Bitcoin Bubble?Submitted by EGhost57 on Mon, 03/18/2013 - 15:11
Being the contrarian I am, I went searching for some anti-bitcoin love in response to all the bitcoin love going on here. Surprisingly there isn't much out there, which leads me to believe I am even more correct in thinking that bitcoin is a bubble about to burst:
The question left to be answered is whether or not bitcoin is once again taking the shape of a bubble. The answer is yes. There is present a reflexive pattern of people buying because prices are rising, and prices rising because people are buying. The myopic are extrapolating the price trend of the past three months, which they deem is normal, and in so doing they exacerbate it to the upside, thus attracting even greater fools. The inflection point will come when the continuity of bullish thought is broken, which could be anywhere between $49/bc to $69/bc. One thing is for sure, the amount of suckers left who are willing to jump on the moving and ever accelerating train is drawing thin, and so are their pockets.
When prices for any asset go parabolic, it does technical damage to a chart. It is sort of like someone deciding to go full speed in the middle of a marathon. Surely, one would look good for a few minutes. However, at a certain point one would inevitably collapse, with the possibilities of finishing the race being greatly diminished, let alone doing as well as they would have otherwise. Like Icarus, who had soared too high and melted the wax on his wings, parabolic moves always end in a crash. Ironically, the best thing that can happen for bitcoin naysayers is if bitcoin skyrockets to $100/bc within a week.
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I like the idea of bitcoin, but its too unstable for me right now.