out, etc. I’ve even (politely) refused to let my wife buy me birthday presents since 2018. It’s not pleasant at first, but you soon get used to it. The long-term goals are more important to me than the short-term pleasures and I’m honestly not unhappy living this way. I’m sure that it actually does me good. Even so, I acknowledge that I’m lucky: I still get paid something – many people don’t, I could afford to pay off my debts – most people can’t.

So as a final message, I say this to you: do whatever you can to keep as much as you can afford to in crypto. I am staking my own future in it, and I know that every dollar of crypto I save today is potentially $100+ of crypto in a few years time. Whatever you do, I wish you luck and prosperity.

Yours in crypto

Bit Brain

All charts made by Bit Brain with TradingView

“The secret to success: find out where people are going and get there first” 

~ Mark Twain

“Crypto does not require institutional investment to succeed; institutions require crypto investments to remain successful” 

~ Bit Brain

Bit Brain recommends:

Crypto Exchanges:

Bitcoin and Major Markets – The post you MUST read!

Yesterday I was not worried. Truly, that dip did not bother me.

But things have changed.

We are experiencing the perfect storm. The last straw for the markets seems to be the Trump travel ban (the ludicrous one which excludes the UK and Ireland for “doing a good job” and which ignores the fact that the USA is one of the worst hit and fastest growing Covid-19 countries).

I’ve said on multiple occasions that this dip is not THAT economic crash – the fiat house-of-cards collapse which many of us have been expecting to see in the near future. I stand by that statement. For now…


That doesn’t mean that THIS collapse will be any better!

And a collapse it is…

The significance:

Yesterday my BTC price long-term base trendline was breached. As I explained on Twitter, there are circumstances under which this can and does happen. It did not matter at that stage.

But BTC has subsequently plunged beyond (and stayed there) to levels which indicate that this will not be a “quick dip below the line” or just a tail on a weekly candle.

The important thing is that a VERY substantial and important BTC trendline has broken down. This is not an analysis fault on my part. It is not a TA fault with a misplaced trendline.


Read that again, it’s important.

Note that I did not say “dip”. Nor did I say “contraction” or “retracement”.

I said “collapse”, and I meant it!

Remember Bit Brain’s Fourth Law of Crypto which states that: Technical Analysis is a graphical representation of market psychology. It is a way to visualise the feelings of masses of people wrt trading.

TA is psychology on a chart. People don’t panic because charts dip; charts dip because people panic!

The complete breakdown of my long-term base trendline for BTC means that the markets are suffering a complete breakdown!

Do not make the mistake of interpreting this as “analysts who got it wrong and are justifying their poor predictions”. If that were the case then I wouldn’t be writing this post and drawing attention to it.

Also: do not make the mistake of following the predictions of some lucky outlier analyst who guessed right and happened to call this crash from a long way away. Prior to about a month ago, there was no indication as to how bad things would get. A good analyst could have called this as part of a worst case scenario a month ago, maybe some of them did, but I didn’t see any do so.

Future Implications

Firstly: don’t think that this is a crypto issue, it isn’t.

The crypto crash is only a symptom of a much greater problem. To sell crypto now would be foolish: it’s already taken a larger hit than most – so selling it for something else would mean making a loss (even if you are ahead in USD terms). I can’t tell you what to do, but what I am going to do is to hold through this crash until we come out the other side. I’m not selling crypto at a loss.

I can say that because while TA may not longer be on our side, the fundamentals of crypto are as strong as ever!

The charts may have changed, but nothing has changed in the fundamentals of Bitcoin and the alts. Each and every reason we have to believe in the massively disruptive
revolution that public blockchains are is still 100% valid.

My faith in blockchain tech and its associated cryptocurrencies remains absolutely unshaken.

In other words: I have no doubt that crypto will not only recover from this, but thrive. Perhaps next time around BTC will be seen as the ultimate store of value.

The second major implication is that the major fiat crash has yet to come. That will be the crash based on loss of faith in fiat economies. This crash may still turn into that crash, but we have yet to
see significant signs of that happening. If Covid-19 hangs around long enough, it is possible that the fiat monster – already stretched rather close to breaking point – may collapse entirely.

Assuming that the lose-faith-in-fiat-economies crash does not occur; the effect of a corona-crash will be that it is likely to delay that crash. It will do so by resetting the values of over-valued pseudo-assets, a process which is already well underway.

Whatever happens, crypto is still the place to be in the long-term.

The final major implication is China (again).

It was only the other day that I spoke about how I hate having to praise a communist government for its actions, and yet here I am – doing it again! (Perhaps that demonstrates just how seriously our ridiculously liberal and corrupt Representative Democracies have failed?)

China has not only beaten Covid-19 (to all intents and purposes), but it has managed to end up with the bulk of global manufacturing capability located within its very own borders. In a virus-ravaged world, that gives the Chinese economy unrivalled power and far greater ability to recover from a disaster than anyone else. Chinese manufacturing stocks may be the best place to invest right now! Already its economy seems to be weathering this storm better than many others, despite strict lock-downs and the highest number of Covid cases to date.


I realise that this post is somewhat distressing, but unfortunately that can be the nature of the game. As a realist, I must tell it like it is, even when the truth hurts. My own portfolio is lying in tatters, leaving me in an even more precarious situation than usual. I know how it feels. Nevertheless; I do not believe that having faith in crypto is a naive or foolish pursuit, and I will continue to buy more of it if I manage to get money to do so. (I bought yesterday, just by the way.)

If you are looking for Covid-19 insights and information then do not miss my post “Analysis of a Sick Market – Part 1 (The Virus)” from earlier this week. It will not only tell you the important things, it will tell you that which others don’t.

DO NOT UNDERESTIMATE THIS VIRUS! I see far too many complacent people doing that, it is most distressing! (Not to mention selfish and foolish!)

Good luck out there guys. I hope you can weather this storm without too much hardship. The best advice I can possibly give you is this: “don’t panic”. Stay calm, stay rational. Avoid making
decisions in haste. Do what you need to do to get by for now, and we can pick up the pieces on the other side of this disaster.

The Sun will rise again!

P.S. If you just need to chat / unload stress / rant a little / discuss your fears / whatever – my ear is available to you.

