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On the 31st of October 2018, Bitcoin Cash made a new low of $410.10. Eight days later Bitcoin Cash had gone up 57%.
Has Bitcoin Cash made a significant market low? Is Bitcoin Cash positioned to take the crown and become the market leading cryptocurrency by market cap, and at the same time archive market dominance by following the ideology of Bitcoin’s founder Satoshi Nakamoto?
Or is it just heading for a fight?
The cryptocurrency markets got beat up this week, with pundits blaming the drop on the Bitcoin Cash hard fork and everything in between. The 5%, the most consistent investors and speculators, don’t listen to the news, preferring instead to build up their picture of what’s going on, analysing direct market feedback for evidence of shifts in supply and demand.
After a large percentage move down, the 5% are looking for a missing component, the trait that shows up at lows and is absent at highs. Fear.
Innovators and early adopters, the experienced old hands of the crypto space, who understand completely how to transfer from fiat currency into crypto and back, have a problem even their aptitude at moving funds around between multiple exchanges and wallets can’t solve. And this problem is volatility.
If you’re on a cryptocurrency trading exchange and want to protect your profits, or even if you’ve made losses and just want to get out, where can you put your funds to protect them? The most used solution may not be as safe as you think.
As the price of Bitcoin falls and the media becomes increasingly negative, the 5% look under the hood and take a look at Bitcoin from a fundamental perspective. As Bitcoin matches the prior percentage drops from the previous three price bubbles, is Bitcoin in terminal decline or is Bitcoin’s price action giving an inaccurate prognosis?
The term “bubble” is used anytime an asset’s price is driven, by speculation, far away from its intrinsic value.
In the last twenty years, we’ve had an unprecedented number of bubbles. Tech stocks in 2000. Real estate in 2006, Debt in 2007, Bonds in 2013 and Bitcoin in 2017.
Maybe it’s a new technology or a more efficient service, perhaps it’s a scheme where, if successful, it could change your life, but whatever it is, and whatever it does, the behaviour is always the same.
When faced with uncertainty, human beings have a tendency to search for the opinions of others, and in precisely the same way, when we open a curiosity gap, it’s known that we experience a strong need or desire to close the gap. Just like the uncertainty pattern, the curiosity gap pattern has been used to manipulate the crowd into action.
You might be thinking that exploiting the crowd using these tactics is a new phenomenon? It’s not.