The most important factor now might be the upcoming bitcoin reward halving which is dated for mid next year. This could have a more than significant impact on the price, in the interval before that time however, some suggest the market would again turn bullish in the coming months and recover some of the lost value.
This is why halving is first on the list on the bullish part of the post. 
Topic: Bitcoin Bearish or Bullish? Here my thoughts: JULY UPDATE (+POLL) - page 6. (Read 2412 times)
February 06, 2019, 05:43:07 PM
February 06, 2019, 03:03:28 PM
The most important factor now might be the upcoming bitcoin reward halving which is dated for mid next year. This could have a more than significant impact on the price, in the interval before that time however, some suggest the market would again turn bullish in the coming months and recover some of the lost value.
February 06, 2019, 12:53:23 PM
It doesn't matter what the miners will be making, we all talked about how bitcoin wouldn't go under $5.8k back in the day because that wouldn't allow miners to profit and the cost was too much for them to keep on mining when the price goes lower than that which means the price would stay above that. What happened afterwards ? Price dropped so much that many miners left the mining equipment idle and that caused the difficulty to drop and made the cost of mining a lot cheaper and here we are now.
Do not even attempt to think miners will have anything to do with bitcoin because they don't and they never will. It is the whales and the public opinion that shapes the price of bitcoin and according to what people think bitcoin worth the price changes.
Yeah, I do agree, basically it is the same reasoning I did a couple of posts above. Do not even attempt to think miners will have anything to do with bitcoin because they don't and they never will. It is the whales and the public opinion that shapes the price of bitcoin and according to what people think bitcoin worth the price changes.
February 06, 2019, 12:51:44 PM
This is a very interesting thread. From now on the block halving is going
to get more and more attention.
In crypto im normally have a glass half full attitude but to me those bearish
points outweigh the bullish ones.
Im wondering will the block halving bring out the bulls or will it be just a
temporary rise followed by a correction back to bearish?
Great OP!
to get more and more attention.
In crypto im normally have a glass half full attitude but to me those bearish
points outweigh the bullish ones.
Im wondering will the block halving bring out the bulls or will it be just a
temporary rise followed by a correction back to bearish?
Great OP!
February 06, 2019, 11:47:49 AM
It doesn't matter what the miners will be making, we all talked about how bitcoin wouldn't go under $5.8k back in the day because that wouldn't allow miners to profit and the cost was too much for them to keep on mining when the price goes lower than that which means the price would stay above that. What happened afterwards ? Price dropped so much that many miners left the mining equipment idle and that caused the difficulty to drop and made the cost of mining a lot cheaper and here we are now.
Do not even attempt to think miners will have anything to do with bitcoin because they don't and they never will. It is the whales and the public opinion that shapes the price of bitcoin and according to what people think bitcoin worth the price changes.
Do not even attempt to think miners will have anything to do with bitcoin because they don't and they never will. It is the whales and the public opinion that shapes the price of bitcoin and according to what people think bitcoin worth the price changes.
February 06, 2019, 08:20:18 AM
For me, the Lightning Network is wasted as a bullish factor.All the hype regarding LN is already gone.
The transaction volume increase shows that there is some demand for bitcoins(at the current low prices),which means that there is support of the current price.
BTC will go bullish after 2 years,despite all the bearish factors.
The transaction volume increase shows that there is some demand for bitcoins(at the current low prices),which means that there is support of the current price.
BTC will go bullish after 2 years,despite all the bearish factors.
February 06, 2019, 03:26:25 AM
Based on your findings, it is typical of an asset to have the results you gathered. The bearish cases are in line with the general sentiment of the market. On the other hand, the bullish cases are also typical of an oversold and undervalued market.
