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

The way I see it, there's going to be painful corrections all the way up. And the more exponential the upside becomes, the deeper the corrections (in % terms) will be. Good examples would be the $3,000-$1,800 (June-July) and $5,000-$3,000 (September) pullbacks in 2017. A lot of people probably don't realize that a similar pullback now would put us in the low $11,000s or upper $10,000s.

With great volatility comes great pain.

I was mostly referring to the likelihood of it happening, considering how much more volatile Bitcoin can be than gold. You raise a good point though. Now that we've climbed from ~$17k to ~$18k in 12-ish hours, I'm definitely expecting a sizable correction -- I just hope it happens sooner rather than later lol.

It would appear that fee spikes occur for 2 reasons combined:

- an increase in network demand on the network, most notably when people are moving coins on and off exchanges, and

- an unfavorable shift in hash rate or mining difficulty that makes it harder to mine blocks within 10 minutes of each other.

After both things have been occurring simultaneously for a while, a backlog of transactions develops and fees rise. One thing or the other might be tolerable but when both happen, the network overloads and fees go up. It's kind of unavoidable.

I already know the website that you shared and I know some even better than these. It's like, the costs get adjusted every few days and I believe we'll once again see the fees popping up higher once we start the march towards $20k. Let's just wait and watch, and if the fee remains nearby the same values as you've mentioned atm, we'd be lucky enough this time that BTC will have things maintained the way it did in its low price days.

Dont know why they do talk about high fees yet its almost on dust amount even the price of bitcoin is clinging up to 17k

Low priority
8 sat/vB ($0.19)
   
Medium priority
10 sat/vB ($0.23)
   
High priority
11 sat/vB ($0.25)

People are way too exagerrated without even trying to check out the real numbers.
https://mempool.space/

Miners are not getting ^less fees^ tbh and based on the current value of BTC, it looks justifiable. When we talk about miners, it's them prioritizing the high fee transactions which is why the low fee transactions just remain in the mempool and it gets clogged, this gives even higher boost and edges it up to more higher fees than the already high ones. Even if we try to send our transaction with a low priority fee, I don't think that miners will be mining it any time soon because big players are already paying hefty amounts in fees to them.

Wait!
Are we doing the wrong thing by blaming miners? Aren't some firms intentionally paying high fees to keep the bar up and make the end user pay more fees to get a place for their transaction in a block? Think it for a second. Why would miners intentionally do that?

Panic selling is not just characteristic of Bitcoin. After gold's exponential rise into 2011, it crashed 46%. You think gold lacks institutional support?

That's simply what happens after an exponential and speculative rise. In my experience, the faster and further an asset rises, the harder the subsequent fall usually is.


I wouldn't mind seeing things slow down a little. It reminds me a bit of the 2019 rally......which went too far, too fast. A nice steady rise into the previous ATH, similar to 2016, would be nice.

It does feel like it. Though Btc has been experiencing a short pull back a couple of times which I think It would gradually getting worse, but no it didn't, instead Btc continued to show strong signs of a consistent upward movements.
Seeing a several big names and other institutional investors coming in to the crypto market does feel like we're breaking a new ATH anytime sooner.

I mostly have the same position. I'm not expecting a major crash this time around because apart from Bitcoin transcending all the bubble talk that plagued the 2017 run, we actually have transparent institutional support this time around; people are much less likely to panic sell if they're seeing big brands like Paypal get in on the fun. If the fees had anything at all to do with the crash, I imagine it had more to do with people's transactions getting stuck, feeding more fear to the bubble anxiety, than fees actually getting more expensive.

I'm actually a bit surprised that growth has been as explosive as it has, but it certainly feels a lot more sustainable than 2017's.

Not disagreeing, but again sample sizes matter and other pertinent data is more important to indicate utility. # of txs per block to me is still the major one, plus how full those blocks are, plus the number of inputs (as more people do batch) and volume in channels for LN.

