The Bitcoin price is TOO DAMN HIGH?!?!?

Updated: December 2, 2016

Bitcoin just won´t stop going up. The price made a three year high at BTC-E. There have been several attempts at rallys this year, but is this “the one”. Let´s take a look at what has happened in past rallys and why some fundmentals might be playing more of a role this time around.

Dumping on hot tips and insider info
This year started out with a strong sell off after the strong 2015 year end rally. Times were different then. Nobody had ever heard of bitcoin classic, Mike Hearn was still working on bitcoin and bitfinex still had a good ammount of volume. This sell off also marked the division of some bitcoin trading communities, some of which went on to fork again, but still not as often as Vitalk´s ETH. After that dump some people went back into full beartard mode and called the end of the bitcoin rally, that is it, it is over.

Bitfinex the rally killer
Just when everyone had their moon boots on. The price was going up, everything looks great. Then suddenly “we need to shut down trading to fix something” messages from Bitinex. We know how the market reacts to that, DUMPIT. Oh yes it dumped. A lot of people were unable to get out of position before Bitfinex locked trading. It went something like this: Price Mooning, Bitfinex halts trading, people in margin positions can get out, Price Dumps, people with open positons rekt, Bitfinex says “should have hedged bro”. That might have been a good warning for what happened in the summer. Sometime around Aug 2nd 2016 Bitfinex was hacked. Of course the market dumped, and dumped hard on the news.

Now there is very little volume at Bitfinex and even if something major happened there again it shouldnt have as big of an impact, we hope.

Trump, India and Europe
The times are a changin, Trump won the election. India is doing something with their currency and causing a lot of lines of people in front of banks. Even if it is not a bank run, lines of people makes everyone nervous. Austria has an election this weekend and the EU critical canidate is likely to win. The same weekend Italy has a referendum on reforms that it needs to help it stay in the EU and it looks like the No vote will win. There is a lot of uncertainty in the air. This has been good for bitcoin so far. Even if people are not using it for capital flight out of India, Italy and Trump will not limit funds sent to Mexico. The perception that any of that could happen is enough. Will Italy be the next Cyprus when Unicredit and the other Italian banks that are in trouble colapse?

Sports Betting and Dark Markets
Although it is hard to get numbers on how much bitcoin is being used at offshore sportbooks and in the dark markets. The number seems to be going up and not down. More people are becoming hip on how to use bitcoin to do what they want, even if it is not exactly allowed under the laws of where they live. When the NFL season started we say a huge spike in price, was that the sports bettors buying bitcoin?

Bad News, FUD, Butthurt and the price loves it
Coinbase has to give over a massive ammount of data to the IRS. This had ZERO effect on the price, it looks like nobody was supirsed and that nobody cared. There is an ongoing bitcoin scaling discussion going on that is full of the usual FUD, social bots, finger pointing and general butthurt. The price could care less. Of course one side of the scaling discussion is trying to take claim to any positive movement of the price, but really, nobody gives a shit. Now that segwit is finaly out there and just needs to be activated the market has reacted in a positive way if anything and dispite the massive attempts of trying to get people to reject it.

Is the price of bitcoin TOO DAMN HIGH?
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