Yours in crypto

Bit Brain

“The secret to success: find out where people are going and get there first” 

~ Mark Twain

“Crypto does not require institutional investment to succeed; institutions require crypto investments to remain successful” 

~ Bit Brain

Bit Brain recommends:

Crypto Exchanges:

In trading move technically and not emotionally BTC / USD

Hello, everybody! :), today I wanted to share with all of you this chart I made where I put in perspective why this year 2020 I want to be highly bullish, we have an excellent scenario here present that any trader or investor would buy, the hyper bullish triad of a bullish flag, a cup & handle and an inverted SHS, all the package together at the same price!! far from the emotional chatter that can be read by crypto twitter during the last week, in which most tend to repeat at any time of the trend just the cry of let’s go to ATH!, without taking into account the corrections on the way, as a holder or long term trader, that’s not bad, but for a day trader or swing trader, that’s important 

I hope this post and the chart will be useful to understand the reason of this next third bullish wave, out of this year’s halving or the gold cross that many are announcing these days without taking into account that these indicators don’t work in real time, the cross will happen in due time after the correction and after the strong rise that we will have during the month of March, but for now it is time to wait for the train to take us to the launch area where the rocket is ready along with the strong volume investor ready to go to the moon, if you have not yet bought, this will be your last chance to do so at a very good price, BTC will not return to that level 

This post only represents my personal opinion, it is not an investment advice, I am not a financial advisor, always remember to make your own analysis when trading 

You can follow me on Twitter: https://twitter.com/armijogarcia

Be aware BTC / USD – 4H

The price is forming a bearish pattern in the upper zone, the structure formed so far suggests a strong fall 1 – 5, we still do not have confirmation, the price must break the support diagonally of the full wave and below the support located at 9500 to confirm the movement, however, the break can be strong, for that reason I am giving this update in time in case you do not have your operations protected, we have demand zones within the range of 9500 – 9400, the next demand zone is located in the 9100, the third demand zone is located within the range of 8700 – 8200.

Remember that much of the market would be affected by a strong correction, especially USDT pairs.

You can follow me on Twitter: https://twitter.com/armijogarcia

Binance’s 10th Token Burn

Binance was founded and
run by the one of the great minds in the crypto space, Changpeng Zhao aka CZ.
CZ was originally a coder who built high-frequency trading systems on Wall
Street. He eventually moved into the crypto space working for crypto
wallet/block explorer service Blockchain.info and serving as CTO for the crypto
project OKCoin.

But then CZ lauched Binance in the 2017 and in nine months, Binance became the world’s largest cryptocurrency exchange by trading volume making CZ a billionaire in the process. The rest is kind of history, but Binance continues to make history and make money moves.

In July 2019, Binance created a new entity in Singapore with Vertex Ventures. In Nov. 2019, they acquired WazirX, India’s largest cryptocurrency exchange. Recently, they made it possible for the people in Thailand to trade and invest in cryptos.

Related image

Why the emphasis to expand in Asia? Southeast Asia is the cryptocurrency capital of the world. Most of the bitcoin trading volume and cryptocurrency demand comes from this region. South Koreans spend billions of dollars each year on digital goods like avatars and digital gifts.

South Koreans spend billions of dollars each year on digital goods like avatars and digital gifts. Combined with their love for gambling and speculation, along with their love for digital goods, buying cryptocurrencies instantly became a part of the culture.

Binance just announced its 10th successful quarterly burn in a blog today, and with it, a total of 2.216 million BNB tokens worth $38.8 million were burnt from October to December 2019.

Image result for binance 10th burn

When you think about it, burning tokens in crypto space serves the same purpose of companies on the equity markets buying back their shares…it’s all about the perception of supply and demand and how we value that supply and demand of shares/tokens. But in the crypto space, unlike the equity markets, when a crypto company buys back their token to burn, that token disappears forever.

The main reason for burning a cryptocurrency is to increase the value of the other tokens that are in circulation. Many cryptocurrencies have a finite total number that can exist and therefore, assuming the demand for the token remains the same, the value should theoretically go up if there are less in circulation.

But even if Binance didn’t have any token burns, their token price would still go up over time because they continue to make history and innovate. So where is price headed next, the chart suggests, price is heading to the weekly supply at $23.

This post is my personal opinion. I’m not a financial advisor, this isn’t financial advise. Do your own research before making investment decisions.

Round Pegs in Square Holes (Bitcoin)

This is not a quick read. I don’t apologise for that – it’s a really good post and it may teach you a lot about long-term BTC trends.


In a sea of crypto analysts, it’s important that you are able to differentiate the good from the bad from the ugly. The good and the ugly are fine (I’m both), but the bad are – by definition –
no good.

The New Year has heralded the dreaded return of price predictions, exacerbated in this case by the upcoming infamous Bitcoin halving. I tell you again, all the halving affects is short-to medium term price volatility, not long-term price! These two posts remain more relevant than ever:

· The Bitcoin Halving Event – Part 1

· The Bitcoin Halving Event – Part 2

I don’t bother myself with short-term Bitcoin price movements, I’m an investor, not a trader. What matters to me is not that Bitcoin has gone up (or down) today, but rather that it will have gone up a lot five years from now!

With this in mind, I focus more on long-term charting than on short-term charting. Long-term charting is more predictable, accurate – and to investors such as myself – useful.

If you are a trader, then by all means trade – but to me BTC is an investment asset. Traders help with liquidity and volume, so they do help the overall credibility of BTC a bit, but it is the investors who
BELIEVE in BTC and who are actively driving the adoption of crypto. Those who have the belief in BTC – enough belief to hold it as a long-term asset – they are the ones who are really driving the adoption of crypto and the
creation of a better world for us all. But enough about that, let’s get to the interesting stuff!

Round Pegs in Square Holes:

I often publish long-term BTC charts. On the majority of these charts you will find my “Long-term base trendline”, such as in this chart from the end of December post: “Bitcoin – Approaching 2020”.

But what is this line exactly? What does it mean? Is my line better than anyone else’s line?

Without the answers to these questions, my line is just another random line published by just another crypto analyst. It’s equal in status to any other similar line you may know of.

With the answers to these questions my line becomes a veritable tour de force – an answer to questions yet to be asked and a Sword of Damocles above the head of lesser analysts!

This line is thus very important to me, I stake not only my reputation on it, but also my own investment strategy.

Caveats: NEVER have I had a line on a chart which stays fixed indefinitely. It’s true that this particular line is about as fixed as they come, but it DOES move from time to time. So far the movements have always been very small – more “adjustments” than “movements” – call it “fine tuning”. Just note that the line is not 100% fixed and is consequently not 100% accurate. Also note that while it is valid 99% of the time, there ARE times that price can momentarily dip below it when BTC has serious negative momentum. Such dips never last, but they have occurred in the past, and will probably do so again in the future. That being said, I have great faith in this line and have spent so much time on it that I am absolutely satisfied with how accurately it is dialled in right now.

But not everybody would agree with my line – and they have strong reasons not to. This post shows you why, and then explains why I have chosen what I have chosen. As always – YOU must decide for yourself!

Round Pegs

While I choose to use a straight line, there are those who prefer curved lines. They are in the majority.

