Reverse Bubble 2021 (burst on October)

[Poker Player]

Interesting post. What is not 100% clear to me is how to calculate the "intrinsic value". I guess taking the S2F as a model for example. In the stock market there is a rough consensus on how to calculate intrinsic value based on evolution of cash flows, debt, equity, etc. but I think regarding Bitcoin there is no such consensus.

[tokeweed]

Be careful of the bounce cos it could just be a dead cat bounce.  There are prolly more people who want to get out rn but they’re waiting for a better price to sell.  I mean I’d like to see the market recover but I feel like it’s over guys.  I should’ve listened to my gut and shorted the day when I started posting those inverted BTC charts.  Lol.

thanks for the reference, honestly I don't think there will be a dead cat bounce,
but this can help with what the BTC scenario is going to be, if it is analyzed Bitcoin must be in the $ 45k to $ 50k area to be safe and can continue its positive trend,
but if still like this and being under $ 40k this is really prone, yeah beware

I still think it’s a dead cat bounce.  But I don’t really care much rn.  I’m down and I’m not willing to even think about grinding it all back again atm...  Maybe in a week or two.  But I wouldn’t mind seeing it trend back up like what it’s doing now tho.  Lol.  

[uninterestedparty33]

So...a bubble.

A reverse bubble would be unrealistically low prices.

[jostorres]

Obviously we are talking about a chart and that is why there is really nothing I can put a counter-argument about the chart itself. However one thing is for sure, history doesn't have to repeat itself constantly there is nothing that says something that happened in the past will not happen in the future but there is nothing that guarantees it will happen neither.

This is why I believe if we will have the same thing we may end up having the same thing but there is a good chance we may not have anything at all that resembles this. Which is why we should not be considering this as the same thing. I believe there was a huge correction but we had a good amount of recovery already and we are looking bull run once again that is what it matters and as long as we do not crash again that's fine.

[pooya87]

Although you did not mention the reason for these bitcoin price bubbles, but I think the news is the first reason, unfortunately the cryptocurrency market is now being managed on social media and this is really painful.

I wouldn't say "manged by" specially for bitcoin but news, FUD and manipulation have always been part and parcel of the cryptocurrency market, more so for altcoins. The recent crash was due to a widespread FUD campaign about bitcoin with old topics such as "energy consumption" and "China bans bitcoin".

Interesting post. What is not 100% clear to me is how to calculate the "intrinsic value". I guess taking the S2F as a model for example. In the stock market there is a rough consensus on how to calculate intrinsic value based on evolution of cash flows, debt, equity, etc. but I think regarding Bitcoin there is no such consensus.

You are right and computing the "intrinsic value" of anything has always been very difficult. People have come up with all kinds of stuff to come up with an estimation. For bitcoin some even used the "production (ie. mining) cost" which is completely wrong if you ask me because how much it costs to mine bitcoin depends on the price not the price depending on cost.

[michellee]

Interesting post. What is not 100% clear to me is how to calculate the "intrinsic value". I guess taking the S2F as a model for example. In the stock market there is a rough consensus on how to calculate intrinsic value based on evolution of cash flows, debt, equity, etc. but I think regarding Bitcoin there is no such consensus.

You are right and computing the "intrinsic value" of anything has always been very difficult. People have come up with all kinds of stuff to come up with an estimation. For bitcoin some even used the "production (ie. mining) cost" which is completely wrong if you ask me because how much it costs to mine bitcoin depends on the price not the price depending on cost.

I do not know if calculating the "intrinsic value" in the stock can be used for crypto, but I think this is one of the calculations by doing a little search.

[/quote]https://www.fool.com/investing/how-to-invest/stocks/intrinsic-value/[/quote]

No one will know when the bubble will pop.

Maybe it needs more than one month or more because bitcoin does not give the sign. The news can affect the bubble and we already saw what happened before.

[tokeweed]

^  You don’t think it already did?  Cos I really think it did and if there was to be a recovery back to the trend up, it has to happen right away.  If not, then we’re going towards bear territory and recovery would take years before a trend back up.  But that’s just me in my mood rn.  Lol. 

