During April 8–12 we ran a pulse on Bitcoin prices, hovering at 6,500 USD at the time. This pulse was a dry run for a serious Bitcoin pulse slated for the end of April.
Before we get to the good stuff, remember a pulse is an elicitation of what respondents think and what they expect their peers to answer. Example: 40 percent of movie critics pulsed agree that Tom Cruise is a mediocre actor, but they expect that 20 percent of other movie critics agree that Tom Cruise is a mediocre actor. We call the 40 percent actual (A) and 20 percent expected (E).
Setup
We advertised the pulse to crypto-Twitter. 103 people clicked on the ad, out of which 43 completed the three-question pulse. In this pulse, we paid 0.2 Ether to each of the top five respondents who showed expertise by predicting others’ answers well, and offered novel insights by picking common but unexpected answers.
Holdings
57 percent of respondents self-identified as hodlers, a surprisingly popular answer (E 31%). Respondents expected more active traders (A 18% :: E 28%) or temporary liquidations (A 13% :: E 20%).
People seem to be holding on to their Bitcoins while thinking others have mostly liquidated or are trading their Bitcoins away.
Price movements
Short term: The dominant view for the end of April is that Bitcoin prices will rebound, settling at a ceiling of 8,000 USD and that further drops are unlikely (A 41% :: E 30%). Expectations of prices higher than 8,000 USD are prevalent and well understood (A 31% :: E 26%), but not dominant. Even at the time of persistent price drops, only 21% of respondents (E 23%) think that prices will settle below 6,500 USD. Pessimistic projections of prices below 5,000 USD are a minority at eight percent, but the community thinks there’re more pessimists out there (E 21%).
Long term: The belief that Bitcoin markets will rebound and continue to grow for the rest of the year is surprisingly dominant (A 55% :: E 40%). However, the recent crash has somewhat dampened appetites, with a quarter of respondents simply hoping for stabilization (A 30% :: E 25%). While no one picked the crash of cryptomarkets as an option, they expected 15% of others to do so.
What are the implications of overestimating pessimism and surprisingly dominant belief in higher prices for a winning trading strategy?
Want to see the results for yourself? Take a look here.
In the next Bitcoin post, we’ll be discussing the results of the new pulse and dig deep into trading strategies shaped by positif.ly insights.