[Pause for quick rant]:

When has “Majority” ever equated to “Right”? Anyone with an understanding of politics, the media or propaganda can quickly point out the logical flaws in using populism as a basis or substitute for correctness!

[Rant over]

Don’t ignore that rant, it’s important. Now let’s look at curved lines:

There is considerable evidence to show that logarithmic curves can be made to fit the history of BTC price. You will often see charts such as this one:

On the face of it that’s a great looking chart. The indicator lines do what they should: they hit the tops of the peaks and the lows of the troughs. They are consistent curves which account for all prices during the time period, and they narrow together over time – accounting for reduced volatility as the market matures.

It all sounds so very credible – right?

It really does, so much so in fact, that I was quite impressed the first time I saw such curves used (about two years ago).

But taking something at face value is not a Bit Brain trait, especially if there are flaws in the logic or rationale behind it.

Look: the model is good. I am genuinely impressed by it and I think it does a pretty good job of accounting for BTC price at the moment. But I am concerned because I have found flaws with it and I don’t know how well it will hold up over time.

I DON’T KNOW the right answer here, because I can’t tell the future. I look at the data available to me – ALL the data – and then I try to make the best judgement calls I can based on that. These curved lines don’t account for all the data, which is where the problem come in. I KNOW that I’m not always right, but I have a higher chance of being right because I’m not looking for the simple answer. I’m not looking for that one curve that fits all the data. Similarly, I’m also not ignoring all the data that doesn’t fit, or making overly broad price brackets to try to account for all anomalies (here’s looking at you stock-to-flow!)

But Bit Brain, what’s wrong with these curved lines? What don’t they do?

I’m glad you asked…

They simply don’t fit all the observed data. Spot the problem on the chart below (which goes back to mid-2010 as opposed to the mid-2011 chart seen earlier):

It may not look like much, but it’s there at the beginning. The curve simply doesn’t fit all available data.

Can ANY curve fit the all data? As an experiment, I tried to construct my own curve to fit all the data, or at least the data with respect to the low end of the BTC prices over time (similar to the bottom curve on the chart seen above). Here is what I got:

That’s the best I could do.


The line I drew is about as close as you can get to an all-data-encompassing-curved line for BTC base price over time. It’s no good because the BTC price is way below it near the beginning, but it’s still about the best you can do. This is how it looks next to the curved log lines that are commonly used:

“Houston, we’ve had a problem.”

Remember that there is another year and a half of (unavailable on my charts) data before this time (mid-2010) which only makes the problem far worse!

The commonly used logarithmic curves don’t fit. So what now? How bad is the problem? Is it really a problem? How will this play out in the future?

Once again I DON’T KNOW, but I DO KNOW some other things and I will use those to show you why I use what I do.

Summing up the Round Pegs:

It is my suspicion that the curved lines are working semi-well for a moment in time. The curves are not too far off reality, even though they can’t account for outlying information, so they look good. But I suspect that they will begin to degrade at increasing speed over time. Anomalies and/or a price trend shift away from the curves may well render them useless in times to come. I suspect that the curves will hold true for the next five years or so, but doubt that they will last for a decade. During this time (if I am right), they will become increasingly useless as prediction tools, because their lower and upper limits will begin to stray away from the lowest points of bear markets and the highest points of bull markets.

I believe that the curves fit a snapshot of time: for now that time is June 2011 to date. I suspect that they may have useful a shelf-life of approximately 15 years.

While we’re at it…

I mentioned stock-to-flow earlier. It’s not strictly related to these log curves, but Stock-to-flow is wrong in the same way that I say the curves above are wrong, but only more so – MUCH more! In addition to this, there are FUNDAMENTAL REASONS WHY STOCK-TO-FLOW IS WRONG! Those reasons are the same as other supply-sided arguments which I debunk in my “Bitcoin Halving” posts, as linked to at the beginning of this article. Go check them out.

Before I let Stock-to-flow off the hook and move on, let’s take a look at a chart or two:

Having trouble getting all the data to fit? Just make ridiculously broad price bands to encapsulate all the data! Ignore the fact that some data STILL doesn’t fit your model!

From https://cointelegraph.com/news/new-bitcoin-stock-to-flow-chart-shows-bearish-periods-precede-halvings

Or how about this, from PlanB themselves: Remember that EACH VERTICAL BLOCK represents a factor of 10x. So if an arrow is one block high, then PlanB’s predicted price is ten times too high or too low!

From https://twitter.com/100trillionUSD/status/1151077015149260802/photo/1; modified by Bit Brain

The largest of those arrows shows that the real price is about 14 times higher than the predicted one! I mean, come ON! Why would anyone use this? Remember my rant earlier about the difference between being popular and being right? Now you know why I say that…

Square Holes

Right, now here comes the tricky part: I’ve ripped the arguments of the majority apart, now I have to justify and explain my own standpoint. Here goes:

The key to my long-term trendline is this: I don’t try to fit all the data into one all-encompassing line.

I do not believe there is a way to fit all the data neatly into one indicator (short of using ridiculously wide price bands to account for all anomalies). I look at the markets and their history, I take the fundamentals into account, and then I try to project what is left in the form of usable indicators.

Below is another look at my long-term base trendline, this time seen in its entirety. Note where it begins: mid-2013.

I have often stated that I do not trust BTC data from the early years of BTC trading. I normally state that mid-2013 is the time that I start to find data sufficiently representative to provide useful statistical value.

The reasoning behind this is simple: Prior to 2013 Bitcoin simply wasn’t big enough, I’ve said this before but it bears repeating. There were not enough people invested in Bitcoin. They were not financial investors, they were not trying to to find fair price or make winning trades. They were tech geeks, cryptographic geeks, computer scientists and programmers who were playing with a new toy – taking a long shot that had little chance of going mainstream. The further you go back, the more true this becomes.

Any big buy had a radical effect on the price of BTC – which traded for less than $10 for most of that period and for less than $0.50 prior to 2011. You have to understand that even though logarithms do an excellent job of accounting for both small and large numbers in the same data-set, those numbers have to be consistent in order to provide good data without corrupting the model. Early BTC data is NOT consistent enough! It’s not something such as cell division which happens at a predictable rate and then to leads smooth, chartable exponential growth. Filling an equation with anomaly prone data taken from an overly-small data set is scientifically incorrect and will not yield a correct result! You have to have a sufficiently large sample size in order for the statistics to become valid. In the early days of BTC, the sample size was simply too small.

