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Each scenario must be analyzed, including the most negative one.
That comes off as a bit of a strong statement, because I don't really tend to analyze the more negative scenarios because currently, I consider them to be relatively low probability events, but yeah, I don't mind analyzing and considering less bullish scenarios and even bearish scenarios that become more probable because of some changes in BTC price movement momentum or even if some other circumstances might change what factors need to be considered... I mean currently a lot of the altcoins are pumping way the fuck more than I believe is healthy or to have been probable, and so if we get more into a situation of continued outrageous altcoin pumpenings, I may have to reconsider some of my framework, including considering how those dynamics could end up impacting bitcoin in either a positive or a negative way.
If we are talking about the top of the bull market in the next 4 years, we have to take into account all the factors that have influenced the price in the last 4 years.
Sure, but we also have changing factors too... We all know the expression that history does not repeat itself, even if it might have tendencies to rhyme.
The question is which factors will be absent and would affect the peak reduction. The difference from $ 175 to $ 19666 is 112x. 1/4 reduction is 28x. One factor is the liquidity of the most bearish exchange, which participates in the price formation. The other factor is the FOMO mania caused by the media at the end of 2017.
Cannot disagree with these assessments, and I suppose that you are including some of the new investment vehicles that have come into existence since late 2017, such as various BIGGER financialization vehicles, such as futures that can push BTC's price in either direction, but also exacerbate explosive BTC price movements, too.
In my opinion, the FOMO effect at the end of 2017 did not increase the liquidity. On the contrary, people went to buy shitcoins and miners because they thought bitcoin was very expensive. So the jump to 20K was something that should have happened, even slightly delayed by the numerous bans in China.
I would hate to attempt to narrow down causal relationships too much in regards to what had caused the 2017 BTC price run, and surely liquidity is NOT going to change a whole lot in a short period of time, such BTC entrance and exit vehicles as what was already in place by the time we got to the turbulent period that seemed to have kind of had its roots in the mid-2017 forkening drama that was largely resolved in BTC's favor and seemed to have had contributed to some of the outrageousness of the price moves in the BTC direction. Of course, shitcoins tagged along for that, and they might have even contributed additional liquidity avenues including some subsequent moves into bitcoin during the 2018 crashening...
Concerning liquidity, there should be signs of a decrease, expressed in lower percentage peaks than in the previous period. So far, I see no objective factors for such a huge 1/4 drop. We even have a double ahead of growth - in July 2019 and the present. After the halving, if FUD is not successful, this overtaking can only increase.
I agree and really believe that my throwing out 1/4 remains quite conservative and likely seems to be playing into considering the more bearish scenarios... even while at the same time, many of us hate to really spout out ideas that are too presumptuous in the bullish direction, even though we are simultaneously preparing ourselves for such possible outrageous bullishness by planning on NOT running out of BTC in case the BTC price goes way the fuck beyond those more conservative 1/4 talking points.
Then like last time, we can say that we were surprised as fuck that BTC performed 3x to 5x greater than our most bullish expectations. That is what happened in 2017 for me. I continued to tell people that BTC performed about 3x to 5x beyond my most bullish of expectations, but I was kind of lying too.. because if I really expected BTC to only go to $3k or $5k at the best, then I would have sold more BTC when it reached $3k to $5k or even when it went higher but I did not, and I am NOT disappointed with myself at all.
So, again, BTC prices can go flying off the handle into prices that are much greater than the more conservative 1/4 the volatility estimates, and many of us can say that we are surprised as fucked and even say that we are shocked.. as we are laughing our largely erring on the side of HODL BTC bags all the way to the bank.
However, on the one hand, the price of 349K (112x) seems too high and comes close to the price of gold. On the other hand, the way the Bitcoin exchanges operate is very different from that of gold exchanges. In Bitcoin exchanges the volatility is very high for a number of reasons. Jumps of 20-40% in one day are normal, and they are determined by the avalanche elimination of short positions. So, even without a rise in liquidity, these things happen. Of course, this cannot go on forever. At some point, liquidity may start to stall.
I doubt that anyone is saying that $350k-ish would be sustainable in the next 3-5 years, even if BTC might reach that amount... but there are likely some folks who would argue that a BTC correction back down to $30k to $50k would be considerably sustainable... even though such prices would be still part of future likely hype cycles and maybe only sustainable for a year or two before the next hype cycle..
So, yeah, bitcoin might not topple gold in this hype cycle or even the next couple of hype cycles, and maybe in 12 years, bitcoin might be looking back at gold in the "objects appear larger mirror" because there had already been some bouncenings past golds market cap on several occasions and then at some point gold is just left in the dust.. and sure it could take a bit of time for BTC to end up resting comfortably and sustainably above those gold market cap levels.
For example, at 1/10 reduction, we would have a peak of 35K (11x). To me, this is the absolute minimum, in the absence of extremely bad news/FUD that would permanently damage the market. With a 1/4 reduction we would have a peak of 87K (28x). Perhaps the most likely option is a 1/3-1/2 reduction with a peak between 120K and 180K.
I am o.k. with a 1/10 reduction too.
I like to consider myself to be more of a descriptive kind of thinker and investor rather than a prescriptive one... so I just go with the flow.. and I am already at a stage in which my plans are not going to change too much whether bitcoin is $10k, $30k, $100k or even $300k + Yeah, of course, the higher bitcoin's price, the more extravagant that I am going to live, but I am NOT going to be changing my plans very much if this next bubble ends up being 1/10 rather than 1/2 of the 2017 bubble... and I also don't think that experiencing only a 1/10 bubble is going to either destroy bitcoin or even largely interfere with its value proposition, but yeah of course, the BIGGER the bubble, the more that BIG players treat bitcoin more seriously... but in the end, I doubt that honey badger gives too many shits..
By the way, ivomm, these are thoughts off the top of my head, so maybe I am playing too much devil's advocate for my own good? I don't really disagree in a strong way to anything that you said.
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