The Simple Science Behind the P2T Model and How Bitcoin Will Top Around ~$283k (3rd Halving Cycle)
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The P2T Model was first discussed publicly on the 3rd January 2021, on Tone Vays YouTube channel, just a few days after I considered it was ready for the public eyes. The 3rd January is the 12th anniversary of Bitcoin! I thought this would be a nice opportunity to pay my respects to the Financial (R)Evolution!
I’ve been in the space since roughly 2015/2016 when I first heard stories about bitcoin. Please note when I write Bitcoin (capital B) I mean the protocol, and when I write bitcoin (small cap b) I mean the crypto coin. It took me one year until I finally realised what Bitcoin and bitcoin were. So, I bought my first bitcoin in 2017, much before the ATH (All Time High) of December that year.
In December 2017 and January 2018 I also bought some altcoins (these days I call them shitcoins) but with time and experience I came to realize I was a bitcoin maximalist and, finally in 2019, I started to unload my shitcoin bags and call myself a bitcoin standard bearer! (very much because of Ugly Old Goat’s article titled: “Why I Am No Longer a Maximalist…”).
The Cycles / Halvenings
bitcoins are issued by the Bitcoin network every time a block is mined (a block is mined every ~10 minutes). Roughly, every 4 years the reward for mining a block is cut in half. These 4 year cycles are called Halvenings. The first halvening happened on the 28th November 2012, the second on the 9th July 2016 and the third on the 11th May 2020. With every halvening it’s easy to understand half the bitcoins enter the network thus making bitcoin a deflationary currency whose price is driven by scarcity. Scarcity is one of the most important factors when considering bitcoin price valuation because, for the first time in the history of Humanity, a currency is capped at 21.000.000 issued coins and no person, central bank or nation-state can change that!
With every halvening the price of bitcoins fluctuates, going up after the halvening (bull market) and, later on before the next halvening, going down (bear market). However, because bitcoins are deflationary and scarce, as time goes by the average price always increases roughly 200% every year!
The Simple Science
Step 1 — Start with a simple 1 Week (1W) candles BLX (BraveNewCoin Liquid Index For bitcoin) chart on TradingView.
Step 2 — On this chart, draw a vertical line for each halvening matching exactly the weekly candle when the halvening happened.
Step 3 — From the 1st halvening vertical line, count the number of candles (weeks) to the lowest price candle before that halvening. Draw a rectangle from that lowest price point to the highest price point of the candle that matches exactly the halvening line (check image below — yellow circle).
Step 4 — Draw a new rectangle, starting from the top right corner of the previous rectangle and give it exactly the same width (number of candles) as the previous rectangle. Stretch it up until you cross the top side with the price top of 2013 (check image below).
Step 5 — Draw an exponential curve line starting from the lower left corner of the first rectangle to the upper right corner of the second rectangle. Adjust its middle point to intersect the halvening line exactly where the two rectangles touch their corners (check image bellow). This curve line is supposed to indicate the maximum exponentiality of the price rise. Expect relevant corrections if the price crosses over to the upper side of the line. A good example is the 75% correction after the 1st halvening when the price crossed the curve line before reaching the 2013's top.
Step 6 — Do exactly the same process on the next two halvenings.
Step 7 — To find the post 3rd halvening price top draw a dashed line that touches the previous two price tops. When this line intersects your 6th rectangle’s top right corner, that’s your price top and price top date (check image bellow — finalised P2T Model).
P2T Announced Live on Tone’s YouTube Channel
I hope you all enjoyed the science behind the P2T Model and, if you want to access a real time chart of the model, use the link bellow: