The price of Bitcoin is soon 300 000 US dollars! At least when it's a measure of the trader "PlanB". He recently posted a tweet that is exploited in the crypto scene "News":
– PlanB (@ 100 trillion US dollars) September 10, 2019
His analysis indicates that the sharp increases in the price of Bitcoin have always been accompanied by a capitulation on the part of BTC miners. As the colorful dotted line now suggests, it would soon be the case again. An equally optimistic and vague assessment in another tweet of the trader: the price of bitcoin is at the highest record between 30,000 and 300,000 US dollars. There may be links between the difficulty and the Bitcoin price history. But statements like that of PLAN B are presumptuous and inaccurate.
"The story is not repeated, but it rhymes"
The problem with the Bitcoin price forecast is usually that we only have data from the past and we can try to deduce them from the future. It can work. Because if enough people see the same signals and believe in them, the forecasts are true, the successes are there.
As stated in the quote above (wrongly attributed to Mark Twain), one can try to understand the future. However, those who want to determine the future from past data run the risk of tripping over their own crystal ball. In other words, the price of bitcoin has risen sharply in the past, it does not have to do it again.
You must not confuse correlation with causality
We can also say here: It is not because two things follow each other that they are linked. The vast field of peasant rules can illustrate this:
Donnett's in September, the snow is high at Christmas.
It is very likely that it will be a thunderclap in September. It is also possible that the snow falls in December. This event occurs, however, because the other one has occurred is simply a pseudo-correlation. In other words, the events are not justified.
The same goes for cryptographic forecasts. It is likely that the price of Bitcoin will increase again. It may also be good for this to occur during, after, or before the miners surrender, and the difficulty lies at some point in the graph. But no one can prove that one justifies the other.
It is much more likely that a sufficient number of traders, practitioners and kryptonatics recognize and pass on the present difficulty as a signal. The consequence: if enough traders find the important signals (and confuse correlation with causality) and buy, the price of Bitcoin also increases. However, this is due to simple market mechanisms such as supply and demand.
Incidentally, traders are not the only ones to be caught in the error between correlation and causality. It is rather a common practice in historiography. For: the stories must be easy to tell, so they are easier for humans to digest. For example, radio was not invented so that we can get it today. It was rather a fortuitous discovery, working on new forms of military communication, then stumbling upon the waves broadcasting music for decades. Saying this in every detail, however, is pretty heavy. That is why radio was invented so that we can listen to the latest hits today.
The Bitcoin Course – It's hard to find reliable data
With the exception of previous bookings, it is important to keep in mind something important: historical data on Bitcoin prices are rare. It is already difficult to talk about the existence of one asset class per cycle over a period of 10 years. In addition, there are problems with parameters such as market capitalization, negative trading and suspicion of price manipulation. As regulators, as the SEC has said, your concerns about Bitcoin ETFs are not a coincidence. You do not want to grant an Exchange Traded Fund for cryptocurrency until the ecosystem is more secure.
In short, it is difficult to find reliable data, reliable forecasts and much more difficult.
Will the price of bitcoin soon reach US $ 3,000,000,000?
A phrase often read in the crypto scene: it remains to be seen. What to do: Observe the market, assess the status of the ecosystem and evaluate the new information to the best of our knowledge and belief. Despite the doubts expressed above, price analyzes are not done in a superficial way, they rely instead on well-known and widespread metrics, which often work. The motto is: the more traders adhere to the analysis, the more likely they will be. However, no one can say for sure in which segment the Bitcoin price will evolve in minutes.
With reliable forecasts, it's like having a needle in a haystack: finding it (in this case, the good one) takes a lot of work.