For the last ten years of current Bitcoin history, the “first” cryptocurrency has repeatedly amazed everyone with its record price jumps. However, after each crushing fall, it was accompanied by negative news. As the Bitcoin cost soared more and more people began to have faith in the first crypto coin and the potential possibilities.
Bitcoin Day Trading Price History
History can help us understand if Bitcoin will crash or not. The first Bitcoin blocks were generated at the beginning of 2009 by its creator Satoshi Nakamoto. From that moment, the mined 50 BTC had no value. The first rate against the US dollar was established in October of the same year – 1 BTC was equal to $0.000769.
The legendary pizza was purchased online for 10,000 BTC in May 2010. In November 2010, the BTC exchange rate reached $0.5 on the Mt.Gox exchange. One Bitcoin was 17 times more expensive than at the beginning of the year, and its capitalization reached $1 million.
In summer 2011, the Mt.Gox crypto exchange was hacked, and intruders stole and publicly made available the data of more than 60 thousand customers. This led to the fall of Bitcoin in price from a high of $17 to a low of $0.01. After that fiasco, the cost of Bitcoin was in an accumulation period with a gradual build-up to $14. During this period, only one significant decline from $16 to $7 which occurred in August 2012.
A new cycle of rapid growth began in the middle of January 2013. In April 2011, 1 BTC was on sale for $266. After a period of correction, a new bull run occurred, and Bitcoin reached $1,240. This happened after some positive news regarding the possibility of being able to pay for education in Bitcoins at a couple of institutions occurred. Several online companies also announced support of Bitcoin payments during this period.
China banned cryptocurrency, and Chinese BTC exchange was closed in 2013. As a result, the Bitcoin price fall and large-scale sales of Bitcoins began. In 2014, the BTC exchange in China resumed its work, the first secure BTC storage was created, and the popularity of this cryptocurrency increased globally.
Then suddenly a series of events adversely affected the Bitcoin rate. Vice-President of the Bitcoin Foundation was arrested for money laundering. Hackers attacked the Mt.Gox crypto exchange once again. Then more problems with Bitcoin transactions occurred on other exchanges. All this led to a depreciation down to $600. In 2016 and 2017, Bitcoin slowly recovered and peaked in December 2017. At that moment, the cost of Bitcoin was more than $18,000, and many people now ask if Bitcoin’s crash is inevitable once again.
Bitcoin Is a Day Trading Bubble. True or False?
According to Metcalfe’s law, the effect of a network is proportional to the square of the number of its users. In other words, the more users that are connected to a network, the higher its value. According to rough estimates based on this law, the price of Bitcoin should reach $20,000 by the end of this year and $55,000 in the next five years.
However, the Bloomberg Media Group recently published an interesting study by two economists who called themselves Côtes du Rhône. In their opinion, this virtual currency is too overvalued, and its current fair price can’t be more than $20. The conclusion of these economists is based on the quantity theory of money. So, the value of money falls with its increase in amount.
Many people are currently wondering, “Will Bitcoin crash?”. Experienced day traders have noticed that the chart for Bitcoin dynamics looks like every previous price pattern after bubbles burst. We can examine several examples of bubbles in the US stock market, fluctuation of the euro in the first years after their launch, and even the price dynamics of gold, which was always considered the safest asset. So, many factors are currently indicating that Bitcoin is a bubble.
It usually starts with media attention. As soon as newspapers begin to write about a phenomenon and TV offers discussions on a new financial tool, this is a clear sign of a bubble emergence. Then, it is only a matter of time before it bursts, as a result, every indicator points to Bitcoin crashing soon.
If we look at Bitcoin price history subjectively, we can observe that the current phase appears to be a period, which is identified as a mean reversion. If it is so, then Bitcoin will gradually recover with high volatility, but without abrupt falls it was previously known for.
Is Bitcoin Going to Crash?
Although the collapse of Bitcoin has been predicted about 200 times, the first cryptocurrency in the world is still alive. However, Bitcoin price history has shown that some unfavorable events can develop in a way that can destroy Bitcoin. Here are several hypothetical scenarios of how Bitcoin may eventually crash in the future.
First, Bitcoin is decentralized, and no state government controls it. But a group of states can use all their resources at their disposal to prohibit or restrict this cryptocurrency completely. Another consideration is that Bitcoin is a byproduct of a computer network. If some natural or man-made disaster happens and the Internet becomes unavailable, Bitcoin will lose its entire value. Software updates are periodically released for Bitcoin as a result.
Theoretically, chances are that it can be a critical error of some sort. An example of such an error was in the DAO project, which threatened the very existence of Ethereum. Periodically, hackers attack cryptocurrency exchanges. Many developers are currently aware of Bitcoin’s vulnerabilities and are trying to stem the tide.
In 2017, Bitcoin already had 19 forks – Bitcoin Cash, Bitcoin Pizza, Bitcoin Private, and so on. If the number of forks grows, this can lead to the split of the single network into separate fragments with the following drop in value. Bitcoin can also be replaced by another crypto coin, which may have the same advantages as BTC, but its mining will be more profitable, and transaction fees may be much lower.
Lastly, Bitcoin costs exactly as much as people are willing to pay for it. Due to some factors, Bitcoin may lose its attractiveness, and people may simply stop using it. So, will Bitcoin crash? it all depends largely on people that still buy and use it.
Is it Too Late to Buy Bitcoin for Day Trading?
Many have analysts stated that Bitcoin is currently overvalued. The actual BTC value is floating around $10,000. At the peak of prices, the most clairvoyant investors are beginning to take profits, but those who entered the latest stage do not want to believe in a coming crash. A large part of this community really wants to believe that Bitcoin will not crash and this is simply a period before a new jump in price. This is exactly the way how a bull trap appears leading to a crash.
Day traders can always use bullish and bearish movements of Bitcoin in their trades on exchanges. It is better to use candlesticks analysis, trading bots, and tips from expert advisors when trading. Margin and swing trading for Bitcoinis also a perfect fit. Increasing trading volume helps with smaller price changes throughout the day to get more profits and decreases possible losses if something goes wrong. When trading using Bitcoin, it is always recommended that you choose a stop loss option that will automatically reduce losses.
So, is it too late to buy Bitcoin? Those who consider cryptocurrencies as an object for long-term investments have selected a rocky path. The rise in the value of virtual currencies in the future seems possible, but it is not guaranteed. Many experts have stated that it is too late to buy Bitcoin,which is volatile. It is also currently too expensive, and investors should pay particular attention to more recently available altcoins.
Day Trading with Bitcoins Vs Stocks
Bitcoin has already demonstrated significant ups and downs. Until recently, Bitcoin had not been considered a global means of payment. In some countries, cryptocurrencies are still outlawed, and many states refuse to recognize them. Even well-known experts are also hesitating to answer questions related to Bitcoin’s potential impending crash.
Current thinking is that Bitcoin is a bubble. That’s why investing in Bitcoin and trading it appears to be a pretty serious risk. However, this risk can also bring huge profits. For this reason, if you are willing to take big risks to reap big profits, then you can deal in Bitcoin.
Trading stocks on the exchange market is more suitable for those people who do not want to work with such an unpredictable asset. On the stock exchanges a trader has a large toolkit, strategies, and variables. There is usually time to make a well-balanced decisions and select the right point of entry. Thus far, rules and economic justifications for successful trading on stock exchanges have been established. Any day trader has the ability to learn and put them into practice.