What’s next, Bitcoin?

This article was written yesterday, September 13, but, since it remains relevant, we publish it for you today!

Analysis of bitcoin, on the method of standard deviations, fundamental and technical analysis.

Bitcoin did not take a long pause at his usual levels. As a result, he succumbed to backwardation and collapsed, at the time of writing, the drop of bitcoin was 7.29%. What can we expect now from Bitcoin and how deep can the correction be?

A little bit of math.

Estimating bitcoin using standard deviation methods, we can reveal a very interesting point: the standard deviation of bitcoin is 15–25 percent of the average price for 50 days. At the moment, the average price is $3861.47 and this is already a negative deviation of 0.45 percent. In fact, bitcoin began to fall, but this is an assessment by the stock market, if Bitcoin can be considered as such. The figure shows 3 graphs of standard deviations:

- 1st for 6 months.

- 2nd for 1 year

- 3rd for the whole period of life

What should be noted for sure, is the fact that bitcoin (judging by the life schedule) constantly reduces the standard deviation. But nevertheless, judging by the mathematical analysis, it’s targets remain in the range from $ 3282.25 (-15% deviation) to $ 2896.11 (25% deviation)

What is there with technique

From the technical side of the analysis, Bitcoin reached the moving average in 50 days and in fact began the breakdown and consolidation behind it. From the side of Fibonacci levels, we know perfectly well that Bitcoin is a fan of 261th level and is inclined to believe that this time the depth of correction can be approximately the same.

However, on the way to such a correction there will be a 161 level $ 3279.53 and a 120-day moving average with a price tag of $ 3,025.61. It should be noted that throughout its existence, bitcoin started a new impetus for growth from the 120-day moving average; it is obvious that in the region of this price one should expect the influence of real fundamental factors.

Well, a little bit of fundamental

From a fundamental point of view, there are no real motives for the fall of Bitcoin, in addition to the already bored ICO ban in China, and obviously Bitcoin will not fall. The only thing that could scare some market participants is the statement of JPMorgan executive director Jamie Daymon who severely criticized bitcoin, promising to fire for the dullness any trader who trades crypto currency.

“It’s impossible to conduct business in a world where people come up with money from the air,” he added. “All this will not end well, … someone will be killed, and then the government will have to intervene and close this shop.” At the end of 2015, bitcoin cost less than $ 250, now for a unit of this currency, “produced” with the help of computer processing power, give about 4,200 dollars. “

“And do not tell me that you can sell it. The price can soar to 20 thousand, before the bubble bursts. It’s a lie, and to be honest, I’m shocked that someone does not understand this. “ Daimon compared bitcoin with tulip fever. “The only sane argument in favor of bitcoin from what I’ve heard … is that if you live in Venezuela, or in Ecuador, or in North Korea … or you are a nacrodiler, a hired killer or whatever, it’s more convenient for you to deal with bitcoins, and not with American dollars. In this case, it is better to bypass the system side. But in this case, the market for such a currency is very narrow. “

All this told us Daimon.

Summarizing the above

There are no new factors in the direction of the fall, and so bitcoin continues to do what he did best: give in to mathematics and technical analysis, showing how much better than other fiat currencies. The only really important reason for the fall, I believe, is backwardation on futures, which continues to deepen.

Alexsey Tarabanov
Head of the Department of Analytics and Finance.

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