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Hello guys. I just want to share my points in why I think BTC will drop soon. I recommend selling soon, and then rebuying in a later time this year. No doubt that we can recover to 40k$ within one year after dip.
1. Panic buying
BTC Supply Max: 21,000,000 BTC
BTC Supply now: 18,500,450 BTC
That means we're about 89% close to the MAX amount of Bitcoins in the world. Even though, with the current rate we will reach 100% in 4.15 years (i know there will be a halving in around 3 years) then people think 89% is close because they dont know how BTC fundamentally works.
Therefore that concludes our first point, that the dramatic rise can be partly due to people panic buying because they want to buy BTC before we "run out". Investors and people have "fear of missing out".
2. Relative Unrealized Profit/Loss
This graph is used to check how much unrealized Profit/Loss people holding BTC have as of now. This graph shows what kind of state we're in, when looking at BTC.
Current situation; Around 73% of ALL people with Bitcoin are in unrealized profit. The graph call this state for "Greed" and as you know. Greed always ends bad
What can we read from this; When people are in profit, then they want to realize that profit. How can they do that? They can sell their bitcoin. If enough people reach profit, normally around 80%, then big groups of smaller investors, will start to sell to realize their profit. This could result in a chain reaction and the price to dramatically drop.
You can look at history, and see the same examples and therefore this might happen again. See image below:
Here you can see how in 2018, we got to a 75% unrealized profit/loss and people starting to sell. This caused a massive drop in price.
3. People being "wtf" and surprised about the price
I know this isn't backed by fancy graphs or numbers but I believe that many (like myself) are being quite surprised about why BTC is as high as it is. I don't even know why it is so high, and why we under 2-3 months have went from 15k$ to 41$k.
I know BTC have many benefits like;
- Long term more sustainable than USD due to all the inflation on the USD with the stimulus checks and so on. If the new stimulus check gets accepted then 50% of the USD money will have been printed in 2020. Thats kinda insane.
- Decentralized and awesome!
- and many more...
but I still think that the current price has been pushed a little too high too fast, by whales and big investors. Currently around 10% of all addresses are from Large holders (Addresses with more than 18.5k BTC = 76 million USD). That's quite a big portion, and if some of these whales/investors start to realize their profits. Then we might see the rest 90% start to sell, and result in a dip.
idk - just some thoughts i had.
Lmk what you think of the current situation.
Is BTC to high? too low? Where will it go?
