What is Bitcoin? Is it just a game or the future of the financial world?
BTC started to fall on December 13. The failed attempt to break through $50,394 (23.6% Fibonacci level) indicates that market participants are no longer ready to buy the instrument. Therefore, the formation of the corrective wave (b) seems hardly possible after the cryptocurrency fell by $27,000. Such market behavior indicates the real possibility of a downtrend. Corrections usually start and end abruptly. This concept is especially true in relation to Bitcoin. However, the situation is now completely different. Therefore, I expect BTC to go down. It was reported that about 19 million coins have already been mined. There are about 2 million Bitcoins left, which will take at least 100 years to mine, crypto experts say. About a quarter of all mined coins are illiquid, as their owners either died or lost access to their wallets. This means that these coins will never find their owners. The remaining 14 million coins are held by long-term investors who count on the long-lasting growth of the cryptocurrency. But is this growth possible if so few coins remain in circulation?
It is possible if only the value of BTC continues rising in the next 100 years. If the forecast made by Glassnode, an analytical company, is accurate and it takes at least 100 years to mine the remaining 2 million coins, for the profitability of mining, the value of Bitcoin will have to constantly increase. It took 12 years to mine 19 million coins. So, if it takes 100 years to mine 2 million coins, then the remuneration of miners will sharply decrease. Therefore, the price should constantly increase so that miners can continue to mine Bitcoin. Apart from that, it turns out that the flagship cryptocurrency could be very easily withdrawn from circulation. This, if you lose access to a wallet for any reason, there is no way you can restore it. Bitcoin is a decentralized system, it has no headquarters where you can call and regain access. Does such a cryptocurrency have a future? After all, anyone can lose access to a wallet. The same goes for the death of the owner of the digital asset. So, the number of coins will start to decrease at some point! This is good for the price, but will such a cryptocurrency remain popular?
The current uptrend structure still looks clear and complete If so, several descending waves are now forming. It seems that even the first wave of the new downtrend section has not been completed. So, wave (a) may well become longer. Bitcoin is heavily dependent on fundamentals and market sentiment. If market participants decide to sell off BTC, the first wave could take an even more extended form. Since the attempt to close above the 23.6% Fibonacci level was unsuccessful, the downtrend may continue with targets seen at around $42,731 and $41,394, which corresponds to 38.2% and 38.2% Fibonacci levels respectively.
