It is becoming clear that this correction is not finished.
In my opinion, this cycle, which resembles 2011, will bottom only once the highest cost bitcoin mines are driven out of business.
In 2011, market price bottomed just before hashing rate had finished its 50% decline.
Since it will take some time and duration for this decline to manifest itself, I predict that it (price bottom) will happen in ~3-4 mo, or even later because large scale miners would have some operational inertia.
As indicative of this, hashing rate increases are slowing to a crawl, but we need at least about ~50% difficulty decrease, which will be achieved if we slowly decline to somewhere between $72 and $240. $72 is somewhat extreme and would correspond to the same decline %%-wise as in 2011, but $240 is quite realistic and would be extremely painful if it will occur slowly.
Having said that, I am not selling my BTC yet because timing this process exactly is beyond my trading abilities.
In my opinion, this cycle, which resembles 2011, will bottom only once the highest cost bitcoin mines are driven out of business.
In 2011, market price bottomed just before hashing rate had finished its 50% decline.
Since it will take some time and duration for this decline to manifest itself, I predict that it (price bottom) will happen in ~3-4 mo, or even later because large scale miners would have some operational inertia.
As indicative of this, hashing rate increases are slowing to a crawl, but we need at least about ~50% difficulty decrease, which will be achieved if we slowly decline to somewhere between $72 and $240. $72 is somewhat extreme and would correspond to the same decline %%-wise as in 2011, but $240 is quite realistic and would be extremely painful if it will occur slowly.
Having said that, I am not selling my BTC yet because timing this process exactly is beyond my trading abilities.
^^^^Hey, check out my prediction made in October...SOB.
WSJ agrees...in January.
http://blogs.wsj.com/moneybeat/2015/01/13/bitbeat-bitcoins-price-mining-hashrate-reflect-unsynchronized-bubbles/
The WSJ article makes what I think is an important point, which is that fluctuations in mining and fluctuations in bitcoin price have time delays that cause them to be desynchronized. And the time delays are complex and difficult to analyze. There are time delays between capital investments in mining --> increase in hash rate as equipment comes on line --> coin generation. Everyone likes to point out that miners selling coins on the market will suppress the price, but I have not seen this mentioned very often: money invested in mining equipment today (many months before the investment produces coins that may be sold on the market) is money that otherwise might have been spent purchasing coins today. So growth in mining is potentially a double whammy: price is suppressed today because money that would have been used today for coins is instead put into capital investment for mining equipment; and price is suppressed tomorrow (figuratively speaking -- more like a year from now) when the resulting coins are sold on the exchanges.
