261 sats \ 3 replies \ @k00b 21 Sep 2023 \ parent \ on: UTXO.live - The daily price of bitcoin has a clear on-chain signal bitcoin
It's kind of like fee estimation. Even if you develop an estimation model that works really well, it'll stop working when everyone uses that model.
LOL. This ^^
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Actually, I misunderstood. This doesn't try to predict the future at all. It just allows you to pretty accurately determine a given day's USD price (assuming the day is within their specified range).
I don't fully grok it, but most of the magic is in a historical "stencil" in the shape of a bell curve that matches output patterns to price points. It then lines up this stencil with a bell curve of the output patterns on a given day and voila.
What's cool about this is that if you need historical price data you can use this to deduce the price rather than rely on some external source. I guess it could break if onchain behavior for a day is anomalous and not accounted for by the model?
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Oh, thanks for explaining this. That is useful and cool.
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