For those who willingly or unwillingly found themselves in the cryptocurrency world in December 2017 or January 2018, purchase bags of bitcoins to see what is happening now is very painful. This week the price of Bitcoin for the first time broke the support level around 3800 dollars per coin and rushed below to the area 3000. Boring bearish year for which the capitalization of the cryptocurrency market gradually “lose weight” seems to be approaching its logical end. But how will this end? Let’s face it.
First of all, it should be noted that the overall macroeconomic environment, and the overall economy do not look very impressive now. Microsoft overtook Apple in market capitalization, the stock market all red, oil again goes to the district of $ 58 per barrel, increasing VAT, and hyperinflation of currency in Venezuela shows some astronomical numbers.
“Buy when the streets are flowing blood even if the blood is your own”, once said Warren Buffett. And was absolutely right. Only now buy not.
Bitcoin discount. The bubble burst?
To understand what is happening in the cryptocurrency market, let’s first look at the overall picture. Before you graph the rise and fall of Bitcoin (BTC). On a linear scale, it may seem that he is now at the bottom. But on a logarithmic chart, we see that it is much more expensive now than at the beginning of last year or the year before. Every rise is followed by fall, and it is inevitable that perpetual growth does not exist. The market is cyclical, volatile and subject to sentiment, that is the mood of buyers and sellers. If the winning bulls — the price increases, coin buying, if you win bears — to sell and to buy cheaper at the bottom. In that bitcoins are really the right people, no doubt worth it — the capitalization of BTC is still an impressive $ 66 billion, and the coin in search of their true prices. Search this can take years.
Let’s consider some points that affect the value of the bitcoin:
- Bitcoin is the first and oldest crypto-currency. For the first nine years of existence, the Bitcoin Protocol, there was not one serious vulnerability and the system itself, thanks to the underlying technology of the blockchain, reliable and no cracking. If you do not believe or do not know, you better learn what a blockchain is a cool thing.
- In circulation will never exceed 21 000 000 bitcoins. If all the world’s dollar millionaires wanted to buy at least one bitcoin, coins would not be enough at all. The probability that in the future the coins will be a fight (in fact it already is), and it affects the growth rates. The price is determined by demand.
- Cryptocurrency market have a huge space for growth. The condition of the people from the Forbes list of billionaires is greater than the market capitalization of bitcoin. Only one Apple is worth more than 10 times than all the bitcoins, if you start from capitalization.
- Bitcoin, at its core, is still poorly developed and not very common technology. You can compare the appearance of cryptocurrencies with the first beginnings of TCP/IP. All use is, but nobody knows what it is.
- The lack of regulators and the peculiar “freedom” leads to the fact that price can fluctuate dramatically. Yes, from 3,800 to $ 20,000 could be called such fluctuations. While Bitcoin showed the stability almost to the level of stock throughout 2018.
- The lack of regulators, it also means the almost complete absence of large investors. And large investors have so much money that if they wanted to buy the whole cue ball, his price would be somewhere on the moon.
What happened with bitcoin?
As we have seen, if everybody starts to sell, formed a chain reaction. If the chain reaction gets out of control, the bubble collapses. But in the case of bitcoin and the bubble-a no no — the coin still has value and considerable, and will have her for a very long time until fall to zero. Only here to present the fall even to 20, 100 or 500 dollars is very difficult — at every support level when moving down to meet more and more people want to buy coins. Because in order to sell more expensive, need to buy cheaper and not Vice versa.
The current drop in Bitcoin was preceded by two main agenda: a protracted, unpleasant, boring, flat, red, a bearish year, and the war between the SV BCH BCH and ABC. The fact that BTC is an enemy is separated coin BCH, created based on the same blockchain and BTC. At all desire I will not be able to briefly and clearly tell how they differ and what is the fork, but you will be able to find yourself on 2bitcoins.ru if you want to. In November, BCH community was split and the coin is also divided. From the main nucleus separated branch of the supporters of Craig Wright, who tried to impersonate the real Satoshi Nakamoto — the inventor of Bitcoin, who mysteriously disappeared.
But if Craig Wright real Satoshi, he must have a lot of bitcoins. And if he gave threats in the style of “after us the deluge” in the action by sliding at least a fraction of its reserves, the market would have simply collapsed. This fear also played a role.
Also, amid falling Bitcoin has postponed the launch of a major platform for cryptocurrency trading Bakkt, which could pave the world of crypt of the road for very large investors. The platform is promised to start in January, and had in November and December. To understand the extent of inequality of the cryptocurrency world and the stock market, think about it: the capitalization of the entire crypt is about $ 130 billion, and the value of all the shares in the world — 70 trillion. The value of the derivatives no one even cannot be estimated, but it should be around 630 trillion to 1.2 quadrillion dollars. Next to these numbers, the price of bitcoin don’t even looks solid.
Nobody knows. Because if someone knew how the market will behave in the next second, minute, hour, or year, he would have become a billionaire. Some are lucky, some people try to use technical analysis for trading.
The increase is bitcoin? Of course, will grow, at least to adjust the current decline and return to the previous all time highest, that is, a record price. When this happens is unknown.
Fall is bitcoin? It may be because the correction continues its period of growth and sell to those who bought at 1000, 2000 or 3000 dollars. In the end, they’re in the black in a large.
The price of bitcoin discount on black Friday. Remember how crazy people when they saw the rapid growth of the coin from 3,000 to 10,000 dollars, and tried to catch by jumping into the train to the moon. This is a great opportunity to buy cheaper, but there is a recommendation not to try to catch a falling knife (on the chart), and enter in beginning an uptrend, and that is to wait for at least some thaw in the carnage.
In any case, don’t take my words as financial advice, I’m just a humble Explorer technologies present and future. Conduct your own research, especially when it comes to investments, and in any case do not spend the last and do not take loans.
What will you do?
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