Did Bitcoin Just Bubble?
The short answer is yes, and I will show you exactly how and why.
Many people in the crypto space right now are asking themselves the same question. "Is Bitcoin a bubble?" and the real answer is YES and NO. The statistics and math show that Bitcoin prices have entered bubble territory and were way above expected ranges. The fundamentals suggest that prices way above what we have already seen are definitely possible.
First let us define what a bubble is, according to Investopedia.com:
"A bubble is an economic cycle characterized by rapid escalation of asset prices followed by a contraction. It is created by a surge in asset prices unwarranted by the fundamentals of the asset and driven by exuberant market behavior. When no more investors are willing to buy at the elevated price, a massive selloff occurs, causing the bubble to deflate."
Here are the common phases of a typical bubble
And this is what Bitcoin's chart looks like right now using a 3-day interval for bars:
Now the two pictures overlaid:
Do you see the resemblance? Increased media attention, greed and irrational exuberance has lead the market to unimaginable highs- which ultimately proved to be unsustainable. Regulation, profit taking and market manipulation have finally popped the bubble and the market seems to be in a freefall.
It appears that we are in the "capitulation" phase right now leading into the "despair" zone.
Now here are the Bitcoin charts with Bollinger Bands so we can see some ranges and averages:
Now the big question is where will we bottom out?
Depending on how you look at it the "return to mean" phase could be anywhere from $10,000 to $14,000, if we have in fact hit the bottom. Other charts and indicators suggest that we could see prices fall as low as $6-7K again before finding the much needed support.
One thing I know for sure is that just when you think it's over something else suddenly happens. I truly believe in the fundamentals behind this new technology and know that it will revolutionize the world. There will undoubtedly be many speedbumps during the way so be prepared. I'm along for the ride no matter what comes our way :-)
We will continue to see many more of these "bubble" cycles over Bitcoin's lifetime, each greater than the last.
Check Out My Last Bitcoin Post:
https://steemit.com/bitcoin/@hotsauceislethal/bitcoin-price-forecast-2-1-2018
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https://steemit.com/bitcoin/@hotsauceislethal/how-to-conquer-fomo-fear-of-missing-out
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https://steemit.com/bitcoin/@hotsauceislethal/bitcoin-s-hype-cycle-is-finally-here
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https://steemit.com/cryptocurrency/@avii/mind-over-money-documentary
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Need A Good Laugh?
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Why STEEM Is Going To Be A Powerhouse In 2018
https://steemit.com/steemit/@hotsauceislethal/steem-is-the-most-used-blockchain-in-the-world-still-highly-undervalued-and-underrated
*Never invest more than you are willing to lose and always do your own research before making any investment decisions.
(All pictures are free domain images from snappygoat.com or created by myself.)
Great post, I tried to warn people this would happen and they said I was spreading fud. Now they are stuck hodling bags because they bought BTC and altcoins at the ath. I tell them to stay positive and you only lose when you sell. If you're at a major loss and don't want to cut your losses just hodl no mater how long it takes until you get what you invested back. Perhaps by then its a good time to keep hodling to gain profits.
Look at what happened in 2013 leading into 2014. We saw a two year bear market that dropped the price of BTC from over $1,200 to under $200. Since then the price has gone 100X so we could see prices drop even further before the despair finally subsides.
Yes, finally a realistic worldview on crypto markets instead of blaming every drop on some news somewhere. Though I'm not sure it will go back below the mean judging from all the other mini-bubbles, but you never know.
Bitcoin may be the future, but does it warrant a 20X growth in a single year? Perhaps not... but the price is entirely dictated by the utility and the psychological value.
Just as i told you when we first met and you told me about bitcoin. Crypto will change the world and put the power back in the people’s hands!!!!
Everybody wants my Bitcoins!
LOL I'm sure there are plenty of dudes out there that would love to HODL those Bitcoins!
yes they do! lol
The people got a little too powerful (and overexcited)- now the man is trying to keep us down man :-D
I do see this as an assault from the powers at be. Its funny cause on MSM ive been seeing positive post about cyrpto. LIke a crypto cheat sheet on multiple websites. Im like i heard this before!! Mainly because my room mate is a crypto genius and tells me stuff that you usually see in the news 3 months later!!!!!
Thanks for sharing this informative article. I think this is a health correction....yes, anyone's guess as to where it might find resistance but in the long run this is good for the crypto world. Maybe creating some buying opportunities in the sector as a whole???
Can't buy the dip if there isn't a dip :-D
Well written article ! I like how you have ovarlaid the two pictures. I think 6-7000$ level are very reasonable to be seen in the next week. A great opportunity for people with cash set aside.
I think it's important to be realistic and rational here. There is too much denial right now :-D
Absolutely. I've been reading buy the dip since 17,000k. I am glad I have a head on my shoulders, so I can do my own thinking :D
If it was not a bubble, it did neven do X10. For some real and huge company (for example Apple) 10X is unreal in a year. Companies do not grow so fast, even very successful. "Something behind the stocks" can be considered as a barrier. Bitcoin has nothing behind that and... Sky is the limit!
The beauty of Bitcoin is the price is entirely dependent on psychological factors. The value is entirely based on what someone THINKS it should be worth. That makes Bitcoin PRICELESS.
The comparison of the two charts is crazy! The BTC chart and the Bubble chart match up almost perfectly. Does that mean that BTC is going to fall down even more? I guess time will tell
Some will sure take the benefit from the situation while some will oanic and get rid of their holdings!
It sure is a volatile market but as it seems BTC will eventually rise and the history says it all !
We just have to wait & watch !
Every 10% down i am getting some more :-)
Good find. Well said. A lot of people think of a bubble as something that pops. I prefer to consider these pullbacks as corrections. Long term growth will be determined by a number of factors; supply, demand, speculation, purpose etc.. I don't see this "bubble" popping. Buy the dips and HODL
