A bubble occurs when the price of an asset inflates too much, too quickly. Whether oil, real estate, stocks, forex or crypto, bubbles have the same drivers and the same end game.
Most bubbles go through a predictable lifecycle. The four main phases are stealth, awareness, mania and blow off.
The law of asset bubbles is that they collapse far quicker than they take to grow. A bubble that takes 10 years to appear can blow-off in just a few months.
The “blow off” is recognized by a sudden correction against the trend that takes everyone by surprise.
There’s no mathematical rule that tells us what causes a bubble to blow off. But it’s a bit like the last flake of snow that triggers the avalanche.
If we look at the historical movements of Bitcoin, we see that it retraces for about 80-90% of the rise between a time period of 1-1.5 years.
"Most" of the retail traders are predicting btc to hit 100-150k by the end of the year and we know "most" of the people don't win in this market which is another reason for not going long on bitcoin for about a year.
With these reasons, I came to the conclusion that bitcoin still has a lot of space to the downside.
Most bubbles go through a predictable lifecycle. The four main phases are stealth, awareness, mania and blow off.
The law of asset bubbles is that they collapse far quicker than they take to grow. A bubble that takes 10 years to appear can blow-off in just a few months.
The “blow off” is recognized by a sudden correction against the trend that takes everyone by surprise.
There’s no mathematical rule that tells us what causes a bubble to blow off. But it’s a bit like the last flake of snow that triggers the avalanche.
If we look at the historical movements of Bitcoin, we see that it retraces for about 80-90% of the rise between a time period of 1-1.5 years.
"Most" of the retail traders are predicting btc to hit 100-150k by the end of the year and we know "most" of the people don't win in this market which is another reason for not going long on bitcoin for about a year.
With these reasons, I came to the conclusion that bitcoin still has a lot of space to the downside.
