Long term perspective is generally even more difficult to predict. Based on how peak/correction cycles played out historically, I would be extremely surprised if we've already seen the end of the correction. Late January/Early February is more likely based on how previous corrections played out wrt time. Price targets are difficult because it all depends on whether the December 18 low was really the bottom, or just an intermediate step in a larger more forceful downtrend, or alternatively, a long drawn out decline. I still see the possibility that daily SMA100 was active as support on that crash, and the final capitulation will be higher than the low of December 18, but that's not a strong conviction I hold, at best an informed guess.
It doesn't seem like you've factored in the kinds of changes - "mass-adoption" (or at least evolving mass-awareness thanks to increased media coverage), developing services, etc. - that have led to some calling this the "tipping point" for Bitcoin. Of course it is impossible to give precise mathematical indicators in this respect but qualitatively speaking things are not the same now as they were historically. That said, the December 18 low of $450 fits well in comparison with history.
We are nowhere close to mass adoption, not by a long shot. I just spent dinner with my extended family where there were five middle aged wealthy men attending (not overly wealthy, just have nice jobs, equity in their homes, investments, et cetera). Not a single one of them knew anything more than Bitcoin by name. NONE of them were interested at all in investing in Bitcoin, too risky, too strange, to difficult to even understand for them.
I spent 15 minutes discussing Bitcoin with the most open minded of the bunch. He wanted to know what he would do to even buy a single coin. Holy crap, what method was I going to suggest to this guy who can barely get Skype to work correctly. I chose a paper wallet and Local Bitcoins. He thought it was reasonable, however, i could tell by the look in his eyes there was no way in Hell he was going to invest a single dollar any time soon.
The masses ARE NOT early adopters, they will not do research, take a chance, learn about digital wallets, trust some web site exchange or anything of the sort. If it isn't offered by their broker, or banker, or something they can buy at the local Gold dealer, then they are not interested. BITCOIN right now seems a world away from this mass adoption. A WORLD AWAY.
We are still in speculative, niche phase that has a long way to go to play out. It is the biggest reason Bitcoin can fail because if another Crypto steps in and solves these access problems look out. Guys like those in my family DO NOT care about the virtues of Bitcoin's distributed, non-regulated, anti-govt protocol. They will invest in the first thing that is 1) accessible 2) available to them through standard channels 3) endorsed by things they trust: banks, govts, large companies.
That said the price may go to $2000 in the next month
, or $200....
Confession: Permabull.
These people do not look like potential early adopters to me, and they are ok, we are ok. There are billions of people in the world, and we need only a tiny part of those people to be adopters at this point, just a few more than the number of people leaving bitcoin.
I can not predict the short term price development, and I think noone can. Here is why: Many of the current users are unsure about the future, and they look over the shoulders of the others to try to find out. A bunch of people having their own opinion that changes, and at the same time trying to guess what the future change of opinion others have (and guess what others guess that the others guess...). That makes the price a chaotic function.
Rpietila and others are right in that there is an underlying exponential function for the long term, based on number of users and what value each users want to have in reserve. But we do not know the parameters of that function (the start value and the increase per time period). It could be far lower than the historic price. The actual price can also be lower than the baseline, due to speculation, just as well as it can be higher. The baseline is purely theoretic, and it will never be possible to prove what it is.
So there is room for more lows. I just don't want to set my coins at risk.