Basically, the Bitcoin market is due for a rally but everyone is still waiting for another drop (bearish sentiment, low volume)
Basically, the Bitcoin market is due for a rally but everyone is still waiting for another drop (bearish sentiment, low volume)
February 05, 2019, 10:25:44 AM
I think bitcoin is looking for directions..It is stable now .But more chances of going upwards as any price less than $3k is not sustainable for miners
As you can see mining price is not a reason to be bearish or bullish. So I discard that explaination. February 05, 2019, 10:24:19 AM
I think bitcoin is looking for directions..It is stable now .But more chances of going upwards as any price less than $3k is not sustainable for miners
February 05, 2019, 09:39:44 AM
1 trillion marketcap is still low, gold has a 7 trillion marketcap and that is mainly from store of value. The world is moving to a digital world and gold is a hassle to transport globally while bitcoin just requires a few clicks of the mouse.
So true.Next step is: if you think digital gold (Bitcoin) can be equal in store of value to physical gold, and physical gold has 7 TN of market value, what is the “fair” value of the digital gold, provided there are only 21 millions unit of this?
That was one of the back of the envelope calculations I made when I decided to invest in bitcoin.
February 05, 2019, 09:33:59 AM
1 trillion marketcap is still low, gold has a 7 trillion marketcap and that is mainly from store of value. The world is moving to a digital world and gold is a hassle to transport globally while bitcoin just requires a few clicks of the mouse.
February 05, 2019, 09:18:12 AM
I was initially skeptical about the exchange issues but got it after your explanation and I'm with you on that. One amazing feature about crypto that many haven't realized is that everything about it speaks about decentralization. Should trading occur mostly of DEXes, fund losing will reduce drastically coz no one will be a custodian of your Gold for you.
Also, for the transaction volume aspect, I'd say we should givebthe market some more time, it'll pick up along. What I have realized is that many people are of the notion of "wait and see" so they're psychologically watching tonenter at another new low which no one kniws whether it'll happen or not. Anyways, any breakout sooner or later will bring us alk the volume we need.
Overall, I'm bullish here lol. I believe we've reached the bottom. This is no TA buh I want to be one of the first people who called out the bottom.
Nice analyses. Good job mate!
Also, for the transaction volume aspect, I'd say we should givebthe market some more time, it'll pick up along. What I have realized is that many people are of the notion of "wait and see" so they're psychologically watching tonenter at another new low which no one kniws whether it'll happen or not. Anyways, any breakout sooner or later will bring us alk the volume we need.
Overall, I'm bullish here lol. I believe we've reached the bottom. This is no TA buh I want to be one of the first people who called out the bottom.
Nice analyses. Good job mate!
Thanks.
While I do agree on DEX in principle, those are still a very tiny part of global trading today, so I don’t think they could tilt the analysis on either way. Also because they lack a series of features that are compulsory for a large part of institutional investors.
February 05, 2019, 09:09:20 AM
I was initially skeptical about the exchange issues but got it after your explanation and I'm with you on that. One amazing feature about crypto that many haven't realized is that everything about it speaks about decentralization. Should trading occur mostly of DEXes, fund losing will reduce drastically coz no one will be a custodian of your Gold for you.
Also, for the transaction volume aspect, I'd say we should givebthe market some more time, it'll pick up along. What I have realized is that many people are of the notion of "wait and see" so they're psychologically watching tonenter at another new low which no one kniws whether it'll happen or not. Anyways, any breakout sooner or later will bring us alk the volume we need.
Overall, I'm bullish here lol. I believe we've reached the bottom. This is no TA buh I want to be one of the first people who called out the bottom.
Nice analyses. Good job mate!
Also, for the transaction volume aspect, I'd say we should givebthe market some more time, it'll pick up along. What I have realized is that many people are of the notion of "wait and see" so they're psychologically watching tonenter at another new low which no one kniws whether it'll happen or not. Anyways, any breakout sooner or later will bring us alk the volume we need.
Overall, I'm bullish here lol. I believe we've reached the bottom. This is no TA buh I want to be one of the first people who called out the bottom.
Nice analyses. Good job mate!
