Costa and Marcos from Monitor Trading Systems analyze Bitcoin using power law indicators and technical models. They discuss market cycles and price predictions based on their analytical framework, examining where Bitcoin stands in its current trajectory.
Hi, everybody. This is Bitcoin live. Today is August 7, 2025. I'm here with Costa and Marcos from Monitor Trading Systems. So these are our usual show where we go a little bit. You know, we dive in, in the bitcoin action, we look at different type of indicators basically based on the power law. And also we look at both global liquidity and local liquidity. So let's start with the power law indicators. Let me update my chart and upload it. Just give me a second. So we had a quite a bit of action today, right? Yeah. Oh, yeah. Moving day. Yeah. Nice to see if we're going a final sweep down or if we're just going to keep going up. Yeah. So, okay, so let me give you an overview. Okay, so like always, you can look at some of our previous episodes. We were introduced this, this model, you know, this is a typical power law where basically we are. We recognize relationship between the time and the price. That is basically a simple formula, right? We are saying that the price is proportional to time and a power of time about. So I'm a number close to six. So this is a white line that you're six. And the gray line is one of the things that is very fundamental to our entire enterprise because we are having a trading system that uses this support line, we call it, where basically it can be calculated in many different way. Probably the simplest way is saying that it's about 60% away from. From the power law, from the white line. And you can see how this line has caught all the major bottoms that we have. In particular, even during COVID here. This is Covid, we arrive here and then we bounce back. So it's a point of reference because historically we never crossed that line. And so it's very good to have any type of asset that follows precise rules like these. And. And also we have this upper orange line that is the K channel. So basically, you know, still follows the power law. But in addition, we are adding a decay that is exponential from the peaks. And this is. And you can see if you do that all the major tops are linked together. So these are our point of reference that we have to understand the price. Now I added also these oscillations that are periodic oscillations about four years. This is all what it is. The way we can synchronize these peaks is simply by choosing a particular shift that includes the first oscillation and then all the other are included automatically. Now if you extend this idea to the current cycle, you get this bubble here. So I I explained this so many times. But because this comes out again and again, I want to say one more time. The blue model is not part of a power law model or at least is a. You can think of it as a secondary element, right? It's something that we add on. We say look really the general behavior is this long term trajectory. There are deviations from this trajectory, but in average they kind of cancel. But if you want to go deeper now we can look at how these deviations are characterized. And you can do it using the power law. Because you subtract the power law and then whatever is left over, you can fit it and you can describe it and. And characterize these oscillation in terms of a deviation from the power law is the best way. Everybody, you know, almost all the other indicator that you find out there, even the on chain ones are actually possible because these things exist, people don't recognize them. I'm going to write eventually an article Bitcoin because as these regularities then shows as regularities in other indicator that people say are not related to the power law. But they are absolutely they are. So the best way to describe it deviation is using the power law as your reference. And then you subtract the power law and then you describe it and you see regularities. One of these is exactly what I explained before that we have this support line. Another one is that there are very precise deviations upwards from the power law. They have all, you know, very precise characteristics. Until let's say until now these particular cycle. If it followed the others, it should behave like this, like the blue line. It doesn't. So this is not a failure of. Of a power law model. Because the power law model if anything is becoming stronger and stronger. Because anytime that we actually deviated that was a challenge to the power law, right? And, and the. And it works over a long period of time. Simply because as we deviated up then we started to go down and correct and in average turns out we still follow the power law. But what is happening right now? The story that this seems to unfold is not finished because we will have to look at at the end of a cycle, right when we arrive to the peak. Because my way of describing the cycle is peak to peak. It's convention. You can use anywhere. Some people use Alf, the Alving, etc I like to think top to top. If you look top to top right, we are still few months ahead of us. But we're getting small. You know, this time is became smaller and smaller. So it's still possible to have like a huge big spike and reach that 200k now, you know, there are people like this gym guide, you know, Jim the prophet, that says 444k within 2025. I say it's becoming more and more unlikely that to reach 200k, 400k. 200k is still possible, but 400k, it's not impossible. But you know, bitcoin will have to do something really amazing. 400k is all the way here. If I show you these in a linear graph, you can see how very unlikely that value is. It looks like it's very, very far away now from what we are observing. So basically we started to go inside this bubble from, in this red region. Right. So I started in July, sorry, in November. And I even predicted that that was exactly like everything else. You see, it really did what he was supposed to do. We started the bull market in around November and we stay there for all this time. And you know, these are actually November series. When we started to go, we start to leave a power law and we start to follow this bending curve in November. This, this is when this happened. And then we cross the power law. We stay above the power law for a while. But you know, here in this region then we had a correction. So this is story. I, I, I see people still being confused about this. Yes, this is a model that we will have followed. If everything happened like in, in the previous cycle, it's not happening. What is happening is even if we wanted to leave a power law initially, we then got corrected, we attempted again, and now we are simply fluctuating around the power law. We added this push upwards that looks very much, you know, very similar to one that we're experiencing now. Then the price stabilized it, we corrected, we went where, look at this exactly to the power low back and, and now we are leaving again. I don't know what is going to happen next. We can analyze it, but to me it seems that there is some stubbornness from, you know, from Bitcoin to actually follow almost to a letter the bitcoin power law itself. That is incredible. You know, like, I don't know how to interpret it because usually we do need this kind of almost like release valves, right? Release valves to, you know, to have some kind of bullish behavior and then a correction. And we are not seeing that this cycle. So, you know, this is my analysis of a situation and I wanted to again verify one more time, but it is not like a prediction that I am attached to. I'm simply saying that if everything happened like in the past in terms of.
