Topic: On evolution of prices (Read 592 times)

It feels like a good time to restart this thread and reflect on the recent price action

What became evident during the last couple of months is that top altcoins started to attract more money, thereby putting Bitcoin on a low-calorie diet (if not to stay on starvation). This can be seen by trading volumes, with those of altcoins surging while Bitcoin's going down up to a point where we can see coins like Ethereum and EOS often outperforming Bitcoin in terms of trading volume (at least, that's what I see at Bitfinex)

I had written about that in the past (that we are going to see more action in altcoins in the coming months) but back in the day it was more like an assumption, while today it is a confirmed fact. The implication of all these recent developments is that we are likely going to see more volatility with Bitcoin in the near future. There are at least two reasons for this conclusion that I came up with

First of all, more money flowing into altcoins means less money flowing into Bitcoin (as there's only so much money in the market, give or take), the result being that there is less liquidity in Bitcoin making it more susceptible to severe price swings. Then, there is also a positive feedback loop via which price action in altcoins also causes some price action in Bitcoin. Most of the time it works in the reverse order but now the direction has changed

If you agree (or disagree, for that matter) with this outlook, share your thoughts below

Strictly speaking, we don't know that for certain

As what we saw in 2017 may well have been a one-time event, i.e. a lifetime opportunity to earn via cryptocurrencies (and get done with them). Indeed, the market may recover eventually but it is not very likely that the hype that you mention is going to come back, at least not in the near future (and then it will be a new hype)

Apart from that, it is not completely impossible that won't go lower as the bear trend doesn't look over at all. With that said, I agree that some could return after we get to 10k and beyond but we should first get there which seems like a daunting task on its own

The only pattern that I see that can be repeated is that of the uptrend, distribution, bearish trend and accumulation, where I can say that we are in the accumulation phase, is what I can rescue if we look for some pattern, but in terms of prices it differs totally, the conditions of 2017-2018 are very different from those of now in 2019, there are many more investors, more participation of new people, which, the conditions have changed, maybe 20k is only a roof that can easily be broken when entering in phase of uptrend.

For consecutive years, price pattern is obvious when you base on charts and price history and this made the cryptomarket on trend. It really gives a hint of price in the future, however it's not always happening like what happened on 2018, there's a lot of speculation that bitcoin will hit more than $20000 but it did not. That event gives the people of how cryptomarket can be deceivable.

I don't think that fundamental would sustain price , it can only cause a astronomical move at that time and later price will go back to bases. By the way, fundamental is news if I may be correct.

Maybe the lost in interest is true but it doesn't always become a permanent loss of interest, it is the loss of interest for now.

Basically, someone who got burnt during the 2018 horrible year will probably leave bitcoin for a long time, it will not return to bitcoin to check day to day stuff, will not check prices or news or developments.

Moreover, believe me many of them will return when bitcoin goes above 10 thousand, same happened to a friend of mine for example during the 2014 deal, he was around here almost everyday and decided to quit during the fall to 200 dollars and I understood that, was expectable yet he came back when bitcoin reached back to over 1 thousand dollars (good timing).

Hence, do not expect all the hype that there was and we lost is gone forever, it will probably come back.

The story may somehow always be repeated, but the times when they happen due to the conditions are different, could focus on what a fundamental analysis is concerned.

And the prediction of a technical analyst always makes reference, I think that the price is built in the case of the market with a basic scheme of Accumulation, Trend and Distribution, henceforth both analyzes should be taken into account to have an idea global how can you build the price, since its value can be given by a fundamental analysis.

The first approach is completely unviable in case of cryptocurrencies. 9 out of 10 times I see technical analysis fail in crypto markets. Unpredictability in crypto market is too high due to lack of regulations and less number of market participants. So approach one is wrong.

Coming to second approach, you say less deviation means market is maturing i.e. adoption is increasing. I doubt it too. Market isn't deviating because investors aren't speculating at the moment. If we see real increase in volume, it is somewhat similar to what was in late 2017. Hence there is almost 0% growth in bitcoin trading volume in last 20-25 months. So stagnation in bitcoin price can't be seen as good sign.

I think history is really important and necessary to judge the market in the future. because past data may be repeated again because people are often in the habit of repeating things that make them feel successful.
so record past events to get an effective strategy in the future. That is also the way I come up with strategies to make money.

Really, I am torn between these two. I want to believe that history may repeat itself but from what is happening right now it seems we are directing to other.