February 05, 2019, 08:52:54 AM
EDIT: Post updates:
End of February Update
End of March Update
End of April Update
End of May Update
End of June Update
End of July Update
I still cannot decide.
There is a number of different issues pointing to an higher or lower bitcoin. Both are valid, but still I cannot decide which one will prevail and when.
Here I collect a few evidences, trying to sum up a few conclusion. I don’t think every one of this indicators has to be fully trusted independently, but looking at them all together might give us first of all a clear snapshot of the current environment, secondly might help rationalize it.
There are a lot of graphs, I will post here both picture and graph link, so you can check the source independently.
BULLISH: Halving.
We all know that in May, 2020 bitcoin will halve mining reward from 12.5 BTC to 6.25 BTC, this mean every day the number of bitcoin mined everyday will drop from 1800 to 900 dropping actual inflation rate from 3.82% to 1,80%. Just for comparison the rate M1 (money + money like instruments) is growing in US is 5%.
An new way of looking at is is thinking at the impact of money inflows on the market:
https://twitter.com/HassMcCook/status/1092593192854159360
Just to give you an idea: I told you before M1 is growing 5% annually: this means $500m are created on a daily basis, in USD only (other CB’s are increasing money supply at similar or higher levels).
Halving will happen in May ’20, history told us pre halving rally starts 6ish month before, this leaves us with at least another 10 months of crypto winter ahead of us.
Provided history repeats again this time everyone expecting it to do so.
BULLISH: Layer 2 applications - Lightning Network
https://bitcoinvisuals.com/lightning
https://graph.lndexplorer.com/
Lightning network recently capacity 645 BTC. This is an impressive growth for a technology still in his full development, needing a border line reckless attitude to put funds in it, being the change of losing those fund not negligible.
This is an “invisible asset” for bitcoin adoption, allowing truly decentralised, trustless, instant payments with ridiculously low fees. This will allow the creation of a whole new industry of payment processors: ending point? Competition with credit cards.
In addition to that every Layer 2 progress allows further developments (layer 3 applications I cannot even think of) and in addition to that strengthens Layer One: the Bitcoin protocol, like a big Jenga game, where every superior layer presses and consolidate lower layers.
BULLISH: Transactions number:
https://www.blockchain.com/charts/n-transactions-excluding-popular?daysAverageString=7×pan=2years
We had times where Bitcoin prices went up without transaction number going up accordingly, now the opposite is happening: transaction number is back to a steadyily high, and growing, level, whils price is still lagging behind.
If we couple this finding with the growing success of LN, then we can be positive about the future.
BULLISH: Cryptopia, Quadriga Exchanges disasters
https://www.chepicap.com/en/news/7157/cryptopia-hack-timeline-as-it-happened.html
https://www.coindesk.com/quadrigacx-crypto-exchange-users-say-they-still-cant-get-their-money-out
Yes, those are actually bullish news. Firstly every destroyed bitcoin, is a bitcoin actually lost forever, meaning available bitcoin are even less than theoretically available, thus increasing value of remaining bitcoins.
Secondly, exchanges are the weakest link in the cryptosystem: subpar operations, poor security and suboptimal protection for the inexperienced users are the norm so far. There’s a reason if one of the first suggestion is not to keep your funds on an exchange. This is meant to change, if we want cryptos to succeed: we have to make exchanges evolve toward more evolved context. If this must happen via Darwinist-like evolution (of both users and exchanges) or via law enforcements is yet to be seen (I prefer the first one, but I am open to suggestions).
BULLISH: Bitcoin working for what it was meant for by Satoshi, uncensurable Store of Value.
This is not my idea, but it is too relevant not to be added here.
