Benjamin Cowen explains a technical indicator that measures Bitcoin's daily price change normalized against a power law decay pattern. The yellow and blue line in the lower panel shows this local slope, revealing whether price moves align with or deviate from Bitcoin's historical growth trajectory.
This yellow blue line where several things lower panel. This is one of the newest indicators that I have is based on this idea of taking the returns, right? So it is basically the ratio between the price today and the price yesterday. So it's a percentage change in the price. Then we normalize it by taking into account the decay due to the power law, the decay in the returns from the power law. And what we get is basically, if you go through the mat, it's the local slope of a power law.
