Bitcoin Finally Finds Support at the $4,000 Level: What's Next?
I managed to catch a screenshot of Bitcoin right after it crashed through the $4,000 mark.
At that time it was down over $3,718, about 48% on the day.
Buyers then stepped in pushing the price back over $5,000, a rebound of over $1,000 in a matter of minutes.
Technically speaking Bitcoin has a very broken chart.
The charts did not show support at $4,000 but I won't argue with them. That is the new support level to watch.
Below $4,000, the next support is at the previous low of $3228 or so. If that fails, then I am watching the $1975 area then $995. Ouch!
Price vs Hash Rate
Once again I point out the widely believed nonsense that price follows hash rate.
Hash Rate Hits Record
Please consider this January 2, 2020 post Bitcoin Kicks Off 2020 More Secure Than Ever as Hash Rate Hits Record
Bitcoin Hash Rate
Bitcoin vs Hash Rate
So we are near record highs on the hash rate.
Bitcoin peaked at $19,783 on December 17, 2017.
Bitcoin broke through the $4,000 level today.
So, please stop the nonsense that Bitcoin follows the hash rate. Clearly it doesn't.
Hash Rate Projections
Belief in the hash rate is likely what's behind the $1,000,000 projections.
Since people still believe in the million dollar projections they are forced to believe in proven nonsensical hash rate theories.
The fundamental issue behind both projections and hash rate theories is a huge misunderstanding of supply.
Contrary to popular myth, the supply of bitcoin rises every day albeit at a diminishing rate.
Break in Faith
Question of the Day
Bitcoin just had a liquidity moment.
Perhaps it is related to liquidity issues and selling as discussed in Bond Market Dislocation: What the Hell is Going On?
There is every reason to believe Bitcoin has more liquidity moments ahead of it.
Mike "Mish" Shedlock