Cryptocurrency: Find out here and now why doubts about Bitcoin are not all founded – Mirror Mag





Has bitcoin hit rock bottom? This is plausible, but the majority of observers seem to think not. In favor of the argument that a floor has been found, there are elements of technical and on-chain analysis that, viewed from a certain angle, may support this position.

Watch the weekly candles and you can discern what could become a double bottom, suggesting a trend reversal. Proponents of bullish indices point to an indicator called the Hash Ribbon, which suggests that the miners’ capitulation is over (a positive sign), as well as the Z-score MVRV, which indicates that bitcoin is now significantly undervalued.

According to this outlook, a floor could, under normal circumstances, have already been dug, and it would not be a bad time to accumulate. But we are not in normal circumstances, and the analyzes, both technical and on the channel, are carried out in a new context. Given the precarious economic environment, it is reasonable to anticipate erratic price behavior that deviates from previous patterns.

In fact, we already saw evidence of this when bitcoin crashed to its current cycle low around $17,700 in June. This was a departure from its normal behavior, as it dipped lower than the previous cycle’s high (just below $20,000 in December 2017), whereas in all previous cycles , bitcoin’s low had remained above the previous cycle’s high.

So we find ourselves in what could be uncharted territory and we are seriously considering the possibility that, this time around, anything could happen. Those unfamiliar with bitcoin and its cycles might assume that this unpredictability has always been there, as bitcoin has a reputation for volatility, but volatility and unpredictability are not the same thing, and a lot depends on your time preference. .

Bitcoin’s volatility has actually occurred within larger, cyclical and identifiable patterns and, if we zoom out, it is these predictable, longer-term trends that have established bitcoin’s status as a as historically ascending technology.

Gloom is always in the air

Bitcoin predictions are increasingly laced with a sense of gloom (or at least short), echoing a more general sense of jitters in the markets. Read also: Is Big Eyes the next Ethereum or Solana?.

The nervousness is perhaps due to the perception (real or imagined) that established models may no longer be reliable, coupled with what appear to be one-of-a-kind political and economic events, such as the disruption of energy supplies and global deleveraging.

There are also bitcoin-specific stories circulating in the crypto space, some of which raise valid concerns, and some of which may be exaggerated.

One of the subplots revolves around Mt Gox, which recovered some of the bitcoins lost in a hack in 2014 and will soon return the lost funds to its former users, which has sparked speculation that which will have a negative impact on the price of bitcoin.

While it is true that Mt Gox is set to dump a sizable batch of once-lost coins, it seems unlikely that this windfall will be capable of crashing the market. The coins will not all be released at the same time, and furthermore, it is unlikely that everyone who is refunded will immediately sell everything they receive.

Then there are the stories of MicroStrategy and Michael Saylor, around which discussions of crypto-currencies are constant (although, to be fair, these discussions are often fueled by Saylor himself, who does not hesitate to express his point of view focused on the maxi-bitcoin).

The news is that Saylor and MicroStrategy are being sued by the Attorney General for the District of Columbia for tax evasion, a charge they deny. The resulting speculation is that this could cause MicroStrategy to liquidate some of its large bitcoin holdings, creating outsized selling pressure. However, this possibility remains squarely within the realm of imaginative theory, with too many unknown variables to be of solid concern.

Influencing factors converge

The relative strength of the U.S. dollar, which has been rising and looks set to continue to do so as the Federal Reserve remains committed to fighting inflation, is of tangible importance to the price of bitcoin. On the same subject : What is the Fantom Token (FTM)? What to know, and some FTM price predictions for 2022. The inverse correlation between the prices of risky assets and the strength of the dollar is clear and present, which constitutes a headwind for bitcoin.

This brings us to another important detail, which is that bitcoin is currently, for most investors, closely associated with technology stocks and risky assets. This could very well change in the future as more people understand that bitcoin is a unique proposition, but currently the general public’s perceptions are not quite there yet.

And then there is the increasingly tangible atmosphere of widespread bear market fear that is most intense around cryptocurrencies.

However, here we can actually see these reassuring, cyclical patterns reasserting themselves, because at this point in the bitcoin and crypto cycle, we should expect the prevailing sentiments to be feared and questioned.

Perhaps, then, in some ways, the current situation is not so unique after all. Ultimately, as always, the only critical factor when it comes to pushing prices up is the amount of money entering the crypto markets. And, while it may be difficult at this time to see where a potential influx is coming from, a future change that is as close to certainty as you can get is that new catalysts will emerge.

Has bitcoin hit rock bottom? This is plausible, but the majority of observers seem to think not. In favor of the argument that a floor has been found, there are elements of technical and on-chain analysis that, viewed from a certain angle, may support this position.

Watch the weekly candles and you can discern what could become a double bottom, suggesting a trend reversal. Proponents of bullish indices point to the existence of an indicator called the Hash Ribbon, which suggests that the miners’ capitulation is over (a positive sign), and there is the Z-score MVRV, which indicates that bitcoin is now sharply undervalued.

According to this outlook, under normal circumstances, a bottom could have already been made, and it would not be a bad time to accumulate. But we are not in normal circumstances, and the analyzes, both technical and on the channel, are carried out in a new context. Given the precarious economic environment, it is reasonable to anticipate erratic price behavior that deviates from previous patterns.

In fact, we’ve seen proof of this before, when bitcoin crashed to its current cycle low around $17,700 in June. This was a departure from its normal behavior, as it dipped lower than the previous cycle’s high (just below $20,000 in December 2017), whereas in all previous cycles , bitcoin’s low had remained above the previous cycle’s high.

So we find ourselves in what could be uncharted territory and we are seriously considering the possibility that, this time around, anything could happen. Those unfamiliar with bitcoin and its cycles might assume that this unpredictability has always been there, as bitcoin has a reputation for volatility, but volatility and unpredictability are not the same thing, and a lot depends on your time preference. .

Bitcoin’s volatility has actually occurred within larger, cyclical and identifiable patterns and, if we zoom out, it is these predictable, longer-term trends that have established bitcoin’s status as a as historically ascending technology.

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Be vigilant and consult your financial adviser before making any investment decision. Mirror-Mag cannot be held responsible in the event of bad investments. Before using any third-party service, you should do your own research.

Thomas E.
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Cryptocurrency: Find out here and now why doubts about Bitcoin are not all founded – Mirror Mag


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