Let us talk a bit about the Bitcoin model in a financial world that depends on an exchange system.
When we have a closer look, you will be figuring out that we have three majority financial instruments that use Bitcoin as collateral which has immediately pricing effects:
1) Margin Trades
2) Future Option Trades
3) CME Trading
These are not influencers but price drivers on top of an existing price base.
So, what does an actual price build means? That’s (how I mentioned in countless publications) around $35,000. We have seen a dip down what I call the “oversold” market, and as I am right, we saw a rebound.
So why does this “stuck” between 35,000 and 40,000, and why not jumping back to 64,000?
Crashing a market to buy Bitcoins is not that easy many of you think. It is a long-term process.
If you want to make Micro Strategy a gift-buying cheap Bitcoins, what do you think of those Bitcoins?
The market cap is not enough because only a limited supply is there in the circuit.
Investors buy OTC. Why? Because if you buy Bitcoins on an exchange, the price will increase every time you buy because the exchange does decrease his bitcoin reserve. This circumstance leads to the situation that buyers willed to pay a higher price. So, in other words, Michael Saylor never would have bought that amount of Bitcoins for another $400 Million investment round if the price is following the buy.
If the OTC markets are empty, you have to fill them. Three factors create an entire market.
1) Whales are willing to sell for private behaves – having a Lambo, a house, a car, or whatever. They will sell over the counter because they earn interest on the people who connect buyer and seller.
2) FOMO moments. Like Elon Musk created on Twitter
3) Short Bitcoin on Future Markets. Most Future option trades are empty trades and have to be filled with Bitcoin, either winning the bet, so the Future Trade Exchange have to buy bitcoins or to lose the bet, so the investor has to buy bitcoins
Most people sell their Bitcoin in OTC because it is more private and does not affect the market.
So when you dump the markets flooding Bitcoins in – There is a high demand for sure – you first will see people not going to sell before the dumping effect hit the markets. If everyone now buys OTC, the exchanges have to become cheaper, getting up with their business model, and so slowly, the market crash.
Investors then typically create selling pressure and “flee” into AltCoins. As stupid it is, people then see an “Altcoin Season,” and all the blogs and news write silly things and analysis why the price must rise and make more stupid predictions and explanations.
AltCoins never had a season. They are only a reserve banking for sit-in and out of a normal Bitcoin Wave
The Bitcoin Wave – a normal thing
We need new people in Bitcoin demanding Bitcoin. A low price is the best for this. And we need development. At a low Bitcoin price, you won’t invest and also do not ask for education. At a high price, they speculate with the difference and pay for education and development. This circuit is like a holder digest. And this is a regular Bitcoin business
We are at the moment after the eruption in a consolidation phase which proves that AltCoins follow Bitcoin.
When someone says, “Bitcoin Investment products, that means we want to participate on Bitcoin without Roller Coaster.
This indicator tells nothing about Bitcoin adoption. It only says that some products lose value. That is the simple thing. If I create, for example, a retirement bond of shares and people invest more in claims other than in the cement, what does it say about the band itself? If people invest in shares about Bitcoin holdings, that doesn’t say that people do not invest in Bitcoin because they left the investment vehicles. Everyone who supports an investment vehicle instead of real Bitcoins never will understand that open trades don’t force the Bitcoin price. You just hope that other willing to invest directly in bitcoin, and you will securely participate in this.
The network activity falls so averagely; a transaction cost is between 6ct and 2,14 dollars. Great!!! For all those who live on Bitcoin.
Means holders are in again. Because a lot of people bought at the dip, a lot of money has moved into exchanges. To mint stable coins as exchanges, have to do, this takes a long period before the price of Bitcoin is increasing on the exchanges. The effect is that blogs write, “Bitcoin is undervalued” and this is true. It is like the sun. The light you see is 8 minutes away, so you the history of the sun. Here you see past history of the price because exchange could the price only increase if they have filled the exchange with enough fiat money, so the regulators have told them to do to prevent another “Mt. Gox” case.
Seeding rounds are hard to do. But, on the other hand, Bitcoin is traded on OTC markets higher because “holding” is back.
So get 64,000 back is a question of a few weeks. So we can say the time it has been prepared to take down you have to double to increase. And This will be around August, I guess.
But there is no bearish market or anything else. Instead, high demand and less access to Bitcoins will drive the price up.
That’s why so many institutional bought in now, and you can’t see the effect immediately.
Written by : Prof. (Dr.) h. c. Joerg Molt