I’m really not comfortable with the way that logarithmic BTC price explanations try to incorporate all this old garbage data into their models. That’s why I ignore the early data entirely on my charts. From a fundamental perspective I haven’t ignored it, I’ve realised that it’s not proper data. I know why the data is bad and I know which data is bad. Thus my method incorporates all the given data, while remaining accurate by filtering out that which is not relevant – at least that’s the theory – a theory which is better than any mainstream ones I know of.

So that you don’t have to take me at face value, let me show you a chart or two which should help you make up your own mind on this topic:

The chart below expands on one of the charts we saw previously; the one with the “This is a problem!” section at the start of the log curve data. Here we can see that region in context, along with the regions which come after it (which I described earlier). The log curves are overlaid on the chart too.

My own model doesn’t use either of the first two regions.

Below I have removed the log lines and replaced them with an ascending channel, the base of which forms my long-term base trendline.

Starting to make sense now?

But wait, I’m not done yet…

I watch other major markets too. No market exists in isolation, they tend to influence one another. Some display similarities and correlations – we have such a case which effects BTC.

Early growth of BTC

BTC price shot up very rapidly in the early days – too rapidly to fit comfortably into accurate price models. Now: whether you believe me or not about the lack of BTC data in the early days making it impossible to accurately analyse and model that data, you will have to pay attention to the next point:

Bitcoin is often compared to Gold (whether a certain grouchy anti-BTC gold bug likes it or not). Both store value well, both are constantly climbing in value, albeit with some retracements and corrections when the fiat-based markets are booming. So here is an interesting little fact for you all: between the time of the Bitcoin Genesis Block and the start of 2013, Gold flew up in value. Gold went from approximately $830 at the time of the Bitcoin Genesis block, to over $1900 in August 2011, and then slowly dropped to around $1300 at the time I started trusting Bitcoin price data in mid 2013.

If market pressures were such that Gold got a huge boost, then such pressures may well have influenced Bitcoin too. Whether is was people looking for a store of value or just having money available with which to speculate is irrelevant; Gold went up very fast so it makes sense that Bitcoin should have done the same (much as Gold and Bitcoin have been doing since mid-December 2019).

The chart below illustrates this graphically:

It’s not just Gold – I used Gold because it’s easier for most people to see how it compares to BTC. You can look at the S&P, or the Dow or other large indices / commodities / etc. You’ll see the same thing.

Explanation / Summary

Here’s what I think happened: BTC was born after the market crash of 2008. It was born into the rapid recovery phase of that crash. Combined with its inherent early growth, this supercharged BTC in the early days – creating unrealistic and unsustainable growth rates for most of the first four years of its existence.

As can be seen from looking at Gold, the hype phase died away throughout the duration of 2012 and things went back to normal, which is why I only start to trust BTC after it settled down in 2013. It’s hard to say exactly when BTC data becomes trustworthy, there is no clearly defined line. I normally choose to use 1 July 2013 – the halfway mark. The reality is that it could have been a few months earlier, but not as early as 1 January 2013.

To put thing into perspective, BTC had a total market cap of roughly $150 mil on 1 January 2013. That grew to well over $1Bn in less than three months! At that stage BTC got noticed and became a serious investment asset. It then corrected downwards to below $1Bn by mid-year – which is when I start using the data – before starting to climb again. I attribute the climbing after June 2013 to organic BTC growth instead of to external market driving factors; which is why BTC then continued to climb – but at a different rate to what it had previously – while Gold continued to lose value and stagnate for the rest of the decade.

In basic terms: BTC only matured as an investment asset in early to mid-2013. Data before that time can be ignored – as long as you understand why it can be ignored!

Notes on Square Holes:

My straight line approach to the BTC base trend comes with a few caveats of its own. While my line is normally well labelled, it is commonly misunderstood. The Long-Term Base Trendline I show is NOT a price prediction! It is a BASE PRICE which BTC should remain ABOVE most of the time. Please bear that in mind if using my data or posts for information.

As I stated earlier, it can change over time. The changes will probably be hardly noticeable, but may occur. If BTC were to make a definitive drop below $7000 today and stay there, then my long-term trendline would have to either be significantly adjusted, or thrown away altogether. Here’s an interesting implication derived from that:

You won’t see Bitcoin selling for below $7000 again. Bit Brain has spoken.

(That excludes a whale tanking the price on individual exchanges, price display errors, Bitcoin being replaced by something better 10 years from now, etc)

I won’t go into the details because this post is long enough, but continued constant growth of BTC can also be largely attributed to the S-curve of technology adoption. I wrote about the S-curve in one of my earliest STEEM posts two years ago: check it out here “BITCOIN PRICE PREDICTIONS – Chart Display – Part 3 – The S curve (More good news!)”.

Footnotes and Conclusion

There is also a lot I can say about the nature of logarithms and using them in charting. I spent hours running common logs vs natural logs scenarios in preparing for this article – research which I am choosing not to include in the interests of keeping things on topic. But here are the sentient points:

  • The BTC price curve MIGHT be a natural log function, but this would only apply to more recent data (mid-2013 and beyond) and not before.
  • There is no log function that works for all BTC price data.
  • Log functions straighten out over time. Using a straight line might be an approximation of an log function, we will only know this after a few more years once either the logs or the straight lines start to diverge from the data observed.
  • This is what you get when you plot the natural logs of the base values of BTC on a chart .
    • You can see that it’s not a straight line (as a correct log function that explains all BTC price action would be), but that using straight lines over specific periods might work.
    • This ties in with what I said earlier about BTC normalising towards mid-2013.
    • The x-axis is the number of days since the genesis block.
  • My straight lines ARE actually log lines because they are only straight on Log (base 10) charts.
    • No I’m not elaborating on that now – this is a blog, not a mathematics class!
Made by Bit Brain using PlanMaker from the FreeOffice suite

If you’ve made it this far then well done – you may print this medal out and frame it as a reminder of your fortitude:

The truth is that right now there isn’t much difference between my straight line and the curved log lines, but over time this WILL change! In 2026 the commonly used base log line puts BTC crossing $500 000 while my trendline will puts BTC crossing $1 000 000 per coin. That’s a factor of two and is no longer negligible!

Continuing to put round pegs (log lines) into straight holes (straight trendlines) will work for a few more years, but if I am right about the holes being straight, then eventually those round pegs will no longer fit.

Yes I know I should have broken this post up. Once again I DIDN’T break up a long article because it loses it’s coherent logical flow and then you end up with two half stories instead on one whole one.

I hope that this article has achieved its purpose: to provide you with the UNDERSTANDING of why I use a straight trendline as my BTC base. I hope it shows you the difference between an analyst that develops and refines his own methods – questioning everything along the way, and those who use what is already available and merely try to fit lines and curves to what they see on the charts. I may not always be right, but I have a damn good understanding of the fundamentals what I do and how it works. When I am wrong, I make sure that I find out why and I take steps to correct that (and God knows I do make mistakes!)

