Topic: Could 2018 repeat itself? Price approaching 20K and high fees followed by crash - page 2. (Read 392 times)

Of course it is only speculation, but I'm not quite sure there will be a crash this time. You might see small dips, but a few recent announcements are actually extremely favourable to Bitcoin and could see it continue to steadily grow in value. Lots more hedge funds and money managers are starting to take it seriously - they control huge amounts of money which their clients will now be more happy to see invested in Bitcoin. The currency has been around for over ten years now, which is also giving it more weight and with the Paypal announcement (even if it is a weak form of ownership) there is very likely to be even more uptake from retail investors. Unless something drastic happens (and I'm struggling to think of good reasons), then there should not be a mass exodus like we saw with the last crash.

I believe also that most of those who bought at ATH way back in 2017, already cashed out. Because most of them have no strong foundation in crypto, they just bought it because of the hype. But for those few that patiently waited, they are now seeing the light at the end of the tunnel. And this time, the rise is not owed to fud or hype, but real adoption among users, companies and institutions.

I highly believe that to those people who had bought wayback in peak price or ATH had already long time sell off their bags to believe that we wont be seeing another chance to hit that level again

but it seems those people had already made out some mistake.Yeah, it did take a while yet its been 3 years after that event where we do able to hit the peak and now we are gradually reaching it once again.

Good thing for those who held for that long and sorry for those who sell on loss.

The main problem that we will have in order to reach a new ATH will be that many traders will think ahead and know that surpassing that level at the first opportunity we have after 3 years is going to be very unlikely so they are going to sell close or at that level creating a strong reduction on the price, so I think we are going to see a very fierce battle between the bears and the bulls for the control of the market.

It seems to me there is enough strength on the market to go above the previous ATH since the growth that we have been experimenting has been very slow which means there is a lot of support and once we breakthrough the 20k level all bets will be off about how high the price can go.

I would consider 2018 and 2020 as two different era just like the 2014 and 2018. In 2014 people realized they shouldn't trust exchanges with their money with the major Mt.Gox hack and in 2018, investors and traders realized bitcoin, xmr and eth were the only legit cryptos which can stay even during a hard crash. 2017 had a huge influx of newbies and they became rich and sold out the btc and moved away. What if this was experienced in a large scale? This was how the dump occurred back in 2018. Now, the market has matured a lot and many old era newbies (who entered the market in 2017 and 2018) can understand the difference between shitcoin and bitcoin and can do really good investments.

Regarding the huge fees debate, segwit was announced only on August 2017 and only far less people were using segiwit addresses. But now fast forwarding to 2020, majority of the exchanges, services and bitcoiners have moved onto to segwit related addresses but still we are experiencing scaling issues because of huge congestion in the network. This can probably be minimized to some extent with the activation of Schnorr Signatures. Other than this, we might see more bitcoiners switching over to Lightning Network and other side chains which are yet to be announced for scaling bitcoin.

I believe these factors will prevent bitcoin on attaining another major dump or going back to $3-5k level again!

Might be true. With more and more newbies entering the market and lot more transactions going on inbetween the exchanges, there should be a withdrawal limit set by the exchanges as like the banks to prevent clogging up the network more badly.

I believe that theres no correlation between fees and the price is going down.We know that fees cant  really be mandated if miners would really be imposing a specific sats/byte value.

yet this one will always vary on the market condition and this isn't on miners control btw yet fees do clinged up when people do tend to make it higher due to they want for their

transaction to be pushed fast and as normal thinking where miners would really be prioritizing to those who set much higher fees.Talking about 2018 repeat then no one really knows yet
no man can know on whats the future.

Although the situation seems pretty much the same like in 2017 and 2018 circumstances are quite different. Although the price is on the rise we are still far away from 20k. Yes, the transaction fees are increasing too but to my opinion that is mainly due to price increase itself and the enlarged number of transactions.
I'm not saying that 20k is impossible but still it's s very lomg road to go.

Obviously exchanges do have to pay a lot more money because they want other peoples money to be withdrawn as quickly as possible, they do not do it because they want to, they do it because it is not their money to hold and they need to send it as quickly as possible. However they could simply move to lightning network as an option for people and that would change a lot of things.

When you do not even provide it as an option LN will never get a hold in the door, but when you do offer option of paying 150s/b versus 5 s/b people will see the difference and say "maybe I should move to LN as well?" and that would help LN to get more famous. At the end of the day if we are looking at what they do, we should not criticize them for using high fees, we should request them to completely change the method they are using.

I'm lazy to pull up the blockchain data now but I remember looking into some exchange hot wallets (Binance for example) to see what kind of fee rates they were paying. And that's really what matters, fee rates, not the total size of batched withdrawal transactions. Anyway, I remember Binance was paying insanely high fees at the time, rates like 150+ satoshi/byte when 10-20 satoshi/byte transactions were getting confirmed within a few blocks. Other exchanges do it too. Exchanges consistently drive up fees for the whole network in this way.

One example:


https://www.yahoo.com/news/bitmex-making-bitcoin-network-more-192227680.html

I'm curious to know just how badly exchanges are clogging the network. Are they sending high valued transactions, which implies they have enormous number of bytes? I'm guessing several of these at once make the task of inserting them into blocks take longer for miners.

I just wish there was more pressure on exchanges (from users) to stop burdening the network so much. They are taking years just to batch transactions or support Segwit. Who knows when widespread support for the Liquid sidechain or Lightning will ever happen?

