A fundamental look at Bitcoin

November 15, 2018

A similar situation and a similar fall in the market can be found on the chart for 08/18/2015, after which the price began to gradually increase and move higher. You can see the same impulsive failure of RSI and the similarity of price movement to this. As now, in 2015 we see impulsive growth, after which a prolonged correctional decline followed and ended with a similar discharge. If we draw parallels between these situations, it is clear that the wave of growth after a drawdown on August 18, 2015 lasted about two months, after which we see a correction in the form of a dump of half growth and then another upward movement. Regarding the current situation and the scale of the market, the formation of such growth can now occur much faster, perhaps about one month instead of two months. Similar patterns of price movement can be seen in many large well-known assets, not only in the world of cryptocurrency. As for Bitcoin specifically, we have previously published similar situations and examples of market movement. It is worth noting that the fall in 2015 occurred immediately before the fork of Bitcoin.

The change in the psychology of the crowd is also visible: as soon as the cryptocurrency and Bitcoin boom began, during its abnormal growth, most of the information motivated to buy the asset, analysts promised the cosmic value of BTC, there was a huge campaign to buy from all sides … After that plum on twenty thousand and we watched a protracted downtrend. Now the situation is beginning to take shape exactly the opposite: more and more you can face negative and skeptical opinions, titles like “Bitcoin is dead …” and so on. The interest of the crowd is fading away more and more, and bystanders are less and less interested in this direction. Here, as it is impossible by the way, the expression of Warren Buffett is appropriate: “You need to buy when everyone is selling, and sell when everyone is buying,” which was also mentioned in previous publications. Such situations work as follows: the crowd is starting to buy assets in panic, allowing the whales to quietly go out and lock in their profits before decline, and during the fall, panic sales of the crowd enable large players to safely buy themselves before the growth wave begins.

As soon as the crowd begins to merge and lose faith in further development, no one notices that this scenario has been repeated many times, like Bitcoin and many other large assets, long before the blockchain and cryptocurrency. As soon as the crowd begins to see and believe in declining to the minimum levels of the past years (4800, 3500, 3000, 2500, 1300 and so on …), soon we can see the volume increase, the price increase and the understanding that everything was manipulated again.

All the articles