So off you go now, the ball is in your court. Believe quantity or believe quality. No – you can’t take the middle ground – that’s just being wrong from both perspectives! I hoped you enjoyed reading this post as much as what I enjoyed writing it.

See you again soon.

Yours in crypto

Bit Brain

All charts made by Bit Brain with TradingView

“The secret to success: find out where people are going and get there first” 

~ Mark Twain

“Crypto does not require institutional investment to succeed; institutions require crypto investments to remain successful” 

~ Bit Brain

Bit Brain recommends:

Crypto Exchanges:

Bitcoin and Cryptocurrencies 2020

Yes I am still alive. (Sorry to disappoint you politicians, mass media journalists, bankers and other scum – you don’t get off the hook that easily!)

My recent silence has not been voluntary, unfortunately I am once again looking after an injured wife. Sadly this takes up the majority of my time, but now that she is slowly on the mend, I will try to get
back to my neglected blogging.

Let’s take a holistic view of the markets, looking at Bitcoin in particular but also at a few related events/issues/etc.

The year started with a bang – a literal bang if your name is (was) General Soleimani of the Iranian Revolutionary Guard Corps. Let us pause for a moment on this single issue, because the ramifications of that attack are potentially far-reaching. I’m not going to go into whether the attack was justified or not, what Iran did to deserve it etc – go down that path and you get lost in the nitty gritty – that I will leave up to you to decide for yourselves. Since this post is more about BTC than about how the world works, I’ll skip the detailed political/military/economic analysis and will merely mention the high level interesting effects that I think this attack has brought to light.

Bit Brainian thoughts to ponder over:

  • Media coverage was immediate and widespread – to a disproportionate degree if viewed against similar events.
    • This is exactly like the disproportionate amount of coverage received by Greta Thunberg. If you want to know more about how and why this happens, then don’t miss this spectacluar eye-opener: “When Children Cry”.
  • Wars make a very useful national distraction for presidents who are struggling with domestic opposition – Clinton launched a similar attack prior to his impeachment trial.
    • If you want to unite a divided population, then few things work better than a war. People forget their differences when they combine against an external “threat” – whether than threat is real or just a perceived threat created by the government propaganda machine (like the “threat” posed by Jews to Germany in the WWII era).
  • This was an inflationary move (in terms of tension and military aggression) that will destabilise the world. There is no telling how far this destabilising effect will go – a chain reaction is hard to control. With the global economy already on shaky ground, the tipping point of grand-scale economic systems-failure could come sooner (weeks or months) rather than later (within a year or two).
  • Bitcoin price shot up due to instability and uncertainty – or FUD if you prefer. Such a rise is a panic reaction and is based on very little fundamental reasoning.
    • The goldfish-like memories of investors may soon fade, sending the price of BTC back down by maybe $500 to $1000.
    • Ironically the more intelligent long-term investors will have been buying up BTC for years because of long-term instability and uncertainty of the fiat-based markets.
  • It’s interesting to note how BTC was clearly used as a store-of-value as soon as an international crisis loomed.
    • BTC’s transformation into “Digital Gold” in the eyes investors has spread beyond the realm of early adopters and is entering the mainstream collective psyche.
      • …which just makes Peter Schiff’s incoherent panic-ranting look ever more pathetic!


My last post of 2020 “Bitcoin – Approaching 2020” showed how everything was running exactly according to plan and prediction. Well, it was running exactly according to MY plans and predictions – if you follow lesser analysts and their incorrect tales of weak TA fiction, then that’s your own problem.

The post mentioned above was published on 16 December and I haven’t actually needed to update you since then, because that post has been right on the money ever since. Let’s recap a little and see what’s happening now.

The day after I wrote that post I posted this Tweet:

16 hours after Tweeting that, the price of BTC hit a seven month low and turned (generally) positive. The prediction was based on a triple-line convergence point, the details of which may be found in “Bitcoin – Approaching 2020” and which remain valid.


Until BTC has conclusively broken through the top of the descending channel, the scenario that BTC may continue to trend downwards remains. I BELIEVE that the price movement of BTC (and of crypto in general) has now turned around, but at this stage I am still willing to concede that I may be mistaken – though the evidence suggests that I am not.

To break out of the channel, BTC will have to break through the red zone depicted on the chart below.

Note in the chart above that BTC price is currently well above my projected price line (yellow), so (as I said earlier) don’t panic if the FUD-based buying comes to an abrupt halt and the price drops into the mid $7000s.

On the other hand, this buying spree and obvious faith placed in BTC as a store-of-value may well trigger another bull run and send crypto prices to new ATHs. At this stage we can’t tell what will happen yet, so just keep calm and take it day by day, remembering that crypto investing is a long-term game.

The performance of altcoins in 2020 suggests that crypto sentiment has indeed swung positive. Those who didn’t pick up alts in December (or earlier) may have missed the best opportunity to do so, though seen in the greater scheme of things altcoins are still ridiculously cheap and are well worth buying! Just remember that many altcoins are utter rubbish (even some big name alts, hey XRP? Hey BSV?), so choose carefully. Sure, the price of the bad coins will probably Moon when the other alts do, but so did the price of BitConnect once upon a time…

With the apparent change in sentiment, I have begun constructing new positive Fib levels (as opposed to the negative ones I was using in the descending channel – as seen above). These are still in the test phase and will require considerable tuning before they start to yield information worthy of “prediction value”. For what it’s worth, my positive Fib levels look like this for now:

I will probably keep the positive Fib levels away from my primary BTC chart for the time being, until such a time as I have confirmed that the descending channel is no longer governing BTC’s price movement. Adding too much data to a chart just becomes confusing and is undesirable, the fewer lines there are on a chart, the more I can see.


As described in my older posts, I expect BTC to now hover just above my Long-term Base Trendline for the foreseeable future – probably most of 2020. At some stage (or possibly stages) BTC will rise sharply up from that line and we will have another bull market – probably an unbelievably strong record-breaking one. Maybe it won’t be one big one, but rather a series of smaller bull runs, much like the mini-run we saw in mid-2019.

Whatever the outcome, I remain more bullish on BTC than ever before. I’m a long-term investor, when I buy something I’m looking at least five years into the future, more likely a decade or longer. I got into crypto because I saw the long-term potential of decentralised blockchain technology, a potential which will surely be realised.

I think that 2020 will be the year that the masses warm up to the idea of BTC, this will be the year that Bitcoin moves from “geek money” to “legitimate alternative investment”.

