TA: Why the Recent Breakout Looks Real as Bitcoin Price Surges 6%
How to Tell if the Recent Bitcoin Price Breakout is Real
The recent Bitcoin price breakout has many investors wondering if it's the real deal. In this blog post, we'll take a look at Bitcoin's price history to see if this breakout could be for real. We'll also examine what's driving Bitcoin's price and whether or not the current rally has legs.
Bitcoin Price History: Why This Breakout Could be Real.
Bitcoin's Price History: A Timeline
Bitcoin was created in 2009 in the wake of the global financial crisis. The creator, Satoshi Nakamoto, designed it as a peer-to-peer electronic cash system that could be used to buy and sell goods and services without the need for a central authority.
Since then, Bitcoin has seen a meteoric rise in price and popularity. In 2010, one Bitcoin was worth just $0.08. By 2017, it had risen to over $1,000 per coin. And at the time of this writing, Bitcoin is hovering around $11,000 per coin.
This recent price breakout could be due to a variety of factors. Let's take a look at some of the most likely reasons behind Bitcoin's surge in price.
Bitcoin's Price History: The BreakoutIn late 2017, Bitcoin experienced what is known as a parabolic advance. This is when an asset experiences exponential growth in price followed by a sharp correction. From October to December 2017, the price of Bitcoin rose from around $5,000 to nearly $20,000 per coin before correcting to around $8,000 by February 2018.
This advance was driven by a perfect storm of positive news and hype surrounding the cryptocurrency space. Mainstream media outlets were beginning to cover Bitcoin more frequently and stories about people making fortunes by investing in cryptocurrencies were becoming more common. At the same time, there was a sudden influx of new investors entering the market who were eager to get in on the action.
The result was an unprecedented increase in demand for Bitcoin which drove up its price even further. However, this price increase was not sustainable and the market soon corrected.
Now, in 2020, we are seeing Bitcoin's price rise once again. After a long period of consolidation around the $3,000-$4,000 range, Bitcoin's price began to surge in late 2019 and has continued to do so throughout 2020. While the price is not yet at its all-time high, it is getting close. And many believe that this time the breakout could be real and here to stay.
So what is driving Bitcoin's price this time around? Let's take a look at some of the most likely factors.
What is Driving Bitcoin's Price?
The Supply and Demand of Bitcoin
The recent bitcoin price breakout could be attributed to a number of factors, but the most likely cause is an imbalance in the supply and demand of bitcoin. While the total supply of bitcoin is capped at 21 million, the actual amount available to buy or sell is much less than that. This is because a large portion of the total supply is held by long-term investors who are not interested in selling their bitcoins.
The reduced supply coupled with increased demand has resulted in a sharp increase in price. Investors are buying up bitcoins as fast as they can, driving the price higher and higher. This frenzy is only sustainable for so long, however, and at some point the price will reach a point where there are no more buyers left willing to pay the current price. This will result in a sharp drop in price and is known as a market correction.
The Psychology of Bitcoin's Price
Investors are not only buying bitcoin because they believe it will appreciate in value, but also because it has become something of a status symbol. Bitcoin has become associated with wealth and success, and so people want to own it even if they don't understand how it works or why it's valuable.
This psychology can drive prices up even further than would be justified by fundamentals alone. When enough people are convinced that something is valuable, they will continue to buy it even when the price gets too high. This can create a bubble that eventually bursts when reality catches up to perception and people realize that the asset is not actually worth what they thought it was.
It is hard to predict the future of Bitcoin, but it seems that the recent price breakout could be real. There are a number of factors that suggest that demand for Bitcoin is increasing, while the supply remains relatively static. This imbalance could lead to further increases in price.
However, it is also important to remember that the price of Bitcoin is highly volatile and subject to change. So, even if the current breakout turns out to be real, there is no guarantee that prices will continue to rise. Investors should always do their own research and only invest what they can afford to lose.