But here...  Take a look at the chart this way.  Is that bullish or bearish?

[pooya87]

if there was to be a recovery back to the trend up, it has to happen right away.

That is recovery from a very small drop such as anything around 10%, but after such a gigantic drop of nearly 50% the recovery will take a very long time partially because the investors would be very scared to jump back in and partially because the accumulation of cheap coins takes a long time.

If you check any similar huge dumps you can see they all take time to recover.

If not, then we’re going towards bear territory and recovery would take years before a trend back up.

If we enter a bear market (which I find highly unlikely) it won't be "years" it will be months. Because we never reached bubbles like 2017 and we haven't touched $500k yet to start the year long bear market.

[Ararbermas]

Was there a crash in 2020 ? No.

Was the crash because of covid-19? No.

Instead 2020 is the beginning of the bull for cryptocurrency because the investors and government were running out of contact and maintaining of social distance. And cryptocurrency became an investment opportunity.

i agree there no crash that happen in year 2020 wherein it became the key instead to convince more ppl to invest in the crypto market because of the pandemic reason bitcoin really achieved those all time high values and some of the projects really made a good improvement during the year.. And now year 2021 is the year that really makes the market fell like a rock.. Some says this just the beginning and market will improve more after this like what happened year 2017.  I hope its true..

[Ngemmeng]

If not, then we’re going towards bear territory and recovery would take years before a trend back up.

You don't have to worry about that. bull market does occur every few years (in my opinion every 4 years). this is part of the bitcoin cycle, and it will continue to happen forever. This cycle will give you the best time to sell and buy.

[SquallLeonhart]

we never reached bubbles like 2017 and we haven't touched $500k yet to start the year long bear market.

If my memory serves me better, in 2017 we were trading below $5k till August/September (even we were in bull trend since January) but in last 3 to 4 months we had 4x from from then ATH (not from 2013's ATH). That must be the best scenario to describe how market will react in bubble region. I mean 3x growth is nothing for bitcoin markets and the real bullish trend yet to arrive to experience the state of "bubble phase" in bitcoin markets.

The current 50% downfall must be part of bullish trend and this will definitely help the FOMO to get intensified. FOMO is the key to get us into "bubbles". We yet to see full fledged FOMO and then bubbles in 2021 bull trends.



Source: https://www.blockchaincenter.net/bitcoin-rainbow-chart

[Vaskiy]

Market seems to be holding the support trend line. $35000 in my view looks like minor resistance point. The price will probably test $37000 - $38000. Based on the support pattern we can expect the further move close to $45000 upwards and towards $25000 if the support got broken and falls back to $33000. This doesn't look like a bubble, right now it is on the edge of gaining resistance.

[davis196]

There's no such term as "reverse bubble" in the world of economy and finance.
I call the lack of balance between market price and intrinsic value undervaluation and overvaluation-not reverse bubble and normal bubble.
I assume that,by "reverse bubble",you mean that the market price of Bitcoin was undervalued in certain months.I guess that you are right about the end of 2018.However,I cannot agree that the 2021 market price of Bitcoin is facing a "reverse bubble" or undervaluation.I think that the real price of BTC is somewhere between 20K and 30K USD.Everything above 30K are the remains of the FOMO phase,before Elon Musk,decided to dump Bitcoin.

[crzy]

We are actually on a bull trap phase where we saw some up trend but the volume is not that strong anymore, it will totally burst soon and we will stay low for a while. After that, we're going into the last phase of the cycle, and when we are able to rise again a new cycle will start until we reach a new peak again, time will tell it to us, always be ready.

[Smitty Werben Man Jensen]

We are actually on a bull trap phase where we saw some up trend but the volume is not that strong anymore, it will totally burst soon and we will stay low for a while. After that, we're going into the last phase of the cycle, and when we are able to rise again a new cycle will start until we reach a new peak again, time will tell it to us, always be ready.

the bull trap phase? Why? I think this is a bear trap phase, look at the $ 30k, yes wick happened,
maybe it is a sign that the market is still bullish and really bullish for the mid term, the wick is a good sign,
because strong support is working, so if a bear trap occurs of course you have to buy Bitcoin now,
and if you look at it now is the accumulation phase, just buy and keep hold

[tokeweed]

Although you did not mention the reason for these bitcoin price bubbles, but I think the news is the first reason, unfortunately the cryptocurrency market is now being managed on social media and this is really painful.

