Thoughts on Current Events and Price of Bitcoin
At any moment there is supposedly an equal chance that the price will go up or down from the most recently exchanged rate. Looking at historical data, one might say that the best time to buy or sell is when it reached a certain risk level and presume similar proportions will be realized in the future and await that moment to act. This ignores macroeconomic and geopolitical forces that result from real world actions, which provide direction. Profits don't care about your facts. Daily swings can be forecast by recognizing accumulation and distribution patterns. Understanding who owns an asset and why they might be selling or ceasing to sell signals the direction they expect the price to take as they participate in taking it that way. Understanding who is buying an asset then when and how they will sell it also aides us in our own decisions. The price graph tells the story of what has happened. The story is told sentence after sentence, but only understood when read as a whole.
I expect capital flight into digital currencies due to new money being created by central banks to support prices, unprofitable industries, and failing nations. The idea that a country's government (central bank) not be in control of the supply of the currency they use is motivation enough to not lose that grip, but eventually that nation is forced to abandon its own currency after printing enough of it in order to make debt payments, maintain relative confidence, and ultimately attempt to avoid uprising.
Here's a chart of how I could see the end of the year playing out. A slower build is admittedly more likely, but this is an exuberant consideration which includes Biden winning the US election, Trump throwing a fit to save face but ultimately stepping aside. Civil unrest, such as, actual battles between militia and the Army, won't be good for investor confidence, as local economies shut down. Expect a major pullback in that scenario, but any skirmishes should be relatively short-lived, so the negative market sentiment would dissipate as well. The real fear is in the years to follow when the economy churns back up (velocity of money: amount of times a single unit of currency is exchanged within a period of time) with all the new money that has been created causing rapid increases in prices in the years to follow. For now, "we'll believe it when we see it" and continue our "slow" build.
I expect capital flight into digital currencies due to new money being created by central banks to support prices, unprofitable industries, and failing nations. The idea that a country's government (central bank) not be in control of the supply of the currency they use is motivation enough to not lose that grip, but eventually that nation is forced to abandon its own currency after printing enough of it in order to make debt payments, maintain relative confidence, and ultimately attempt to avoid uprising.
Here's a chart of how I could see the end of the year playing out. A slower build is admittedly more likely, but this is an exuberant consideration which includes Biden winning the US election, Trump throwing a fit to save face but ultimately stepping aside. Civil unrest, such as, actual battles between militia and the Army, won't be good for investor confidence, as local economies shut down. Expect a major pullback in that scenario, but any skirmishes should be relatively short-lived, so the negative market sentiment would dissipate as well. The real fear is in the years to follow when the economy churns back up (velocity of money: amount of times a single unit of currency is exchanged within a period of time) with all the new money that has been created causing rapid increases in prices in the years to follow. For now, "we'll believe it when we see it" and continue our "slow" build.