Untitled-1

For anyone that was around crypto last year when prices were rising the term “bubble” was a term that only non-believers and critics used. I was one of them who considered BTC a bubble, but I was not a non-believer or a critic. I was just competent in economics. Bubbles are not by any means a bad thing for tech. In simple terms, an economic bubble or asset bubble is an asset trading at a price that strongly exceeds the asset’s intrinsic value (natural value) for that time. This was clearly BTC last December as price has now declined over 70%. The bubble factor was one of the strongest reasons that convinced me to notify all my member to sell BTC at $18,000 and for me personally to open a short position I am still in. All the elements of a bubble were there; new technology, increase in fraud, massive euphoria.

The chart above is an excellent representation of BTC compared to other economic bubbles. After an almost 60-fold increase over the past three years to nearly $20,000 in December, Bitcoin has tumbled by about 70% percent from its peak. However, and this is super interesting, by comparison the Nasdaq Composite Index (a collection of all the major tech companies) recorded a 78 percent peak-to-bottom decline after the dot-com bubble burst in 2000. In words after the dot-com bubble crashed in came down a total of 78% before beginning its colossal rise to the highs we see today. Is BTC just 8% away from its reversal?

Want to learn all the secrets of professional traders? Join LOCglobal today for the bests signals, learning guides and live chat 24/7 chat experience with our traders.

Leave a Reply

Your email address will not be published. Required fields are marked *