FUTURE LOOKING BEARISH and POSSIBLE SOLUTION?
The way I see it right now is not what people would like to hear. Keep in mind this is not an investment advice, you are the only one responsible for your own money. It is my opinion, and if you like it or not, we have to consider some of the factors that are often being almost completely neglected. Lightning network can not solve all the problems.
Who is actually using Bitcoin?
This should be obvious, and I often wonder if we are maybe completely blinded, but the answer is: nobody!
There are multiple reasons why lightning network will not work, one serious to consider (and why this might not change) is lack of metadata that comes with BTC transactions, and regulators absolutely hate this, especially, in the middle of the war against money laundering and terrorism. Even if banks recognize the value of Bitcoin, they still need to report to higher authorities exactly where the money came from. This, in some cases, represents a serious issue that I do not know if it can ever be properly resolved. Bitcoin is a first generation blockchain platform, it has a lot of limits...
There is absolutely no incentive for people to spend their Bitcoin!
Another big problem is that if you believe in BTC, and you most likely own it, you have no reason to buy things with something that you think will have much bigger value in the future. This is very interesting, Bitcoin is perceived as "to good to spend", but that lack of spending, lack of usage, is what essentially drives price down.
It is possible that it would be better to spend your Bitcoin and help network, and the value you lost short term would actually compensate long term.
These charts help us get the picture: Bitcoin's transactions per day are in decline, compare 150 000 transaction per day, to 200 million of transactions per day Visa is managing.
<source: blockchain.info>
My view:
In my opinion Bitcoin network usage, transactions per day, needs to start picking up, otherwise, I see bearish couple of months. I think the easiest way for Bitcoin price to go up to 40 000 USD+ is to make people actually using it. Even if they will have to pay higher fees, and they are scared that they will lose value in terms of future EV (expected value), in this instance, the potential immediate return they will see from price increase may actually have a higher expected value.
In practice, at the moment, I do not think it is possible to change the way of thinking, and make people actually using Bitcoin, instead of hodling it as a store of value. This idea is counter-intuitive, even provocative to some extent. Neither do we know if Bitcoin spending strategy would even be successful.
We will see better entry opportunities and deep down to 6800 USD range. News like US Congress ICO hearing could affect short term and cause price rise, but without other breaking news I expect price to correct down quick.
This is not a financial advice.
Excellent analysis as always! Market movement has been quite exciting this weekend, many TA s predict a closing triangle. Is your prediction of 6.8K$ already reflecting the market realising a fail of bitcoin. i am wondering what a possible low could be in that case, as it will certainly affect all of crypto...
Very good question. Yes and no. It reflects to some extent, I really think objective people that truly understands technology ( not BTC biased people from before, potential new big investors etc.) don't see much value in Bitcoin. And honestly crypto is very addictive, so even ordinary people that had no idea about blockchain, and joined as late as December 2017, are doing their researches, their knowledge is gettting better every day that pass by, and they also see less and less value in Bitcoin.
However, we have to keep in mind that BTC was very very good to a lot of people in last 10 years. And they will not abandon that ship so eazily, they will defend Bitcoin to the last breath, every good news will end up in a hype, especially news about lightning network.
That is why we will see, I think, price jumping from 6k-12k range probably for quite some time....probably through whole 2018...but I think price wont go much under 6k (at least not for long), but also won't go above 12k, because as said before, there is not enough new investors. So BTC without new investors, now need use cases, BTC needs people that actually needs to spend BTC....
Yeah, certainly there are many that lots of people having made considerable gains, and are determined to hodl, but my guess is those won't bring in any new funds, required for better figures. And of those whose got in end of 2017 for the lambos, i wonder if many of those will dig deeper. so on one hand there is a new infrastructure gearing up, on the other hand there are high expectations priced in in btc, and if those are deceived i worry this might drag down the whole market...