With just little upward movement some easily claim that it's the start of bull run even if it's not, hence they're stuck in the belief that what happened before can happen anytime now.

It will be better I guess if we lessen the speculation and just focus in the current state and that will contribute more.

But isn't it exactly what we see with cryptocurrencies right now?

Apart from sudden bursts of activity as witnessed recently, it doesn't feel like there is much interest in crypto presently. Basically, the price is stuck specifically due to loss of interest from bulk investors as there is no demand to drive prices higher but there is no supply either to press them lower. Indeed, speculators are losing interest and this turns into a self-supporting cycle (also known as death spiral in certain circles)

And it also explains these abrupt surges, which can be thought of as an exception confirming a more general rule. Really, if both supply and demand run dry, it doesn't take a lot of financial muscle to move the price in either direction (and still less when we talk about altcoins). And this is what we see as someone (or a group of someones) adds fuel to the cryptofurnace now and then. But this is not real action

Good question. I think that both of these approaches have the right to life, but I cannot unequivocally answer your question because I think that everything depends on the asset. As for cryptocurrency, here I am probably for the first approach, because I see that cryptocurrency can have a good future and the blockchain continues to grow rapidly. those. interest from investors and crypto-intellectuals does not fade away. The second approach usually means that when the asset loses the interest of investors. This is often observed in the stock market when interest is lost to the company's shares. Speculators come out of it and the liquidity of trading falls so much that the price can stand still for years.

It's been a while since the question raised in this topic had been discussed here. Now that we have seen Bitcoin to rise and fall (once again), it seems appropriate to continue this discussion

At first, it looked like we are no longer in the narrow range when we first went over the 4k level. People who were bored to death by stagnant prices for well over a month felt euphoric. It really felt like we were on the way to get resurrected and live again soon. Now we are back to square one

Well, technically, we didn't return to our previous tight range of 3.5k, give or take, but does it make any real difference if we are going to get stuck in the new tight range for the next couple of months? So what is your take on the recent rally? Was it for real or was it only a minor aberration in the current "boring" state of affairs in crypto?

Does it change anything in the "tight range forever" paradigm as described in the OP?

Historical price data is important, but it is not a definitive indicator of what will happen in the future. You have to pair that with the circumstances and the environment in which this occurred at a specific time. Bitcoin price movement has always been tied to specific events, like : Halving / Forks / major hacks etc.

People should analyse and predict price movement based on events, if these events can be pre-determined in advance.  

Isn't it essentially six of one and half a dozen of the other?

Regardless, it seems to me  that you are misusing the term adoption or misunderstanding what it actually means. With adoption, Bitcoin is not bought or sold (as this is what speculation is all about). Adoption is about real use of Bitcoin, for example, as a means of payment (or as a value transfer vehicle in real life) when things are bought and sold for bitcoins. Indeed, you can say that when I'm buying something for it, I'm basically selling my bitcoin (and vice versa), but this is a poor man's excuse if you ask me

right, the total cumulative of the buyer is what makes the price go up. but with the increasing number of bitcoiners, it means opening opportunities to increase market capitalization, especially the big investors who enter

i am not saying people are going to buy more bitcoin i am saying more adoption means more people and more bitcoin is being bought in total.
for example if we have 100 bitcoin and 10 people buying it, price would be at $1 with adoption the number of people grows to 50 so now there are 50 people buying 100 bitcoin and with it price goes up to something like $3 and so on.

that is what adoption means not the same 10 people buy more shares of the same 100 bitcoin. that is called being at a cap and no more growing.

That's the problem with your ways

Basically, you are looking at only one aspect of something without taking into account other aspects, which can be even more important for the issue in question (read, you don't see the whole picture). For example, you seem to agree that old farts will be spending their long-stashed coins but you evidently don't think about what happens to these coins later

Obviously, they don't disappear as someone receives them, right? But this is how new users will be acquiring bitcoins. So they don't necessarily need to buy them. And why would they, really? Do you buy dollars or whatever to spend them? After all, if we talk about real adoption, it has little to do with trading and speculation

about the evolution of prices that change changed now I think a lot and the shortcomings of the price of bitcoin this year are quite severe

you're basically saying you don't expect adoption to occur then, just that old users are spending coins.

if adoption is actually increasing, new users need to get their bitcoins somewhere. a small minority might mine them (by buying hardware and electricity) or accept payment for goods/services. but traditionally for most people, using bitcoins means buying them first.

you don't expect new users?