Bitcoin: The Golden Ratio Multiplier

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Indicator Overview

The Golden Ratio Multiplier is a Bitcoin chart that explores Bitcoin's adoption curve and market cycles to understand how price may behave on medium to long-term time frames.

To do this, it uses multiples of the 350-day moving average (350DMA) of Bitcoin's price to identify areas of potential resistance to price movements. Note: multiples are of the 350DMA's price values rather than its number of days.

The multiples reference the Golden Ratio (1.6) and the Fibonacci sequence (0, 1, 1, 2, 3, 5, 8, 13, 21). These are important mathematical numbers.

These specific multiplications of the 350DMA have been very effective over time at picking out intracycle highs for Bitcoin price and also the major market cycle highs.

As Bitcoin becomes adopted over time, its market cycle highs hit decreasing Fibonacci sequence multiples of the 350DMA. This is because Bitcoin's explosive growth on a logarithmic scale is slowing over time. As its market cap increases, it becomes harder for the same log-scale growth rates to continue.

This indicator was created in April 2019. At that point, the BTC price had worked through the Fibonacci numbers from x21 to x5. The indicator then continued to work after that time, all the way to completion from the x5, to the x3, x2, and x1.6 multiples. Each Fibonacci multiple marked a significant resistance for BTC each time BTC price reached it. This was a remarkable achievement and shows how Bitcoin in its adoption phase followed the mathematical sequence of Fibonacci.

The Golden Ratio Multiplier was an effective tool because it was able to demonstrate when the market was likely overstretched within the context of Bitcoin's adoption curve growth and market cycles.

For more information on the indicator see the link below.

Will It Work Beyond Adoption?

This indicator, along with the Pi Cycle Top indicator, was designed to work in Bitcoin’s early adoption phase before it reached mainstream status. That adoption phase can be seen in the price chart as a broad arc of price growth over time on a logarithmic scale. Having tapped all the required fib level multiples, the indicator completed its task. Interestingly, this adoption phase spanned from $0 to $100,000. It is therefore our view that Bitcoin has completed its adoption growth according to this indicator, and a new growth phase will begin.

Bitcoin Price Prediction Using This Tool

The x5, x3, x2, x1.6 fib levels forecasted where there may be major resistance for Bitcoin price when it reached them. They did indeed prove to be a handy Bitcoin price prediction tool and indicator of where the smart investor chose to manage their risk.

Created By

Philip Swift

Date Created

April 2019

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The Golden Ratio Multiplier Medium Article

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The Golden Ratio Multiplier was built alongside the Pi Cycle Top Indicator which uses a similar methodology. .