Remember that crypto is only a part of a balanced portfolio. I believe that crypto is very important, but I also believe in not putting all one’s eggs in one basket. You can, for example, be a fan of both Bitcoin AND Gold, or even Bitcoin and Stocks – don’t let short-sighted fools like Schiff of Buffett polarise your views.

I wish you all a merry 2020, and I look forward to interacting with all of you wonderful blockchain-friendly visionaries over the course of the year.

Yours in crypto

Bit Brain

All charts made by Bit Brain with TradingView

“The secret to success: find out where people are going and get there first” 

~ Mark Twain

“Crypto does not require institutional investment to succeed; institutions require crypto investments to remain successful” 

~ Bit Brain

Bit Brain recommends:

Crypto Exchanges:

Bitcoin – Approaching 2020

Oh how I wish we were seeing the kind of Bitcoin price action that we saw back in December of 2017! Alas, it can’t always be a bull market. However, while reading this post, remember that when looking at investments it is LONG-TERM performance that counts! Everything else is just “noise”.

Let’s fall into the trap of getting lost in some of that noise – just for the hell of it, and thereafter we’ll zoom out and see how the long-term market looks.

All is well

Everything is still going according to plan (almost uncannily so), even if the trend is negative. Counter-intuitively, this is a positive sign: a predictable market is more stable and easier to analyse accurately, it has less chance of giving (good) analysts a shock.

The current market has been incredibly predictable. My post of 27 November (uncreatively titled “Bitcoin – 27 November (Don’t Panic)”) shows exactly how predictable that market is, and how I am still calling the market today based on analysis that is now five months old. I strongly recommend reading that post as background to this one, it gives a much better indication of the age and accuracy of these predictions, as well as an explanation of what they are based on.


The yellow price prediction line seen in the post mentioned above is still in play. Remember: it is a rough indication of expected price movement – a “best guess” scenario and should only be taken as such.

The fact that it is still doing a good job 29 days after its creation is a positive sign. With BTC price sitting where it is right now, we can see that the prediction line is sitting about $500 below it. Again, don’t read too much into that, but – it is likely that price may drop another $500 or so before reaching the turnaround level.

The descending channel (you DID read that post I recommended earlier, didn’t you?) is still the dominant local price-governing pattern.

You can see my faint Fib-levels within the structure of the channel, levels which determine short-term price jumps, but which will ultimately become inconsequential in the long-term. Like other savvy investors, I have been making use of these levels to stack sats when BTC dips to the lowest levels, it helps a little with ROI in the long-term.


Looking at 2019 in isolation, it is noteworthy that despite not being a great year, BTC is up 91.69% from its start-of-year price ($3691.87 on Coinbase at 00:00 GMT on 1 January; measured to time of writing). Annual performance is a trivial and arbitrary figure, but the more traditional financial markets are fascinated by such numbers, so why not ask them how many of their assets can match that figure?

Far more importantly on this chart, we see the triple convergence point of three support lines: medium-term, semi-long-term and long-term. We are just passing the end of that convergence point right now!

An explanation of this convergence point can once again be found in the previous post, though we will cover it briefly on the next chart. The significance of passing this point is that BTC price movement should now turn positive.

Hark. Bit Brain has spoken.

“Turning positive” implies that BTC price will start to move towards the top of the six-month-old descending channel and eventually break through it. For what it’s worth, my charts place that breakout date in the second week of March 2020. Consider that date to be highly flexible, though it shouldn’t happen much later than that.


As I said above, this chart gives an idea of where the other two converging lines originate from (the third line of the convergence point being the base of the descending channel). This is why BTC is now crossing a triple-support threshold.

The “Long-term base trendline” is the most important of the three lines by a country mile. It is the only line that will carry and meaningful significance into 2020.

It is critical that BTC does not execute a definitive break through this trendline. At five years old, it has been Bitcoin’s reliable support level for half of BTC’s life, a situation which I deem unlikely to change soon. A small break below it (such as that of late 2015) is fine, but a big break would mean that all bets are off and that I need to go back to the analysis drawing board.

It is worth nothing that long-term BTC trends may curve slightly downwards as opposed to being straight like this trendline is. But beware of taking the majority of curved-line posts too seriously! I’m sure you’ve all seen the popular “stock-to-flow” charts circulating around; it’s a pity they are just very broad and largely useless “predictions” – much like a TA version of “psychic” readings or astrology. Perhaps I’ll write a post to debunk them sometime, or perhaps you can just read these two posts and figure the problem out for yourself: (in addition to the problem of the ridiculously wide channels they use – which still get breached.)

In fact, ENSURE you read those posts, since the economics behind halvings is still ridiculously misunderstood in the crypto space.


Passing the convergence zone today finally puts us back on the path towards higher prices. The mini bull run of May/June did us no favours – prematurely pushing the price of BTC high above the base trendline and causing it to fall for the remainder of the year. That fall should now finally come to an end, though is has already caused further damage (after that caused in 2018) to the altcoin market and its credibility.

I see this as a great time to buy: we are at the (probable) end of a descending channel, near the bottom of that channel and about to hit firm support and an upwards trend. The altcoin market lies in tatters, meaning that many literally unbeatable deals await the brave investor. Having spent a little money on large-cap alts recently, I think that I may be ready to chance a little on smaller cap coins now. The opportunity to buy into genuinely good crypto projects with a total market cap of $1 mil or less is too good to pass up on!

If anyone is going away soon and won’t be reading my blog for a while: I wish you a very Merry Christmas and a Happy New Year! Please travel safely and don’t do anything silly like drinking and driving. I did some of that in my younger days and it is nothing to be proud of – it’s just incredibly stupid and selfish. Be better than I was.

May Santa bring all of you big bags of cryptocurrencies!

Yours in crypto

Bit Brain

All charts made by Bit Brain with TradingView

“The secret to success: find out where people are going and get there first” 

~ Mark Twain

“Crypto does not require institutional investment to succeed; institutions require crypto investments to remain successful” 

~ Bit Brain

Bit Brain recommends:

Crypto Exchanges:

It’s a Good Day!

Today is a good day. I’m looking forward to its outcome.

My fight against governments is unending, a daily burden, but one which I undertake willingly.

I pride myself in fighting governments on every front that I possibly can: it doesn’t matter which level of government or even which country’s government I fight. As long as
I am making it hard for tyrants to be tyrants, then I am doing something right.

Today is a good day because, God willing, tonight I will get to confront a government official face to face. Tyrants being what they are, such opportunities are rare. “Democracy”
is only a word, a word which Representative Democracies have become the antithesis of.

I’m not naive, I know that I can’t change a politician. I can’t change a politician, but I may be able to help change politics! I will be in a room of influential people: voters, business elite, political party funders, and I fully intend to make best use of this opportunity to open their eyes.

