Bitcoin — Is It Time to Sell?
Wow, Bitcoin didn’t just break its previous all-time high of $160. But it went well above it. Nearly $1k per Bitcoin!
Despite the 50% dip after that initial run up, prices still continued far beyond anyone’s wildest expectations. But it happened only after a serious 50% dip.
Sound familiar?
As it stands, we are currently 50% down from the previous all-time high. Summer months have historically been bad for the price of Bitcoin and cryptocurrency as a whole.
Bitcoin’s price got slaughtered going into summer both in 2013 and this year. And both times, it was roughly a year after the halving.
But, if history repeats itself, there is a very strong possibility that we see a massive run up towards the end of the year.
Not only would this suggest the stock-to-flow model is correct, which predicts $288k Bitcoin in this bull run, but it would also follow a similar timeframe to the 2013 cycle.
But there’s one more piece of evidence that makes me think this could be the case.
We can use Google Trends to see roughly how many people are searching Bitcoin at any given time.
Everyone’s big fear right now is that this bull run is a repeat of the 2017/2018 cycle. Where every cryptocurrency saw ~90% drop in price followed by 3 years of stagnant prices.
But if we look at Google search volume for Bitcoin, we’ll see that it fell off a cliff in early 2018. And it stayed low for a long time.
Now, we can compare the search volume to how it looks right now. Notice that there is a significant dip. But it’s still holding strong. There is still interest in Bitcoin baby!
This means that people are still searching Bitcoin. There are still new people learning about it, buying it, and storing it.
And all those new people gradually increase the price. And may trigger another run-up later this year. Similar to what happened in 2013.
At the end of the day, none of us can predict what Bitcoin will do. We’d all be rich if we could.
But we can study the data and make an educated guess on what is going to happen. There’s quite a bit of data that makes me think Bitcoin will break a new all-time-high later this year. Maybe even in 2022.
But at the end of the day, nothing is guaranteed.
Bitcoin could get hacked. And the price goes to 0. Joe Biden could criminalize Bitcoin and crash the market. Nobody knows what will happen.
Personally, I’m treating this summer as a good time to be dollar-cost-averaging into cryptocurrencies as the prices continue to drop.
The community gets bigger every day. And even if Bitcoin doesn’t see another run up at the end of the year, it is only 2024 that Bitcoin has another halving event.
Published at Mon, 28 Jun 2021 01:27:02 +0000
