Optimism in the crypto market is growing, all eyes on the US Federal Reserve, Bitcoin to $ 200,000 and more

Follow optimism in a mixed-signal environment. Markets open green, despite rather weak labor market data (USA). All in anticipation of the next Federal Reserve meeting and betting open. Investors are already bravely welcoming “tapering”. However, we do not yet know the details of the expected stimulus reduction. Inflation is still a stone in the shoe. However, the production and distribution chains are already showing signs of recovery. Which implies we could see inflation easing slightly over the next year. Apparently there is more good than bad. That is the current positivism.

What we are experiencing in the crypto environment is regulatory optimism. Comments and rumors are driving the rise. Neither the Federal Reserve nor the SEC have any intention of banning cryptocurrencies. And everything seems to indicate that the US Congress does not want to take over this ship either. Actually, In the midst of this positive wave, the rumor stabs and spreads about the possible approval of a Bitcoin ETF. Remember that the markets are very talkative. We like it and we enjoy it. In other words, rumors tend to be more important than news in this area. So on like foam.

Now let’s talk about the hottest news this week.

Optimism in the crypto market is growing, all eyes on the US Federal Reserve, Bitcoin to $ 200,000 and more
Optimism in the crypto market is growing, all eyes on the US Federal Reserve, Bitcoin to $ 200,000 and more

Bitcoin price is headed for a mathematically “programmed” all-time high of $ 200,000 or more

Studying the past to predict the price of Bitcoin calms the senses through its simplicity. In other words, the future is written. It’s that simple. The â ???? programmedâ ???? it is practically guaranteed. However, we know very well that this is not the case. It sounds very nice. But I am sorry to tell you that life is more complicated. Of course we’re aiming for $ 200,000. It is obvious that Bitcoin is a growing market. There is liquidity and demand. That of course puts us on the right track. The problem isn’t the $ 200,000 goal. The problem lies in the somewhat childish reasoning. Patterns are tools we use to perform analysis. But they are not causes.

I take the opportunity to talk about itl Stock-to-flow model (so popular in this ecosystem). Overestimate scarcity and neglect demand. In its formula, it does not take into account liquidity (dollars, euros), monetary and fiscal policy (US, EU), regulation, infrastructure, investor sentiment, emotions, psychology … That is, it does not take into account demand. And without asking, dear friends, there is no value.

I invite you to take a piece of paper and draw something on it. Make a unique work (scarcity). And put it up for sale. In a few days, they will realize that scarcity alone is not enough to create something valuable. I made the big mistake of this math – programmed – ???? of the stock-to-flow model.

The 2017 Ethereum fractal reappears with a 7,000% gain

Confirmation syndrome is the most humane thing there can be. People usually see what they want to see. A few weeks ago the pessimism had gone through the roof and everyone saw pure darkness. Now that optimism has returned, everything is flowers and rainbows. All of these bullish analyzes are indicators of current sentiment rather than accurate predictions.TO

Here is an uncomfortable truth. This is the law of diminishing returns. Today’s Ethereum is not the same as the Ethereum of 2017. This time I am specifically referring to its capitalization. That is, to its size. Simple. Small ones can grow faster than large ones. In other words, growth never keeps pace for long. This means that it doesn’t make very much sense to copy and paste the chart for 2017 in order to predict the price of Ethereum for the next few months. 7,000%? 70X? We’re talking about an approximate unit price of more than $ 250,000. Naturally The law of diminishing returns was not taken into account in this calculation.

A token based on the name of Elon Musk’s pet has risen by more than 2,000% in the past few hours

Very low capitalization tokens can grow by such percentages. These very illiquid markets react violently to any speculative movement. In this case, Elon Musk is the king of pump and dump. Their little games on Twitter are buy or sell signals for an exercise by Robinhood dealers jumping from plan to plan. It’s that simple. There is no secret here.

Bitcoin’s initial price was set 12 years ago and a user bought 50,000 bitcoins for $ 35

This message is always very popular in a phase of euphoria. One cannot help but think that one could have been that lucky guy who is now a multimillionaire with an investment of only $ 35. It’s the archetypal story of Aladdin, but in a crypto version.

Another archetypal thing usually arises during bear cycles: The tragedy. This time I mean the person who bought early but lost or prematurely sold their private key. That is, he could have had millions and millions, but now he has nothing left. A real tragedy.

Renowned trader MichaÃl van de Poppe points out four cryptocurrencies that could rise by more than 70%

The crypto market is definitely Wall Street on steroids. Few markets are as speculative as this. Let’s face it, we’re all price-obsessed, greed is endless, and we suffer from a huge appetite for new things. The funny thing is that there is a lot of fanaticism too. To say that this market is “speculative”? it hurts the sensitive in the heart. Apparently we’re all barefoot nuns here and no one is here for the money. Allegedly we are all fighting for the libertarian utopia. Down with the banks! Down with the Federal Reserve! and similar. However, these items are always a huge hit. Why? People are intrigued by a tip.

People just like it. And people love to be lied to. Buy X which will go up 70% in the next few days. That’s what people want to hear. Easy money. Apply the law of least effort. I do little, I get a lot. However, these beings are the first victims of the market. Tips are not a financial strategy. What goes up quickly comes down again quickly. Do your homework. The best analyst is the one who does his own homework and does not listen to “tips”.

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