Bitcoin Bubble Graph Compared to DotCom Crash [2019]

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bitcoin bubble crash
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Bitcoin Crash of 2018

In November 2018 the Bitcoin price dropped back to the level of September 2017. BTC seemed to be stable for some time around the 6000 dollar level. Many investors thought that the 6k support was the bottom. And then BTC crashed 40% again from 6.4k to 3.8k.

When taking a look back at the earlier crashes then it seems that 3.5k or even 3k might be the level where the drop ends.

From 4k to 20k and back.

bitcoin crash of 2018

Shortly after I updated the data in this post the Bitcoin kept crashing. Going as low as 3200 dollars. However, it bounced back in a few days to hovering just below the 4000 dollar mark.

bitcoin crash 3000

Now, many people are asking if this is the true bottom. If I new that I would make millions. But the larger question is if BTC itself is viable. There are 2 types of treaths:

  • People will start using something else and the BTC dies in obscurity.
  • “Big brother” will make cryptocurrency unusable or illegal for sinister reasons.
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If you believe any of the above to be true, then sell. But if you think that BTC is just in the “Through of Disillusionment” in the Gartner hype cycle then buy. It doesn’t matter if you buy at 4000 or 1500 dollars if the price will eventually reach 200 thousand.

bitcoin hype cycle 2019

When will the bitcoin rebound? If you take a look at the earlier crash in late 2013, then you can see that the recovery took about 2 years.

bitcoin crash 2013 chart

As you know, past performance does not predict the future, but there may be larger principles in play. The last peak of the earlier crash was around 1k the latest peaks was 20k. So, in 2021 the BTC will be in the 200k to the 400k range?

If you go even further back and look at the crash of 2011, then you see that the recovery to solid growth took about a year.

bitcoin crash 2011 chart

https://www.buybitcoinworldwide.com/price/

Below you can find explanations about the potential drivers behind these price movements.

bitcoin quote novogratz

10% of my net worth is in this space. – Mike Novogratz, hedge fund manager, Galaxy Digital Assets

Boom and bust cycles

This post is a bit off-topic when discussing willpower and goals. I decided to post this when I analyzed what happened to Bitcoin in the last few days and found the resulting image really interesting.

There is this model of bubble graph circulating internet that matches the crashes from tulip bubble to Bitcoin.

bubble

 

The difference is usually in the time-frame. What happened in 12 year during the dotcom bubble played out in 60 days during the Bitcoin „correction“. This is the Bitcoin price over the last 60 days.

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bitcoin price chart

bitcoin quote gates

Bitcoin is a technological tour de force. – Bill Gates, Co-founder of Microsoft

Here is the chart from the dotcom bust.

dotcom-crash

And this is what you get when you overlay Bitcoin with dotcom.

bitcoin-dotcom-bubble

For good measure here are all the graphs together.

bitcoin-dotcom-bubble-model

All the the charts have a slightly upward sloping mean that seems to represent the true value. So lets, see if this crash plays out as others did, or there’s something completely different this time.

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Photo credit: wuestenigel / CC BY

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5 Responses

  1. MW says:

    This is scarily accurate right now.. again..

  2. Ad Bo says:

    To understand the price behavior of bitcoin, use the quantity theory of money; M·V = P·Q.

    Sudden price surge and hoarding is to be expected, not deflation: http://zeroprofits.blogspot.com/

  3. MS says:

    The biggest difference is that BTC is the only way to anonymously pay for drugs, so BTC will never fall to zero, simply because of the countless pot smokers and arms dealers…

    • Andyj says:

      Ignore the politicians and their media lackeys. The biggest arms and drugs dealers OWN banks. Don’t forget your corrupt political psychopaths will be cashing in regardless of what they say about other traders.
      China is collecting more than anyone else in smaller trading volumes while the US trades fewer in bigger amounts.
      http://fiatleak.com/
      This means the Chinese communists that correctly said it is not a currency but a commodity of no base value is perfectly correct. Most western currencies have nothing of value backing them either…. Unless Hal Turners assertion of “Eminent domain” to China was true.
      So what do you prefer. An uncontrolled currency by any Gov’t for all people good or bad or the loss of your domain? Choose.

    • Henrik Clausen says:

      Danish police fixed that problem. They’ve used Bitcoin transactions as primary evidence in court to convict drug dealers. No more hiding behind fake ‘anonymity’ here.

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