There is a very nice work by Matt Ahlborg https://medium.com/@mattahlborg/nuanced-analysis-of-localbitcoins-data-suggests-bitcoin-is-working-as-satoshi-intended-d8b04d3ac7b2 applying big data analysis on Localbitcoin raw data. I do recommend the whole post, but the main finding i carried away is that Bitcoin is personal, uncensorable financial sovereignty. Local Bitcoins volume analysis allow to grasp this reality emerging in countries where personal freedom is endangered. This is a symptom that begun to be observed only there, but the reality is that this i a fundamental value that has everyone of us potentially impacted, and not only on a dystopic future, as JP Morgan want us to believe.
BEARISH: Unique addresses number is not picking up
https://www.blockchain.com/charts/n-unique-addresses?timespan=2years&daysAverageString=7
Unique Bitcoin addresses used has shown signs of stabilization, but they are at levels last associated with much lower prices: we have a number of addresses first seen at the end of 2016 lows that were associated with price range of $700-$1,000.
BEARISH: Volatility and NVT
Here a couple of more technical indicators: realised (historical) volatility coupled with Network value-to-transactions (NVT) ratio.
The first indicates the realised swings of Bitcoin Prices, the attached graph shows a blue line of such index computed over the last 120 days.
The second can be interpreted for Bitcoin in the same way P/E ratio for a stock-market. More insight and details on the interpretation of such signal can be found here:
https://woobull.com/introducing-nvt-ratio-bitcoins-pe-ratio-use-it-to-detect-bubbles/
Both are heading down, but remain far-above the levels that have typically marked price bottoms (NTV Ratio above 40 signals a bottom on the market) . The end of 2015 was the last time these measures marked a nadir. That near-simultaneous trough set the stage for the bull market, when prices surged from $300 to $19,000. The indicators should breach the 2015 low, if history is a guide, notably volatility to signal the end of bearish market. At the moment both indicators are well above those lows, and there’s a pressure and space for them to fall lower together.
BEARISH: USD Exchange Trade Volume
https://www.blockchain.com/charts/trade-volume?daysAverageString=7×pan=2years
Exchange traded volume are touching multi year lows. Also Bitcoin future activity (open interest) is hovering at minuscule levels both on CME and CBOE futures, evening considering the “business cycle” of such instruments.
Low volume are correlated with low prices, and last time we had this volume on exchanges, back in first days of August ’17 Bitcoin price was hovering just USD 3,000. As I said speaking about halvening, big volumes are needed to sustain prices, and future open interest is a signal of “interest” of Wall Street, or broader traditional finance, on the world of cryptos. It is not a good sign if this interest is at low levels, even remembering that is not Bitcoin that needs Wall Street, but rather Wall Street that needs Bitcoin.
CBOE future
http://cfe.cboe.com/cfe-products/xbt-cboe-bitcoin-futures
CME future
https://www.cmegroup.com/trading/equity-index/us-index/bitcoin.html
BEARISH: Transaction Value is not picking up .
https://www.blockchain.com/charts/estimated-transaction-volume-usd?daysAverageString=7×pan=2years
Highly correlated to Bitcoin (BTC), estimated dollar-transaction value has declined to levels last when the cryptocurrency's price was about $2,400. For most of 2018, the measure flashed warnings that BTC was priced too high. It still is. May 2017, when BTC first traded above $2,400, was the last time the 30-day average of dollar-based transactions from Blockchain.com was at current levels. Despite this average measure of past transactions, the scale of our graphic shows it acts as a leading indicator.
Clearly in a downtrend, with prices briefly dipping below the white transactions line in December, BTC should drop a further $1,000 just to catch up with plunging transactions. When 180-day volatility bottomed in October 2015, transactions were in a clear uptrend. We expect new lows in volatility for a similar indication.
EDIT:
Please note that i didn't include anything about mining cost. I hence dismiss mining revenues as an explaination of bitcoin price.
Of course low prices cause miners to sell more and more bitcoins to pay their FIAT bills, but least efficient miners will be eventually pushed out of business, difficulty will adjust and equilibium would eventually be gained again.
So only a temporary effect.
