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When Is Bitcoin Dead, and When Is It Just a Bubble?

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  • Darryn Pollock
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    Speculators are declaring Bitcoin to be dead and that the market will soon fall to zero. Bitcoin’s bubble may have popped, but that’s different to being dead

When Is Bitcoin Dead, and When Is It Just a Bubble?
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Having fought tooth and nail to state that Bitcoin was never a bubble, and was never going to act like a bubble as the price of the asset shot up spectacularly based around pure speculation, it has come time to concede. Bitcoin’s pattern has all the signs of a classic bubble.

However, the naysayers of the cryptocurrency space are not content with calling Bitcoin a mere bubble: they are now declaring that the digital currency is going to die, and the market will soon be going to zero.

While the latter end of an asset investment bubble has all the makings of what would appear like the death of a market, as it rushes down to newer and newer lows, there is a big difference between a bubble pop and a dead market.

Bitcoin has many attributes that prove that this move from $20,000 to $3,000 in almost precisely a year is a bubble, and even more evidence to suggest this is not the end of the cryptocurrency. When it comes to Bitcoin, there are other factors to consider, such as mining and death spirals, as well as interest in the technology underlying it.

But as it stands, the movement of this price bubble seems to be bottoming out with a future still very much on the cards. What that future will be is impossible to tell, but the evidence is that there is future planning.

A real death

With most asset markets, there is certain specific ways in which the market can die, such as oversupply of an asset, or a loss of demand. In the case of Bitcoin, there is the ever present threat that many like to laud over: that of the death spiral.

Bitcoin advocate Andreas Antonopoulos explains:

“Some people assume that if [death spiral] happens, then a lot of miners will say ‘okay, I’m not making enough profits anymore because the hash rate has dropped 50 percent, so I’m going to turn off my mining’ which then causes to drop even further, which causes it to get even slower, which causes to drop even further, drop slower, death spiral, difficulty never adjusts,” says Antonopoulos.

However, this is unrealistic as according to him, “miners have a much more long-term perspective.”

Bitcoin is designed in a way that if there is a drop in hash, there is also a drop in difficulty, and for many miners, it is not about calling it quits as soon as things go pear-shaped, but it is rather about riding out the storm as there will always be another chance to be profitable again.

A buyers market

Another consideration to take into account is that even with the price dropping, people are viewing the Bitcoin market as a buyer's opportunity. Many feel that because the bubble has popped, this is the perfect, non-speculative time to enter in and buy up Bitcoin as a store of value.

A blockchain ecosystem

More so, with the market for Bitcoin being down and losing steam, there has been more room for a focus on the underlying technology, blockchain. Blockchain’s worth has never been questioned, and because of that, many feel that its link to cryptocurrency will help it keep going.

The latest report, titled “2nd Global Crypto-Asset Benchmarking Study by the University of Cambridge”, explained that this is a ‘delay’ rather than a death.

“The speculation of the death of the market and ecosystem has been greatly exaggerated, and so it seems likely that the future expansion plans of industry participants will, at most, be delayed.”

It further reveals few key findings that involve:

“Total user accounts at service providers now exceed 139 million with at least 35 million identity-verified users, the latter growing nearly 4X in 2017, but most remains passive. Additionally, individuals constitute the largest share of the user base.”

“When it comes to mining, the majority of identified mining facilities use some share of renewable energy sources as part of their energy mix and mining is less concentrated than commonly perceived. China remains in the top-3 countries to host mining farms while the USA and Canada are seeing rapid growth.”

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About the author

Darryn Pollock is an award winning  journalist from Durban, South Africa. He picked up Vodacom’s Regional Sports Journalist Award in 2017 while expanding his Blockchain and cryptocurrency reach.  He is a contributor to Forbes, Cointelegraph, Binary District, and of course, U.Today. Darryn’s belief is that Blockchain technology will be the driving force of the next technological wave and it is the obligation of journalists and writers to tell its emerging story with integrity and pride.

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Bitcoin Price Forms Diamond Bottom Pattern, Signalling Bullish Breakout

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  • Alex Dovbnya
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    Bitcoin could witness a bullish breakout if its looming diamond pattern gets confirmed

Bitcoin Price Forms Diamond Bottom Pattern, Signalling Bullish Breakout
Cover image via u.today

Disclaimer: The opinion expressed here is not investment advice – it is provided for informational purposes only. It does not necessarily reflect the opinion of U.Today. Every investment and all trading involves risk, so you should always perform your own research prior to making decisions. We do not recommend investing money you cannot afford to lose.

ByBit

The Bitcoin price is on the verge of forming a diamond bottom, which represents two juxtaposed symmetrical triangles. This a major bullish pattern that could be the bellwether of substantial price gains. 

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According to cryptocurrency trader "The Moon," Bitcoin has a 70 percent chance of a bullish breakout if the aforementioned pattern gets confirmed.   

That said, Bitcoin would need a huge buying volume for this scenario to translate into fruition. 

Trading vet Peter Brandt noticed that the XRP/BTC pair was about to complete a diamond bottom. However, Ripple's native token failed to rally even before the much-awaited SWELL event that took place on Nov. 7-Nov. 8.     

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As reported by U.Today, BTC dropped to the low-$8,000 level due to lack of enthusiasm on the buyer's side who failed to step in to reclaim $9,000. At press time, the coin that started it all is changing hands at $8,165 after being rejected at $8,200. 

Given that Bitcoin has trimmed all of its recent gains, market sentiment is now predominantly bearish. It remains to be seen how long it will be able to hold the crucial $8,000 support.      

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Earlier, market analyst Willy Woo claimed that BTC's bearish price action ahead of the halvening event could mean that it might not witness another bull market. 

Subscribe to U.Today on Twitter and get involved in all top daily crypto news, stories and price predictions!

About the author

Alex Dovbnya (aka AlexMorris) is a cryptocurrency expert, trader and journalist with an extensive experience of covering everything related to the burgeoning industry — from price analysis to Blockchain disruption. Alex authored more than 1,000 stories for U.Today, CryptoComes and other fintech media outlets. He’s particularly interested in regulatory trends around the globe that are shaping the future of digital assets.

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