In early Feb many people expected a crash, because the insane growth in late 2017 was primarily due to speculation, wasn't sustainable, and hence a "bubble burst" would occur.
So BTC crashed to $6000 after a series of bad news, FUD etc. Seemed to be like a bubble burst for real.
But, the reversal from $6000 until now is already 100%. And the trend is still up, up... with this current growth rate BTC will hit $20000 again in early March, and $100000 around July.
BTC's growth stayed fairly sane (for crypto) until USD 10,000,- was broken, at which point the market went into mania. So while the growth from USD 10,000,- to USD 20,000,- was incredibly unhealthy, USD 10,000,- still seems like a fairly good starting point for future growth phases. Apparently the market agrees for now.
The BTC price had to bottom out
somewhere, so naturally when what seemed to be the bottom was in -- ie. the market didn't fall any further beyond what was a critical level, since USD 6000,- proved to be a lower bound in November -- the market got more relaxed and people started buying in again. Question being whether this reversal is for real or just a huge bull trap.
If you look at the current state of BTC blockchain:
- number of transaction going down to November 2015 level,
- number of active address going down to early 2017 level,
- median transaction value going down to September 2017 level,
- only average transaction value is growing this month
And google trend showing search of "bitcoin" going down.
What do these indicate:
- Public interest in bitcoin is not growing, or even decreasing.
- Bitcoin adoption is declining, fewer people are using bitcoin.
- But a small number of people are making very large (and increasingly larger) transactions.
1) Public interest and media coverage increases as Bitcoin's reaches new ATHs. Same with when a crash happens. No media outlet cares about Bitcoin moving sideways or slightly recovering.
2) Transaction count is currently down roughly 20% from July to October 2017 levels, active addresses are down roughly 15% from July to October 2017 levels. Naturally both are significantly down from December levels, but that was one crazy month and mostly an outlier. Neither implies that Bitcoin adoption is declining in a meaningful way.
https://blockchain.info/charts/n-unique-addresseshttps://blockchain.info/charts/n-transactionsThat is not to say that there weren't road blocks along the way. Just that actual backsteps concerning Bitcoin adoption -- for example Steam getting rid of Bitcoin payments -- are barely reflected in the transaction count. Transaction count appears to correlate stronger with major price movements rather than merchant adoption.
3) I'm not sure what transaction size implies. Could be whales conspiracing in market manipulations. Could be people taking the opportunity of low fees to move their stashes from legacy to SegWit addresses. I lean towards the latter.
Despite less adoption, bitcoin is going to hit $12000
At the same time most altcoins are either going down or no growth. Yes shitcoins should go down when people start to learn, but even the promising ones with good progress updates recently are not growing. This is in contrary to previous trends, when bitcoin goes up, altcoins follow.
Alt coins go up when Bitcoin is stable or slightly rises. When Bitcoin falls, alts fall. When Bitcoin makes strong upward movements, alts fall as well. During unstable times, people tend to move into Bitcoin over alts. We are definitely in unstable times.
Keep in mind that even promising alt coins can be vastly overvalued and the market rarely cares about good progress, unless there's an active pump going on.
This seems abnormal. I think it's an exit pump, whales need to pump BTC to sell high. After that another crash will follow.
What do you think?
I think it's the market searching for a new stable price point. Right now I expect the market to move sideways for a while, rather than moving strong in either direction.
