We all know that no one can really predict the value of bitcoin. The volatility is to high and we could lose our investment even in a day. With the bloodbath that we experienced few weeks back there are lots of doubts and fears coming in. Is bitcoin's value really manipulated by whales? or its just that, most of the investors shifted to a different investment vehicle?
I really think the adoption of bitcoin is increasing everyday, but why is the value is not going on a bull? Please enlighten me guys! Thanks!
these are just natural market cycles. pull out a long term bitcoin price chart from 2010-2018, and switch it to logarithmic scale. you notice how it goes up and down over and over, but the long term
trend continues upward?
you can think of that long term trend as the "mean." what happens during the bubble cycles is that buying demand skyrockets faster than supply can come to market. the price goes up "too far too fast." at the top of the bull cycle (in this case near $20k), there are usually very few buyers left, and the order books are thin. so price swings back down like a pendulum. then you enter a distribution cycle---a correction or downtrend---where early investors and traders need to take profits and exit the market, while late investors are trapped in losing positions. both groups pressure the price downward. we are "reverting to the mean" as stock traders call it, going back to the long term trend mentioned earlier.