Fundamentals have been increasing, in that sense adoption has as well in # of users and frequency of tx and volume -- while average fees have been decreasing thanks to efficiencies and upgrades. Spike of fees isn't because of adoption but increased demand in those smaller periods I think.

When bitcoin on the rally, the price is driven by 'supply and demand' in the exchanges. At that time, people tend to send bitcoin to exchanges, not the other way around. Because of the fear of missing out and to avoid long time confirmation, people decide to pay higher fees, the next person pays an even higher fee, it creates a snowball effect which causes the fees to go up out of control.

having low fees is an indication of low usage which in turn can be an indication of low adoption or lack of mass adoption. otherwise if we had more adoption of bitcoin then obviously more people would be using bitcoin (sending more transactions) so the network would be more congested and fees keep rising up.

What I'm thinking is that the same thing can repeat itself again this time but maybe not too deep like 2018. In December 2017, when it was ATH, yes many felt it has sailed the highest that season and being the end of the year , the fear engulfed many to cash out. And that made price begin to drop slowly.
This time also, there are many reason that price can still crash. This year is much of fear factor of bad economy because of covid-19 and now price gets higher than expectation. So almost the same scene in 2017/18 , the difference however is halving year in 2020.

Fees have nothing to do with it, I'd say, at least not when looking at such tiny samples. You could still have empty blocks and high fees of people decided they didn't want to adjust and just pay a lot of fees (and we've seen periods like that). Or you could have full blocks and low fees, with most people opting to go 2nd layer and that's a whole lot of adoption figures out of the equation.

I don't know if the low fee can be seen as evidence that adoption has increased. However, in my opinion, this low fee is due to the network condition that is not full of transaction and the market is in a sideways state. It is seen that when the bitcoin price is bullish happen suddenly, the fee will increase and will increase if the public continues to want transaction to be processed quickly.

The previous bull market took place as a wave, because the growth happened all of the sudden in an unexpected moment. By the time people are into hard discussion about the price reaching $8000 & $10000. The price crossed $8000, then $10000 and keeps moving. Around $15000 it gained stability. Looking upon the growth more inflow of money happened and the same kept the market in pumping. This caused the price to cross $20000 and crash.

This time the growth is happening in a steady manner without much of major crash in between. Today the market has crashed down to $16000, and this looks there is lack of stability above $16000.

^ Technically, I also believed what I am quoted above. It possible that bitcoin will repeat or grow up beyond what we expected, if we look into a different angle, bitcoin adoption was a great help. Through the different good news that we heard this year, bitcoin has increased the price and I think that event will happen again and again. Nevertheless, when it comes to fees I am surprised yesterday that the fees are very low even though it is not yet weekend. As we observed the bitcoin fee will low when the weekend comes but last week, it shows stay low for the whole week. Probably that is the sign of having massive adoption.

Repetition of event can still occur and it is not impossible. But it all depend on how much people are willing to buy bitcoin in the market because increasing demand is a sign that the price will go up. December 2017 many investor and newcomer entered the crypto world where they brought several suitcases filled with fresh money to invest. But slowly these people stepped back and began to fortify themselves from greed and manage better strategies such as being less affected by ICO and IEO project.

We all don't know what will happen to bitcoin in the future, but I really believe that the increased adoption and also investor confidence in bitcoin will go a long way toward increasing its price. Let's hope that price volatility will continue to provide benefit for those who are good at it because on the other hand volatility can also cause losses for them.

Last time we crashed wasn't because of transaction fee's only, it was also because we had no reason left to buy bitcoin and that meant people got out and the more people got out meant more price went down as well. So, at the end of the day, we are not anywhere near 2018 and we are building something totally different.

The reason why 2017 peak happened was because BCH was created that summer which promised people free money if they got BCH, and that meant everyone and their grandmother bought bitcoin in order to get free BCH, at the time price was around 1k dollars and what was promised was around 200 dollars, obviously everyone bought and made it over 3k by that time and that momentum just kept growing. This time around it is organic and nothing related to one news.

