Bitcoin’s recent price surge and its sudden correction were the center of speculation and many conspiracy theories. Some of these theories speculated that institutional buyers set long trades before the pump and that the correction that followed the pump was sparked by WikiLeaks’ Julian Assange, who sold 4,000 BTCs worth approximately $20 million. The above-mentioned theories do not have any credibility to them however, and the only things that do are Bitcoin’s technicals and the past data that is observable and quantifiable.
The previous article about Bitcoin’s price movement addressed how Bitcoin will pump briefly and then go into a correction wave within 48 hours, which it did. This article details the movement of Bitcoin in the coming days and when it will bottom.
The Fractal Truth
The recent surge was a fluke and not the beginning of a bull rally, which is quite contrary to what most of the community thinks. The reason for this contrarian belief is the fractal nature of Bitcoin and the past data of other ‘bubbles’ that have occurred. Bitcoin is not the first bubble and it definitely won’t be the last. A few examples of other markets that have shown similar behavior as Bitcoin include the Gold market during the late 1970s and early 1980s, the Dot-com bubble, Qualcomm stocks, etc.
The charts attached below show the uncanny similarity between Bitcoin’s price movement and other markets.
Gold Vs. Bitcoin
Qualcomm Stock Vs. Bitcoin
Although the time frames across these markets are varied, they represent the same pattern. Kazonomics aptly explains this in “The Fractal Truth of Markets.” The article states,
“A crash cycle pattern is a fractal pattern found in both humans & nature. In humans this emotional cycle has been observed since the days of tulip mania and all the way up to the internet bubble or dot com era most famously. Price is nothing more than consensus behavior of human emotions over time.”
Bitcoin’s Bottom and the Dot-Com Bubble
The most accurate resemblance to Bitcoin’s cycle can be seen in the Dot-Com bubble. More insights on Bitcoin’s bottom can be extrapolated by looking at the Dot-Com bubble and its crash in 2002.
As seen in the chart, the Dot-Com bubble reached its peak in March 2000, after which stocks crashed in a step-by-step procedure from 1 to 10. The fall from 9 to 10 was peculiar since it was a 5-fold fall.
Likewise, Bitcoin has been crashing in the same pattern. Since it hit its peak in December 2017, it has completed 9 steps out of 10, and is yet to reach the 10th step, which will be determining Bitcoin’s bottom. The price of Bitcoin from 9 shows that it has completed 4 folds and that the 5th step is yet to unfold. Assuming that Bitcoin will follow the same pattern that Dot-Com did in 2002, Bitcoin’s next move will pull its prices lower than previously anticipated.
Where is the bottom?
The Dot-Com bubble followed an A-B-C trend before it reached its peak, which can also be observed in Bitcoin. The A point acted as a support to the Dot-Com bubble, propelling it to new heights. Assuming the same with Bitcoin, the A point for Bitcoin is between the $2,000 to $1,800 range. This could be Bitcoin’s bottom, the bottom many prominent people in the community have predicted before.
Tyler Jenks, President of Lucid Investments tweeted an interesting thought about Bitcoin and its new lows,
I have not commented on Bitcoin since we broke up through the $4,000-4,200 resistance zone. I believe we are headed back down to that zone and it will not hold. New lows coming. Target of $1,000 unchanged.
— Tyler Jenks (@LucidInvestment) April 11, 2019
On the contrary, people like Tom Lee and others have opined that Bitcoin has already bottomed. Only time will tell if Bitcoin has actually bottomed and whether the recent surge in prices was the start of a bull rally.
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Brad Garlinghouse on Facebook’s Libra, CZ on Binance U.S and more
Crypto News – 19 June – Brad Garlinghouse on Facebook’s Libra, CZ on Binance U.S and more
— AMBCrypto (@CryptoAmb) June 19, 2019
Crypto News – 19 June
Bancor follows Binance, Bittrex’s footsteps: Decentralized trading platform, Bancor, recently announced in a blog post that citizens of the United States will no longer be able to use the Bancor application to convert tokens
Read more at https://bit.ly/2N75NFE
Jameson Lopp on Libra: Lopp speculates that it “sounds an awful lot like Proof of Stake” and like Ethereum, it will face the same problems
Read more at https://bit.ly/2IU3AIq
Crypto-news website sued: Photographer John Curtis Rice has filed a lawsuit against Cointelegraph, a popular cryptocurrency news website, for allegedly using a copyrighted photograph of Charlie Shrem
Read more at https://bit.ly/2MXBlhv
Delaware approves Bittrex’s Money Transmitter license: Bittrex, a leading cryptocurrency exchange in the United States, recently announced that Delaware had become the 42nd state in the United States to give it a money transmitter license
Read more at https://bit.ly/2Kt34nR
LongHash on Tether’s health: A recent LongHash report has claimed that despite controversies, Tether is ‘extremely healthy,’ scoring a health score of 90 on 100
Read more at https://bit.ly/2MXFrpO
Binance’s BTCB proposal: CEO CZ confirmed that a proposal to list BTCB on Binance DEX had been submitted
Read more at https://bit.ly/2IoMLpY
Nouriel Roubini on Bitcoin: Prominent Bitcoin basher Roubini cited British MP Alex Sobel’s article on cryptocurrencies to attack BTC again, calling it a ‘scam’
Read more at https://bit.ly/2N4xW02
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