Please note that we are analyzing the price, not the total market capitalization.
First, $ 150 platform of bitcoin from July to October last year will not come back. Bitcoin at that time had became fairly strong and influential, a lot of people were trying to get as many coins as possible. Even Silk Road event didn’t interfere with it.
Second, note that on December 18th last year, when bitcoin dropped sharply, price was only $ 320 in domestic trading centers, at the same time ,lowest in foreign trading centers is $ 450, 40% higher. 300,000 coins were traded in foreign trading centers that day. The dive came very suddenly, and the buying suddenly rushed out, wildly absorbing coins at less than $ 600. MT event caused many dives, but the price remained over $ 500, trading volume was very large, over 2 million coins were traded. All these indicate that buying under $ 600 is very strong.
Third, assuming that there is no panic, who will sell below $500? After 1 month’s surge, 2 large baptism, and 3 months of suffering, those who can still hold their coins are very determined, they would not sell unless they really panic. Selling can only occur in the following situations:
1. Big investors go short to earn the difference. They sell high with a big volume, crashing down the price, and then buy coins back when the price is low. Note that their ultimate goal is to earn more coins, so it is difficult for them to drag the price down to 500 USD.
2. Rigid selling demand. For whatever reason they must sell bitcoin for fiat money regardless of the price. The loest daily volume is less than 10,000 coins, indicates the rigid selling is small portion.
3. Newly-mined coins. 3600 new coins every day according to the issuing mechanism, 2.2millon USD is needed to purchase all of them. This is actually the greatest cause for the decline of price. Newly-mined coins every year are 1,250,000, about 800M USD. The shock caused by the MT this time has led to a trading volume of two million ( foreigners don’t like wash trade, the trading volume is real ) , so 1.25m Bitcoins within a year is not a problem .
Now the conclusion is clear, you can judge by yourself. If you think that incremental fund this year can reach 800M USD, then the price now is low; If you think otherwise, then it will continue to fall, the extent of falling depends on the amount of incremental fund you estimate.
Personally I am optimistic. Big money like Wall Street will enter the market. China’s charging-stop event and MT event gave big money two excellent opportunities to build position. Big money would not wait until the price falls below a certain level, because they can easily lose opportunity this way. They will build position continuously. So, the future trend should be in line with its previous pattern: slowly rise for three months. These months are the process of building position of big money. When the position building is completed, then coins are locked, we will witness another remarkable surge.