The groundswell against politics in general is growing large, noticeable large – but that groundswell is generally confined to the lower levels. Richer citizens tend to ignore it,
they have more capacity to absorb tyranny – it doesn’t hurt them much and I doubt that they even notice it much of the time. Tonight I will do my best to enlighten the rich, and I will do this by backing the government
official into a corner, forcing them to expose their lies, greed and alternative agendas.

At least, I’ll make my best efforts to do so.

The rich have much to fear. While the average millionaire is not complicit in the day-to-day tyranny that representative democracies now are, WHEN the torches and pitchforks come out, there is no telling how far down they will go in their quest for vengeance and retribution. The average millionaires would thus do well to
enlighten themselves a little and to sympathise with the plight of those poorer then themselves. When business heavyweights start to pressure political parties and hold them accountable, that can have an immediate positive
effect on communities. No political party wants to deal with the bad press of a large company actively and publicly opposing them. If there is one thing a politician really despises, then it is the truth coming out of the
mouth of a well-known and crespected source.

And so the process continues: continually trying to open the eyes of those who have yet to see, or perhaps don’t want to see.

I’m tired of this fight, I’m really REALLY tired of it. It is a reality that I live 24/7/365, and one which I take seriously. The burden of constantly opposing corrupt governments is rather draining, because there is just so much damn evil to oppose!
I know that my many posts, blogs, emails, discussions etc often go completely ignored – but there is method to my madness.

I saw that earlier this week.

I tend to get a little shunned; not in the nasty “ostracised by the community” kind of way, but more in the “try to avoid him him, he’ll just berate you for voting
and tell you yet again why fiat money is evil” kind of way. People would rather not be around me, because “light conversation” with me tends to become rather heavy, and I won’t let them walk away without
the added burden of what they could be doing to help bring about change.


I’m right – and they know it.

There is a saying, something along the lines of “Nobody loves a warrior until the enemy is at the gate”. I am such a warrior, in more ways than one, and I wear that lack of love as a badge of pride.

And so it happens, that when the proverbial brown stuff hits the fan, suddenly I find myself to be popular again. That is what happened earlier this week.

Government (in my country) made such a large and obvious mess up, that the usually complacent sheep were temporarily jolted out of their rose-tinted slumber, and they took to social media
en masse to express their disapproval.

The words they used were heart-warming – because I saw them repeating words that I so often speak. You see, when you carry on and on and on until people are sick of you, something
you say sticks in their brains. Deep down they get the nagging feeling that all is not well. When circumstances eventually do become undeniably nasty, a little trigger fires in the back of their minds and they remember your

I have made the most of this opportunity. I did not to welcome the newly awakened with open arms, but rather to chastise them for their regular conduct and to warn them against doing so
again in the future. I’m driving the lesson home. Next time around it they will react quicker and with more conviction…

It doesn’t take a lot of people to oust a tyrannical system of government, but it does take more than we have available at the moment. The longer the sheep keep their heads down and
try to ignore issues, the longer we will all suffer.

It is with that in mind that I go with a smile on my face to tonight’s meeting. I know that the politician stands no chance against me. True, it’s only a big fish in a small
pond, but this particular pond is a relatively large and significant one – the ramifications of losing control of it could have a major ripple
effect for a certain political party and even for my country as a whole. So I will be giving it my all. Wishes of good luck and prayers (irrespective of faith or denomination) are most welcome.


Bitcoin is coming. I absolutely believe in the power of decentralised cryptocurrencies and the revolutionary disruptive effect that they are capable of having on international finance. I
absolutely believe that governments can be starved of funding and can be rendered obsolete by blockchains; both in a financial and in an administrative role.

But Bitcoin is going to take time. The upcoming global stock market crash is not going to automatically result in cryptocurrencies replacing fiat currencies overnight. Sure, it will give
crypto an enormous boost, but this is not the crash that will spell the end of fiat forever, it will only be the beginning of the end.

It is still up to us to fight wherever we can: to fight for what is right – not legal. To fight for true patriotism – not the words and symbols created by politicians. To fight for liberty
and free will, not disguised socialism and “democracies” that aren’t democratic.

The battle is hard and the end is nowhere in sight. But if you and I don’t fight it, who will?

Yours in crypto

Bit Brain

All charts made by Bit Brain with TradingView

“The secret to success: find out where people are going and get there first” 

~ Mark Twain

“Crypto does not require institutional investment to succeed; institutions require crypto investments to remain successful” 

~ Bit Brain

Bit Brain recommends:

Crypto Exchanges:

BrainMetric – IT’S STILL ALIVE!

Does anybody remember reading this?

No? Well I don’t blame you. It’s from THIS POST back on 5 August, so I hardly remember it myself!

In all seriousness, I didn’t forget about it, and I actually have been working on it (albeit at a rather low level) for the last four months. I want to reassure you
that I still fully intend to finish it, though it’s going to take much longer than expected. This is it’s story so far…

A Brief History of BrainMetric

As you can see above, I described my metric as being “a quantitative metric used to determine the investor confidence of the market”. That’s no longer an accurate description of it.

The more I worked on it, the more I realised what else I could do with it by expanding upon it. I’ll spare you the details of the equations, partly to protect my own intellectual property, but mostly
because equations tend to make people’s eyes glaze over!*[1]

I soon realised that my metric needed a benchmark. Finding a good benchmarks is trickier than it seems, because cryptocurrencies are anything but constant. They vary wildly in price compared to other
asset classes, as well as to one another. Even a single cryptocurrency tends to have high price volatility. I reasoned that the best benchmark to have would be an aggregate of the combined data of all of the cryptocurrencies
averaged over different time durations.

The trouble with that approach is that it is practically impossible to do. Wash trading wrecks it. Unlisted coins corrupt it. Delisted coin data are no longer readily available. Data anomalies (e.g. a
spike caused by a data capture error) have a big effect on it. Even in a best case scenario it will only ever provide you with an approximation. With so much data and so many potential points of failure, it becomes a bad idea.

Big Data vs Little Bit Brain

The death blow to the “all coins” approach is the sheer amount of data it requires. Assuming the other issues can be resolved, I would still have to import, capture and process practically
the entire historical database of a site such as CoinMarketCap or CoinGecko. CMC has got almost 4900 coins, CoinGecko (whose API I prefer to use) has over 6200! I’m working alone on this, and that amount of data is way
too much for me to handle! Put it this way: Bitcoin alone represents about 15000 rows of data, each row being several columns wide! In fact, all I’ve managed so far is to process Bitcoin data.

But that’s fine. During this process, I have been able to plan my next steps, and have also found value in BTC data on its own.