Ready to be proven wrong.
What are your thoughts?
End of February Update
End of March Update
End of April Update
End of May Update
End of June Update
End of July Update
I still cannot decide.
There is a number of different issues pointing to an higher or lower bitcoin. Both are valid, but still I cannot decide which one will prevail and when.
Here I collect a few evidences, trying to sum up a few conclusion. I don’t think every one of this indicators has to be fully trusted independently, but looking at them all together might give us first of all a clear snapshot of the current environment, secondly might help rationalize it.
There are a lot of graphs, I will post here both picture and graph link, so you can check the source independently.
BULLISH: Halving.
We all know that in May, 2020 bitcoin will halve mining reward from 12.5 BTC to 6.25 BTC, this mean every day the number of bitcoin mined everyday will drop from 1800 to 900 dropping actual inflation rate from 3.82% to 1,80%. Just for comparison the rate M1 (money + money like instruments) is growing in US is 5%.
An new way of looking at is is thinking at the impact of money inflows on the market:
https://twitter.com/HassMcCook/status/1092593192854159360
Just to give you an idea: I told you before M1 is growing 5% annually: this means $500m are created on a daily basis, in USD only (other CB’s are increasing money supply at similar or higher levels).
Halving will happen in May ’20, history told us pre halving rally starts 6ish month before, this leaves us with at least another 10 months of crypto winter ahead of us.
Provided history repeats again this time everyone expecting it to do so.
BULLISH: Layer 2 applications - Lightning Network
https://bitcoinvisuals.com/lightning
https://graph.lndexplorer.com/
Lightning network recently capacity 645 BTC. This is an impressive growth for a technology still in his full development, needing a border line reckless attitude to put funds in it, being the change of losing those fund not negligible.
This is an “invisible asset” for bitcoin adoption, allowing truly decentralised, trustless, instant payments with ridiculously low fees. This will allow the creation of a whole new industry of payment processors: ending point? Competition with credit cards.
In addition to that every Layer 2 progress allows further developments (layer 3 applications I cannot even think of) and in addition to that strengthens Layer One: the Bitcoin protocol, like a big Jenga game, where every superior layer presses and consolidate lower layers.
BULLISH: Transactions number:
https://www.blockchain.com/charts/n-transactions-excluding-popular?daysAverageString=7×pan=2years
We had times where Bitcoin prices went up without transaction number going up accordingly, now the opposite is happening: transaction number is back to a steadyily high, and growing, level, whils price is still lagging behind.
If we couple this finding with the growing success of LN, then we can be positive about the future.
BULLISH: Cryptopia, Quadriga Exchanges disasters
https://www.chepicap.com/en/news/7157/cryptopia-hack-timeline-as-it-happened.html
https://www.coindesk.com/quadrigacx-crypto-exchange-users-say-they-still-cant-get-their-money-out
Yes, those are actually bullish news. Firstly every destroyed bitcoin, is a bitcoin actually lost forever, meaning available bitcoin are even less than theoretically available, thus increasing value of remaining bitcoins.
Secondly, exchanges are the weakest link in the cryptosystem: subpar operations, poor security and suboptimal protection for the inexperienced users are the norm so far. There’s a reason if one of the first suggestion is not to keep your funds on an exchange. This is meant to change, if we want cryptos to succeed: we have to make exchanges evolve toward more evolved context. If this must happen via Darwinist-like evolution (of both users and exchanges) or via law enforcements is yet to be seen (I prefer the first one, but I am open to suggestions).
BULLISH: Bitcoin working for what it was meant for by Satoshi, uncensurable Store of Value.
This is not my idea, but it is too relevant not to be added here.
There is a very nice work by Matt Ahlborg https://medium.com/@mattahlborg/nuanced-analysis-of-localbitcoins-data-suggests-bitcoin-is-working-as-satoshi-intended-d8b04d3ac7b2 applying big data analysis on Localbitcoin raw data. I do recommend the whole post, but the main finding i carried away is that Bitcoin is personal, uncensorable financial sovereignty. Local Bitcoins volume analysis allow to grasp this reality emerging in countries where personal freedom is endangered. This is a symptom that begun to be observed only there, but the reality is that this i a fundamental value that has everyone of us potentially impacted, and not only on a dystopic future, as JP Morgan want us to believe.
BEARISH: Unique addresses number is not picking up
https://www.blockchain.com/charts/n-unique-addresses?timespan=2years&daysAverageString=7
Unique Bitcoin addresses used has shown signs of stabilization, but they are at levels last associated with much lower prices: we have a number of addresses first seen at the end of 2016 lows that were associated with price range of $700-$1,000.
BEARISH: Volatility and NVT
Here a couple of more technical indicators: realised (historical) volatility coupled with Network value-to-transactions (NVT) ratio.
The first indicates the realised swings of Bitcoin Prices, the attached graph shows a blue line of such index computed over the last 120 days.
The second can be interpreted for Bitcoin in the same way P/E ratio for a stock-market. More insight and details on the interpretation of such signal can be found here:
https://woobull.com/introducing-nvt-ratio-bitcoins-pe-ratio-use-it-to-detect-bubbles/
Both are heading down, but remain far-above the levels that have typically marked price bottoms (NTV Ratio above 40 signals a bottom on the market) . The end of 2015 was the last time these measures marked a nadir. That near-simultaneous trough set the stage for the bull market, when prices surged from $300 to $19,000. The indicators should breach the 2015 low, if history is a guide, notably volatility to signal the end of bearish market. At the moment both indicators are well above those lows, and there’s a pressure and space for them to fall lower together.
BEARISH: USD Exchange Trade Volume
https://www.blockchain.com/charts/trade-volume?daysAverageString=7×pan=2years
Exchange traded volume are touching multi year lows. Also Bitcoin future activity (open interest) is hovering at minuscule levels both on CME and CBOE futures, evening considering the “business cycle” of such instruments.
Low volume are correlated with low prices, and last time we had this volume on exchanges, back in first days of August ’17 Bitcoin price was hovering just USD 3,000. As I said speaking about halvening, big volumes are needed to sustain prices, and future open interest is a signal of “interest” of Wall Street, or broader traditional finance, on the world of cryptos. It is not a good sign if this interest is at low levels, even remembering that is not Bitcoin that needs Wall Street, but rather Wall Street that needs Bitcoin.
CBOE future
http://cfe.cboe.com/cfe-products/xbt-cboe-bitcoin-futures
CME future
https://www.cmegroup.com/trading/equity-index/us-index/bitcoin.html
BEARISH: Transaction Value is not picking up .
https://www.blockchain.com/charts/estimated-transaction-volume-usd?daysAverageString=7×pan=2years
Highly correlated to Bitcoin (BTC), estimated dollar-transaction value has declined to levels last when the cryptocurrency's price was about $2,400. For most of 2018, the measure flashed warnings that BTC was priced too high. It still is. May 2017, when BTC first traded above $2,400, was the last time the 30-day average of dollar-based transactions from Blockchain.com was at current levels. Despite this average measure of past transactions, the scale of our graphic shows it acts as a leading indicator.
Clearly in a downtrend, with prices briefly dipping below the white transactions line in December, BTC should drop a further $1,000 just to catch up with plunging transactions. When 180-day volatility bottomed in October 2015, transactions were in a clear uptrend. We expect new lows in volatility for a similar indication.
EDIT:
Please note that i didn't include anything about mining cost. I hence dismiss mining revenues as an explaination of bitcoin price.
Of course low prices cause miners to sell more and more bitcoins to pay their FIAT bills, but least efficient miners will be eventually pushed out of business, difficulty will adjust and equilibium would eventually be gained again.
So only a temporary effect.
Ready to be proven wrong.
What are your thoughts?
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