Bitcoin price has been oscillating between a narrow range for about six months now, twisting around the $6,500 line like a serpent, never really leaving it.
This ‘slowing down’ phase has put investors in a bit of a tough situation. To go in or get out? Speculations are being made, conspiracies are been crafted and ripped. Bulls and bears are huddled together waiting for the ultimate move that will take Bitcoin out of the pit it has gotten into.
For example, this theory here: Inflation is about 3%. So by remaining stagnant, Bitcoin is losing some value.
By far, the bullish-run supporters are winning the debate. They have the help of history with them. The last boom and bust was in 2013/2014 after which it was nearly two years before Bitcoin started to moon again. So, it looks that history is going to repeat itself.
Here, the question rises: What’s wrong if Bitcoin settles down for a bit? Isn’t that what a good currency supposed to do?
The answer depends on where do you lie in the social order.
For traders and investors, volatility is profit. Better yet, volatility is opportunity. By correctly predicting the trends for Bitcoin, tenfold profits can be made by traders; much greater than investors who have a sit-on strategy. With bitcoin hitting a slump, the investors cannot have the right signals for action and the ensuing slumber moves on and on in a positive feedback system until a big news shocks the stocks to life. In Bitcoin’s case, it might be an ETF proposal that changes things.
‘The market is waiting for an event — gov. release of 180,000 BTC, FBI selloffs, ETF commitment. An event. No event no volatility.’ says Thomas Power, Member Board of Director at BICRA.
Prices also go up rapidly as a result of increased adoption and demand.
One way or another, volatility has to be faced.
Until the holding knowledge of Bitcoin becomes widely distributed and its liquidity improves, we will keep seeing substantial volatility in Bitcoin price.
This seems like a difficult to absorb statement as most institutions even countries have avoided Bitcoin altogether.
Not only this, media has an effect on the price of Bitcoin. Reports of ETF proposals and Exchange listing introduces the spark that keeps the market warm for a day while negative reports of ETF rejections and bans by global governments makes the coin fall off the stairs.
Regardless of the flat-lining, Bitcoin is going to jump graphs. Upside or downwards? No one knows.