How it works

BitcoinWeather translates historical daily closing prices into a clear, weather-style outlook.

Inputs & Core Idea

Our algorithm uses a 46-day lookback window with a linearly decaying weight. This means that newer price action has a much higher impact on the forecast than data from a month ago.

\( \displaystyle c_{t+m} \;=\; c_t \cdot \exp\!\left( \frac{\sum_{i=1}^{46}\; \ln\!\Big(1+\frac{c_{t-i}-c_{t-i-m}}{c_{t-i-m}}\Big)\cdot(46-i)}{\sum_{i=1}^{46} i} \right) \)

\(c\) = closing price \(t\) = current day \(m\) = horizon (days) \(i\) = counter (1…46)

Step-by-Step Logic

1. Log Returns: We convert daily price changes into log returns so that they can be added cleanly over time.

2. Weighting: We aggregate these returns using a weight of (46 - i). Day 1 has a weight of 45, while Day 45 has almost no influence.

3. Projection: The final result is transformed back from a logarithmic scale into a readable USD price level.

The Weather Metaphor

☀️ Sunny: The weighted trend is positive. The "market climate" suggests upward momentum.

🌧️ Rainy: The algorithm detects a downward momentum. Clouds are gathering in the price action.