Let’s talk about the price of Bitcoin. What is happening right now? Who are winning? The bulls or the bears?
During the last weeks, the price of Bitcoin has maintained a (relative) stability, really, surprising. Despite the great pressures coming from the macroeconomic and geopolitical sphere, this support has proven to be a psychological barrier with a rather special strength. The $21.6K-$18.7K channel has not been broken yet. The price of Bitcoin has been caged in this channel for what seems like an eternity. Which increases the suspense. But, at the same time, this lateral trend is slightly different from the downward trend of the Nasdaq and the S&P 500. Which, in the midst of so much uncertainty, could be interpreted as bullish hope.
Of course bulls don’t need many excuses to get excited at the first change. This is a highly idiosyncratic space. For many, Bitcoin is much more than code on a computer network. It is not just an investment in portfolios. Bitcoin has become an identity. In many ways, Bitcoin is the Herbalife of the financial world. It has a bit of a cult, a bit of a political party and a lot of a countercultural movement. In these cases, unquestioning faith in an inevitable future is part of the package of dogmas. Sooner or later, victory will be ours. History is on our side. Or, at least, that’s how the story goes.
- Bitcoin Price Outlook: 09/28
It is not very sensible to underestimate the power of faith. Narratives carry a lot of weight. Because narratives form expectations. And expectations greatly influence our decisions. In other words, a belief can become a self-fulfilling prophecy. Many in this industry understand this perfectly. Therefore, promotion is our daily bread. In the age of social media, community is everything. So it is very important to keep the enthusiasm alive with words of encouragement, promises and a lot of ideology. In this way, the commitment is greater. And the desire to invest increases. Fanaticism is not accidental. All the politics on Twitter is not accidental. That emotional bond is necessary. Libertarians, anarcho-capitalists and ultra-conservatives have found a fighting field in Bitcoin. That is not accidental.
We well know that even the smallest business now needs to have a presence on the networks. Building a community is required. And this is achieved by creating content. In other words, you have to entertain to capture. Why? Because it is known that sales depend on the number of people we can attract. Social networks work like a spider’s web. These days, community is money. What is true for a small business is also true for Bitcoin. That legion of bitcoiners, with lights in their eyes, promoting Bitcoin, with unquestionable faith, all the time, and everywhere, means nothing but money for the ecosystem.
Of course everything has its limit. Just as Herbalife is not for everyone, Bitcoin is not for everyone either. The phenomenon has gained a lot of popularity in many sectors. But we still cannot say that it is a universal phenomenon. Among millennials, libertarians and venture capitalists, the enthusiasm has certainly been great. However, not everyone is a fan. There are still many skeptical sectors.
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What does this all mean? First, the conviction of the crypto community is strong enough to self-fulfill many of its prophecies. And that may explain the (sometimes) uncorrelated behavior of this emerging market. In second place, the crypto community, thanks to its alternative narratives and the power of social networks to fragment society, lives in a parallel universe. That parallel universe is validated and fed back by its members in the style of a church. This particular creed is considered to be an absolute truth. However, that belief does not always harmonize with reality.
Ironically, the future of Bitcoin lies in the hands of non-bitcoiners. In other words, future demand will not come from people who have already bought. Future demand will come from people who are yet to buy and not necessarily belong to that kind of cult that has been formed. If you want to know what the cult thinks, it is best to go to Twitter or YouTube. On the other hand, if you want to know what they think of others, it is best to study the behavior of the price. The price of Bitcoin is usually more sincere than the rhetoric.
Bitcoin, as a whole, is subject to both pressures. On one side, we have the militant bitcoiner. The Militant is a kind of cutting-edge gold beetle promoting classical liberalism with a Californian, cypherpunk wrapper. On the other hand, we have the pragmatic investor looking for opportunities to grow financially. These two currents react in very different ways to different situations. That explains the contractions we often face in this environment. The militants sometimes dominate. Other times, it is the turn of the pragmatists.
The Organization of Petroleum Exporting Countries (OPEC) has decided to cut production. Which is a slap in the face for Biden. That will surely have an effect on the price of oil and gas, further complicating our complex situation. This, of course, does not go very well with efforts to reduce inflation. To make matters worse, everything seems to indicate that the labor market in the United States is not cooling down. That’s what happens when too many things can go wrong. Usually something always goes wrong.
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Regarding the price of Bitcoin, making a forecast at the moment is not an easy task. The trend is increasingly lateral. Which puts the bulls and bears in a technical tie. In other words, the chances of going up are as high as the chances of going down. Of course, the geopolitical and macroeconomic landscape is not offering us much hope at present. Therefore, expectations are not very encouraging.
However, this long period of consolidation is already starting to cast doubt on the bearish scenario. One could come to think that the capitulation should have already taken place. But this has not been the case. Support (so far) has held up heroically. Which definitely represents a victory for the bullish hypothesis. What will happen? We have, first, to break with this channel. If the resistance is broken, we have an entry signal for the longs. If the support is broken, we have an entry signal for the shorts.
Disclaimer: The information and/or opinions expressed in this article do not necessarily represent the views or editorial line of Cointelegraph. The information set forth herein should not be taken as financial advice or investment recommendation. All investment and commercial movement involve risks and it is the responsibility of each person to do their due research before making an investment decision.
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- Bitcoin Price Outlook: 09/28
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