Analysis of BTC’s data processed through my most basic algorithm, reveals that it behaves much as as Bollinger Bands do (with similar predictive abilities). It is my hope that I will be able to
calibrate the figures into a form of meaningful “market tension” indicator, an advanced warning sign of when some big price move is about to happen. Take a look at what I mean, this is the most basic form of BrainMetric
data displayed in graphic form:

(Embarrassingly) Made by Bit Brain

Excuse the rudimentary charting, I originally made these strictly for developmental purposes, not for publishing! The aim of charting this was to determine how to use it as a benchmark. What you see
above is basically how BTC trading activity (of which volume is only a part) changes over time. It’s a few months old, but you can notice that the far right side is already very “squashed” – much like the
squeezing of Bollinger Bands. When I calibrate my data, this “squashing” will translate into a market tension; the more squashed it is and the longer it remains squashed, the higher the market tension figure will

Beyond BTC

I have decided that BTC will be my industry benchmark, it’s far easier working with one coin than with thousands! There is the option of using total market data, but this data is very hard to find
for the early years and tends to be inherently corrupted by aggregation, lack of data and coins constantly being added to it. As a constant, it is very poor. It’s also interesting to note that you can’t use something
like the “Top 10” coins, because while the names of those Top 10 may seem fairly constant, they change significantly over time. – making their data impossible for me to process.

I aim to be able to average my BrainMetic over time (in intervals of selectable duration for both macro and micro trends), and then compare it to the values of specific altcoins worked out using the same
method. This will work in much the same way as we currently use BTC/sats price to benchmark the performance of different altcoins. Only, unlike with sats price, with BrainMetric the algorithms will allow us to compare apples
with apples. You can’t say that e.g. DASH is better than TRX just because DASH has a higher sats price. But with BrainMetric you WILL be able to say that one is better than the other, since price will not be a primary

“Better” is not the correct word, I think “less overbought” would be a more accurate description. BrainMetric will be similar to my 4 November post: “Perspective on Altcoins”, in which I used a pseudo-neutral metric (percentage drop from All Time High) to compare altcoins to one another. (Note: BrainMetric equations will not use ATH.)

Joining the Dots

At the end of the day I have a vision of what I want from BrainMetric, I want something that will show:

· The “Market Tension” of BTC – and maybe selected altcoins too.

· … possibly graphically.

· A fair comparison between various altcoins to show which are undervalued and which are overvalued.

· The later incorporation of an additional metric which I have yet to develop.

BrainMetric will probably take the form of some sort of dashboard with a simple interface that hides all the background number crunching.

Yes, as the last bullet point states, there is a second metric in the pipeline. My brain laid yet another original idea egg that will tie in very nicely with my BrainMetric
vision. So “BrainMetric” will probably become “BrainMetrics” as the second metric literally gets added into the equation. IF I can get it calibrated and start getting good predictive data from it, then the addition of the second metric will:

· Further help to determine “Market Tension” (i.e. how likely the next big jump will be), and

· (importantly) give percentage probabilities as to which direction that big jump will be in.

The second metric will operate on the principle of a rudimentary Kalman filter, calculating future jumps based on the frequency, sizes and directions of previous jumps. At this stage the second metric
exists solely in my head, I haven’t had a chance to even start looking at the equation for it.

Making things happen

After deciding last year that Microsoft has got enough money, I stopped using Excel for my crypto-tracking spreadsheets. After trialling several free alternatives, I settled on the excellent FreeOffice suite for my day-to-day needs. (Visit www.freeoffice.com to check it out for yourself, MS Office users should feel right at home. This post was originally created in FreeOffice.)

Figuring that learning how to import APIs/scrape webpage info into FreeOffice spreadsheets might not be so fun (it can be bad enough in Excel), I decided to switch to the web-based Google Sheets for
my crypto spreadsheet needs. I figured that Google may have better internet data integration tools. That was only partially true, and subsequently took a large step backwards when the most popular crypto plugin ceased working.
But I pushed on and have become moderately competent at getting Google Sheets to work for me.

Level 5+ Excel Grand Wizards will know that with enough time and practise, you can make Excel do just about ANYTHING! It may look similar to its siblings Word and Powerpoint (and the other younger ones that few people use), but under the hood, Excel is a V8-powered, fire-breathing beast! Still used to the formidable capabilities of this beast, I built BrainMetric in Google Sheets.

..and that’s why I’m taking so long to do this.

After much struggling, I realised that it just wasn’t going to work. Using Sheets I simply did not have the tools I needed to effectively process all that data. I don’t blame Google: Sheets
is a very capable web app which can do most things, but it just isn’t Excel which can do absolutely anything!

Knowing what I would have to do, I tried the old “ignore the problem and hope it goes away” trick. It didn’t. Eventually I confronted my demons and dusted off some long-neglected bookmarks in my browser. I started the painful process of re-teaching myself computer programming.

Unfortunately programming is not like riding a bike, it’s a perishable skill – one which I learnt at university two decades ago! Modern programming languages evolve constantly: the little which
I do remember is horribly out of date. It’s like semi-remembering the home phone numbers of people you knew 20 years ago: you dial a few, half of them are wrong, and the other half no longer work anymore. The language
Java is now on version 13. I learnt version 1. An early edition of version 1!

Worse still, I have to fight my way through the badly outdated Java documentation – the hallmark of massive open-source software projects. Since I want to use a specific type of user interface creator
(JavaFX), Java 13 is actually not really suitable for my purposes. Java 11 sort of is. Java 8 is. Don’t ask about the in-between version, just don’t. It’s probably only after
Java 14 is released in Q2 of 2020 that things will work properly again (after some work by the community). If only I’d know that at the beginning, I would have saved days, days which I wasted trying to correctly configure the programming environment of my PC.

Now that everything is running semi- properly, as much as I want to jump straight into coding BrainMetric, I need to first practise the fundamentals and make stupid mistakes as part of the re-learning
process. Yesterday I started writing a very basic word processor program. Once I can get that finished, then I should be about 70% of the way there and will just need to work on charting and data management skills. That and
Christmas madness should take me well into early 2020.

So BrainMetric is coming, but I wouldn’t start holding my breath just yet!

For now, what I can tell you is that the prototype charts show a very squashed BTC profile. Something is going to happen soon.

*[1] Stephen Hawking said that when he was writing “A Brief History of Time”, he was advised that each equation in the book would halve his sales. He took the advice to heart and included only “E=mc2”, acknowledging that leaving it out may have doubled the sales of his wildly successful bestseller.

Yours in crypto

Bit Brain

“The secret to success: find out where people are going and get there first” 

~ Mark Twain

“Crypto does not require institutional investment to succeed; institutions require crypto investments to remain successful” 

~ Bit Brain

Bit Brain recommends:

Crypto Exchanges: