How to justify the price behaviour (trend)

[sebasfac]

Hi guys.
I always thought the price of bitcoin was increasing exponentially since the beginning(not counting volatility and other kind of cycles). And it would make sense because, the positive growth rate of bitcoins is decreasing with time.
But...the truth it is that the growth rate of the value of bitcoin(in dollars) is somewhat steadily decreasing if you look at long term trend.
Actually, the peaks in the growth rate of the price are getting lower and lower.
Maybe the trend does not matter because maybe in the future the trend would be other one, but the truth is that at the beginning of bitcoin, the growth rate of the price of bitcoin was very high, and so do the supply of bitcoin! For that to make sense, the demand would need to be very very strong. At the same time, bitcoin is very popular now but the last boom was relatively weak if you look at the relative change (growth rate) of its price compared to booms in the past.
The theory says that the data is an anomaly (or there are unknown extra factors at play?), and it's true that in some year, the price behavior was very weird, as if bitcoin was starting to stagnate in value.
But, overall, it seems to me that the data says that the growth rate of the price is stabilizing. Which is weird because the growth rate of the quantity of bitcoin is much lower than the past and bitcoin is popular like hell and people should actually get eager to buy.
I wanted to hear some thoughts on this issue. Personally, I take the data with lots of salt, but even so, i think it does not make much sense the behavior that i just described.(Again: with the growth rate of supply of bitcoins being much lower than the past, price change is far from maximum. That maximum was actually when the growth rate of the supply was very high!)

[1715283875]

1715283875

[davis196]

I don`t care about the "growth rate of bitcoin supply",because there are many HODLers,who are hoarding big amounts of btc.Those amounts of btc are "outside" the market and they reduce the overall btc supply.
OP,just don`t compare the BTC price growth with the BTC supply growth.It just doesn`t work that way.
Don`t try to analyze the market based on historical charts and price behaviour.
The btc price is where it is,and don`t bother trying to explain how the btc growth is decreasing.The BTC price can explode at any time.

[timerland]

The percentage growth in bull markets has actually not been slowing down. The 2017 bull market was actually 'bigger' percentage wise, compared to the 2013 bull market.

I do expect the markets to stabilize in the long run, though, and volatility wouldn't be as prominent as it is right now.

But overall volatility has definitely been slowing down. The market has gotten bigger and will get bigger. Obviously it was easier to buy even $100 worth of bitcoin and move the entire market back in 2010 or something like that, because of the fact that the entire market cap is simply so small. That's why you see prices move way faster a few years back than it does now.

[bigmaster23]

your perfectly said it your not just imagining this the value of bitcoin over dollar have exponentially recover from its previous point of 15k over the past months how could we be so blind about something important we just let it slip like a water through our palm.

[richardsNY]

I do expect the markets to stabilize in the long run, though, and volatility wouldn't be as prominent as it is right now.

With the market becoming more of an open field for institutions, especially with side markets (futures, etc) gaining more importance, the volatility will definitely become less extreme. Currently dumb money is moving the markets, in good or bad times, and that definitely has to change. Dumb money is the main reason we experience volatility -- the smarter the money becomes, the less active the market is, and the more TA kiddies will be able to utilize the market in their advantage. Equal mindedness is a very important aspect of any market, and this will allow Bitcoin to become a better currency overall. Stability is a must.

[sebasfac]

The percentage growth in bull markets has actually not been slowing down. The 2017 bull market was actually 'bigger' percentage wise, compared to the 2013 bull market.

I do expect the markets to stabilize in the long run, though, and volatility wouldn't be as prominent as it is right now.

But overall volatility has definitely been slowing down. The market has gotten bigger and will get bigger. Obviously it was easier to buy even $100 worth of bitcoin and move the entire market back in 2010 or something like that, because of the fact that the entire market cap is simply so small. That's why you see prices move way faster a few years back than it does now.

True. I think the point is that i am confusing rate of supply of bitcoin with selling the bitcoin. Before a bitcoin is sold, it has to be created, and that does not diminish its value… So the point is about market cap that was very low at the beginning. It all makes sense now.


I have another idea, which maybe is a bit off-topic. Let me explain:
 If the ratio of total bitcoin value of usual holders per total bitcoin value of criminal holders gets too high. There is, in my head, the possibility that bitcoin can start to really fall in value after some boom (that occurs from 2 to 2 years +/-). The idea would be that usual people, including, i don't know, JP Morgan desks or whatever and other actors, (institutions' behaviour are the big unknown here), after a boom, would start to sell their bitcoin positions like crazy just to hedge/short (to buy them only when they are very cheap), and this effect would be stronger than what is to me the great hodler of all, the criminal person, that does not want to short and prefers to stay more quiet and hold in bitcoin everytime.
I mean, i know this is very anti-market ideas but in financial markets, things can get messed up very quickly if the market is irrational as a whole, which is happens, even if many people do not want to admit. So the idea is that, at some point, that ratio would be so high, that, it would be possible that bitcoin could reverse the long term trend. (yeah, i know, HUGE hypothesis) Anyway, in extreme, the price would get back to the earlier level, and then the long term trend could change again (to positive growth), so, not so biiiig deal after all.

In the end, it is just a theoretical possibility. We have had great busts after the booms, but my point is that those busts can be a lot greater in the future, if more and more bitcoin holders start trying to short.
PS: I think we are experiencing the second major (in relative terms) bust since the beginning.

[wantjokull]

I think we are missing many pieces here which can keep up the bitcoin growth rate to steady level all the time. Look at the supply and look at the demand. Supply is ideally decreasing as we move in the time however demand should increase as we move along. Both of them are getting successfully excepted here but its somehow keeping the growth of bitcoin from happening with the time. I cant explain or no one can explain why the current mega dumps are going on even when people know that its something big when considered for the long terms. Hacks and stuff is okay, but in bigger picture it should have been going up and not coming down.

[Poortorich2018]

No one can justify the price of bitcoins. don't expect that the price of bitcoins is always in the highest level of value but expected that will be like a heartbeat. will going up and sometimes wipl going down. maybe last few months the value of bitcoins is so high but now is very low value , but is not in the negative situation but it is the opportunity to invest more money to bitcoins because when it will be going up . the value is so high. this is the kinds of lifestyle when you are in the business area.

[sebasfac]

I think we are missing many pieces here which can keep up the bitcoin growth rate to steady level all the time. Look at the supply and look at the demand. Supply is ideally decreasing as we move in the time however demand should increase as we move along. Both of them are getting successfully excepted here but its somehow keeping the growth of bitcoin from happening with the time. I cant explain or no one can explain why the current mega dumps are going on even when people know that its something big when considered for the long terms. Hacks and stuff is okay, but in bigger picture it should have been going up and not coming down.

The current bust seems a very very natural thing to occur. Just look at the log of bitcoin daily prices to see that busts are common, and the current one is big but very similar to old ones. And would not be very unlikely that the bust continues some months more…

https://data.bitcoinity.org/markets/price/all/USD?c=e&r=day&st=log&t=l

[Combi]

what I think is how I get a lot of bitcoin and I will sell it, for a trend problem I do not care about it

[Silberman]

Hi guys.
I always thought the price of bitcoin was increasing exponentially since the beginning(not counting volatility and other kind of cycles). And it would make sense because, the positive growth rate of bitcoins is decreasing with time.
But...the truth it is that the growth rate of the value of bitcoin(in dollars) is somewhat steadily decreasing if you look at long term trend.
Actually, the peaks in the growth rate of the price are getting lower and lower.
Maybe the trend does not matter because maybe in the future the trend would be other one, but the truth is that at the beginning of bitcoin, the growth rate of the price of bitcoin was very high, and so do the supply of bitcoin! For that to make sense, the demand would need to be very very strong. At the same time, bitcoin is very popular now but the last boom was relatively weak if you look at the relative change (growth rate) of its price compared to booms in the past.
The theory says that the data is an anomaly (or there are unknown extra factors at play?), and it's true that in some year, the price behavior was very weird, as if bitcoin was starting to stagnate in value.
But, overall, it seems to me that the data says that the growth rate of the price is stabilizing. Which is weird because the growth rate of the quantity of bitcoin is much lower than the past and bitcoin is popular like hell and people should actually get eager to buy.
I wanted to hear some thoughts on this issue. Personally, I take the data with lots of salt, but even so, i think it does not make much sense the behavior that i just described.(Again: with the growth rate of supply of bitcoins being much lower than the past, price change is far from maximum. That maximum was actually when the growth rate of the supply was very high!)

I do not see why this is a mystery to you, what do you think it is easier that a coin with a market cap of 1 million doubles its price or that a coin with a market cap of 1 billion doubles its price? It is obvious the first option is easier, you will need 1000x times more money to double the price of the second coin, this is why it is getting harder for the price of bitcoin to keep climbing since it is already very expensive.