I wouldn't say "manged by" specially for bitcoin but news, FUD and manipulation have always been part and parcel of the cryptocurrency market, more so for altcoins. The recent crash was due to a widespread FUD campaign about bitcoin with old topics such as "energy consumption" and "China bans bitcoin".

Interesting post. What is not 100% clear to me is how to calculate the "intrinsic value". I guess taking the S2F as a model for example. In the stock market there is a rough consensus on how to calculate intrinsic value based on evolution of cash flows, debt, equity, etc. but I think regarding Bitcoin there is no such consensus.

You are right and computing the "intrinsic value" of anything has always been very difficult. People have come up with all kinds of stuff to come up with an estimation. For bitcoin some even used the "production (ie. mining) cost" which is completely wrong if you ask me because how much it costs to mine bitcoin depends on the price not the price depending on cost.

I would looove to see 500k but I don’t know man.  It seems like a very tall ask.  I don’t see it happening.  But then again I never really thought BTC would break out its 2017 high for at least 10 years.  So we’ll see.

[lixer]

The current 50% downfall must be part of bullish trend and this will definitely help the FOMO to get intensified. FOMO is the key to get us into "bubbles". We yet to see full fledged FOMO and then bubbles in 2021 bull trends.

I agree. We can definitely see a good amount of increase in the price of bitcoin very soon. It is not going to be something major, it is not going to be careless stuff, it is going to be something that really shows how great bitcoin can be if we keep this up.

What we need is that this sideways needs to go on for a little while longer and if we can convince people not to sell and create a bit of small hype overtime, then that small hype will grow and grow and grow and then suddenly pops and becomes a huge increase. That is what I believe we can do if we stay calm, all we need is to keep people from selling and that only happens with good news, which means we need some good news in crypto these days. I do not know when that will happen or how that will happen but if some company or some person creates a good hype that means the price will not fall or even maybe go up.

[dimonstration]

We are actually on a bull trap phase where we saw some up trend but the volume is not that strong anymore, it will totally burst soon and we will stay low for a while. After that, we're going into the last phase of the cycle, and when we are able to rise again a new cycle will start until we reach a new peak again, time will tell it to us, always be ready.

Whatever phase it is now the market is way too hard to determine especially when the hype and Fuds happen. I temember doing charting then suddenly some tweets appears that makes the price moves faster or at different direction. The graph OP posted is a good analysis but we cant still tell whether how long we can keep on that phase since the volume can changed everytime.

[decodx]

Market seems to be holding the support trend line. $35000 in my view looks like minor resistance point. The price will probably test $37000 - $38000. Based on the support pattern we can expect the further move close to $45000 upwards and towards $25000 if the support got broken and falls back to $33000. This doesn't look like a bubble, right now it is on the edge of gaining resistance.

Likewise, I believe that the bull run is not over and that we are in the accumulation phase.
If this proves to be true it could trigger massive influx of traders and investors into the space. Which is positive for bitcoin and also positive for many other cryptocurrencies.

My call is to stay long in bitcoin for long term and buy the dips and hope for a rally.

[pooya87]

There's no such term as "reverse bubble" in the world of economy and finance.

Well someone has to come up with a name for any new phenomenon to be able to easily describe it
However as much as I like to take credit for the word I'm not the first. A random example: https://www.butlerresearch.com/july-15-2015-a-reverse-bubble/

In any case only the future can prove what this really is when we look back at the charts. Just as we now can see without a doubt that $20k by the end of 2017 was indeed a bubble.

I would looove to see 500k but I don’t know man.  It seems like a very tall ask.  I don’t see it happening.  But then again I never really thought BTC would break out its 2017 high for at least 10 years.  So we’ll see.

$500k will be the peak of the next bubble which we will either see by the end of this year or first quarter of next year and it is based on past performances with a simple extrapolation. And I don't believe the market is going to change the 4 year cycle just yet.