Inter-exchange transfers are a huge part of the congestion problem, probably the single biggest factor if I had to guess. Liquid is extremely well suited for that exact use case (instantly transferring BTC or USDT value between exchange accounts) but since only a couple major exchanges support it, it's pretty useless right now.

When fees start spiking again, people will blame Bitcoin. They should be blaming exchanges for doing nothing to alleviate the problem.

i disagree with your starting point, it doesn't start after months of price rise and over a year after the accumulation. instead the repetition starts from the day the previous bubble bursts. meaning first days of 2018 when price was falling from $20k.
from that day the whole thing starts to repeat. first by the bubble pop and all the drama that brought price to $3k and all we had so far to $15k and all what we will have until $50k to $100k bubble which would be when the next cycle begins.

as for the fees, the only connection i see is when price becomes stable and fees go down. it doesn't matter if price is falling or rising. for example we saw pretty much the same fee spike when price fell $2000 and when it rose $2000 this year.

In all probability, why not? Always believed it has equal chance of being zero as 1 million, below 12k still can't be written off, nor even below 10k, which is why I'm hoping we don't end 2020 on an incredible bull run, as tempting as the prospect is. Much rather see repeated bounces off $15k like today before chugging up to 17k. Running out of time for a 2018 crash though!

I agree that the $20k was unfounded for and we really didn't deserve it. There was this insane hype that allowed people to go crazy over bitcoin for a while but it was too quick to flare up like that and there was no reason to be valued there at that moment, because of all the BCH deals and all and because of many big corporations like amazon accepting it at that moment, we realized that we are on path of mass adoption and crypto everywhere and by that time everyone and their grandmother got involved with crypto.

This was just pure empty hype and we dropped as much as $3k next year. This year the increase is not like that, we have been over $7k consistently except few pandemic period, and we have been over $10k for months now, like at least 3 or 4 and now we reached over $15k, which means this is a lot more sustainable.

I don't want to be the one saying that bitcoin is not going to do an ATH this year, but it's fee has really increase, it's pretty similar in the past but that is just due to the congestion happening at the moment, once the price is stable, fees will slowly go down to its reasonable value.

When I send bitcoin, I just look at the usd value of the transaction feed and today, it seems it's quite lower compared to the fees in the past few days, and we are still in $15k+ now, so eventually that fee will just drop.

You're correct here and the only thing really different from last time is this time around there are a few second layer options to consider. There's still a learning curve involved to onboard new users, but those who seek a way around having to pay crazy fees will learn how to use them. At this point LN is really on good for those who don't mind lying on custodial or 3rd party solutions, whereas Blockstream's Liquid network is pretty much ready to go, for anyone now.

I know Bitfinex allows customers convert BTC back and forth to LN or Liquid BTC free of charge -- once other exchanges adopt Liquid, I predict more everyday users will keep their bitcoin in that form in order to escape fees.

I am sure it can repeat itself, look at now the price of Bitcoin is above $ 15k,
if you compare, this is to like 2018, just waiting to break through $ 19k to make a new all time high,
just hold on, the future of bitcoin is very good.

No. When price hit $20k last market cycle it was at the tail end of a bull market, with FOMO driving millions of people to suddenly buy into crypto in an unsustainable way - as is the way with every boom-crash cycle.

The market is obviously much larger now. The price isn't skyrocketing from $5k to $20k in 2-3 months, it's been building gradually for the past 19 months, and still probably has a good number of months to go before getting back to $20k. Just like in early 2017 when the price hit ~$1100 it didn't do a repeat of 2014 and crash back to $200, and so on for every previous market cycle.

$20k will be the START of the explosive phase of the current (now 19th month old) bull market, not the end of it. $20k becomes the launching point, as was $1000+ in 2017, and $100-$200 in late 2013, and so on. $20,000 is the new $1000.

Bitcoin fees seem to have gone to high single digits this past week, but bitcoin fees always rise temporarily during a pump. But they have consistently been low single digits or very often under $1 at prices anywhere from mid-four digits to low thousand-teens. At these prices in 2017 the transaction fees were skyrocketing to $50+, now staying consistently under $1 or low single digits. That's because now $10k+ is a normal price for Bitcoin that doesn't create a frenzy, whereas 3 years ago $10k+ was hit for the first time right near the end of 7+ month crypto frenzy.

Will transaction fees go back to $50+ dollars this market cycle, undoubtedly. But it won't do that until there is another frenzy that gets millions of people trying to push through transactions all at once to send bitcoin between exchanges or between wallets and exchanges. Bitcoin will be at the very least several times its current price before such a frenzy occurs again.

Aren't the fees going higher mainly due to both price increases as well as more people putting transactions into the blockchain? Also, it's more likely for Fees to be dependent on the price of Bitcoin, and not vice versa tbh. Plus, I'd like to see this growth on a positive note, much more compared to the 2018 one since the market right now is still currently building up its foundations, not like how back then in 2018 which was basically a bubble, which isn't really good in the long term.

Plus, we all know an exact repeat of history is impossible, a lot of factors back then and now are quite different.

Nothing.


Why would people sending low fee transactions, or miners collecting less transaction fees, cause the price to crash? I just don't see any causal relationship here.


This is what I think happens. During a strong bull market or bubble, potential BTC and altcoin gains are in the 100s and 1,000s % range. Speculators don't care one bit about transaction fees. So speculators withdrawing from exchanges (and exchanges intent on guaranteeing fast withdrawals) drives network fees up exponentially. When the bubble pops and the associated hype dies down, all that demand for block space begins to evaporate too. Then fees return to normal.

I don't see high fees as the cause of the 2017 bubble pop at all. I think rising fees have a positive correlation with rising prices, that's all.