The short answer is yes, and I will show you exactly how and why.
Many people in the crypto space right now are asking themselves the same question. "Is Bitcoin a bubble?" and the real answer is YES and NO. The statistics and math show that Bitcoin prices have entered bubble territory and were way above expected ranges. The fundamentals suggest that prices way above what we have already seen are definitely possible.
First let us define what a bubble is, according to Investopedia.com:
"A bubble is an economic cycle characterized by rapid escalation of asset prices followed by a contraction. It is created by a surge in asset prices unwarranted by the fundamentals of the asset and driven by exuberant market behavior. When no more investors are willing to buy at the elevated price, a massive selloff occurs, causing the bubble to deflate."
Here are the common phases of a typical bubble
And this is what Bitcoin's chart looks like right now using a 3-day interval for bars:
Now the two pictures overlaid:
Do you see the resemblance? Increased media attention, greed and irrational exuberance has lead the market to unimaginable highs- which ultimately proved to be unsustainable. Regulation, profit taking and market manipulation have finally popped the bubble and the market seems to be in a freefall.
It appears that we are in the "capitulation" phase right now leading into the "despair" zone.
Now here are the Bitcoin charts with Bollinger Bands so we can see some ranges and averages:
Now the big question is where will we bottom out?
Depending on how you look at it the "return to mean" phase could be anywhere from $10,000 to $14,000, if we have in fact hit the bottom. Other charts and indicators suggest that we could see prices fall as low as $6-7K again before finding the much needed support.
One thing I know for sure is that just when you think it's over something else suddenly happens. I truly believe in the fundamentals behind this new technology and know that it will revolutionize the world. There will undoubtedly be many speedbumps during the way so be prepared. I'm along for the ride no matter what comes our way :-)
We will continue to see many more of these "bubble" cycles over Bitcoin's lifetime, each greater than the last.
Check Out My Last Bitcoin Post:
https://steemit.com/bitcoin/@hotsauceislethal/bitcoin-price-forecast-2-1-2018
Feeling Salty About Missing The Crypto Boat?
https://steemit.com/bitcoin/@hotsauceislethal/how-to-conquer-fomo-fear-of-missing-out
Don't Worry:
https://steemit.com/bitcoin/@hotsauceislethal/bitcoin-s-hype-cycle-is-finally-here
Fantastic Documentary About Relevant STUFF! (MUST WATCH!!!)
https://steemit.com/cryptocurrency/@avii/mind-over-money-documentary
Like Bitcoin But Want To Avoid The Fees?
https://steemit.com/bitcoin/@hotsauceislethal/save-money-when-sending-crypto
Pay No Transaction Fee From Coinbase!!!
https://steemit.com/bitcoin/@hotsauceislethal/no-transaction-fee-bitcoin-trick-using-coinbase
Need A Good Laugh?
https://steemit.com/bitcoin/@hotsauceislethal/what-kind-of-crypto-trader-are-you
Why STEEM Is Going To Be A Powerhouse In 2018
https://steemit.com/steemit/@hotsauceislethal/steem-is-the-most-used-blockchain-in-the-world-still-highly-undervalued-and-underrated
*Never invest more than you are willing to lose and always do your own research before making any investment decisions.
(All pictures are free domain images from snappygoat.com or created by myself.)