The bullish scenario that can reach $ 20k if it is very possible, as the market can sometimes repeat events.

It should be noted that we are approaching December, and December is a month where the price of Bitcoin is usually very likely to rise, there is more demand, that is, people trade more and use bitcoin a lot, which, is good, if there is more demand, the supply decreases and the price increases. It's a great opportunity, the best for now is hodl.

On the other hand, when this happens, it is logical that the Bitcoin rates increase, if transfers are made with little fee it would take a long time for the transaction to arrive, some people have waited weeks for the transaction to be completed, I think the best thing is to do the transaction with a normal fee.

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.

That situation with fees was a result of a beef of BCH devs with BTC. It wasn't a natural occurrence, but a situation which followed the segwit debate. I'm not going to explain all of it here but if you're interested there's plenty of articles from that year.
That said, it's natural for fees measured in fiat to increase when the price of bitcoin goes up. They don't go up by a lot in BTC terms, but their fiat value does, so there of course is a connection between bitcoin's fees and its price.

Definitely, the fees will go up when we enter a bull run in 2021. Just look at how the fees is when the price goes to almost $16k in the last couple of days? However, if your transaction are going to get confirmed with less fees then why pay more? I have experimented several transaction fees, 1 sat/byte = 2 days confirmation. so it's really possible to just pay with low fees specially if you are not in hurry or something.

Edit: I don't know what you mean by 2018 though, maybe December 2017 to first quarter of 2018?

I think it's already tied up when the price goes up, fees goes up too. But if it's about the following crash, what I say is that we're already done with that. The month of March has took the crash and it's very low. Spending with lesser fees, miners will just keep going even if we pay lower fees.

I remember that when I was a newbie, I pay nothing for fees and the confirmation was quick.

yes it's definitely true. everything can happen but I am confident btc value will be bullish. we have seen some nice values during these days but hodling is the only solution.

Even if people are trying to spend less for their payment doesn't mean business profit of miners will be changed.
it's not the first halving, in the past it was possible also get a transaction confirmed with 0 sat/byte fees. miners has processed the same

Anything can happen, however an exact repetition of the events that transpired at the end of 2017 and at the beginning of 2018 is unlikely, we know there is some level of correlation between the price and how busy is the network, but at the end what the price will do will depend on the demand of bitcoin and nothing more.

During the 2017 bull run there were several points in which it seemed as if the price could not go up anymore and there was a reduction on the price and many believed a crash was coming, and it did, just not at the level they were predicting, it is going to be very difficult for bitcoin to surpass the 20k level since psychologically many traders as soon as we get closer to it will begin to sell thinking a crash is coming, but that is where demand will prove to be critical, if the demand can still absorb all the coins being sold by those that will sell their coins during the next weeks then we are bound to see a new ATH, but if not then the price will have to come to a more stable position, like the 12k or 13k level, so as you can see this does not necessarily means that a crash is coming but we cannot discard it either.

It all started when Bitcoin stabilized at 12K almost a month ago, we were having 20 sats/vbyte feed before then, then when we approached 13K after the PayPal announcement, the fees spiked to 100 sats/vbyte or somewhere around that. The state of the network today is that while it’s around $14K and $15K, the fees are going to be around 150-200 sats/vbyte.

These fees are much less compared to 2018 levels, but as we approach 2017/2018’s ATH, what is going to prevent us from having those huge fees (I don’t know; somewhere between 400 and 900 sats/vbyte) a second time? Is is that more people are going to send their transactions with a low priority fee to avoid them, and miners will ultimately get less transaction rewards from their blocks as well as a decrease in transactions per block, could all cause the price to crash a second time, which will revert to low fees having normal priority?

I want to know if there is a connection between people paying less fees and the price going down.