A Bitcoin price of $ 100,000 in 2021 is at stake

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The following is taken from the latest monthly report from Deep Dive, Bitcoin Magazine’s premium market newsletter. To be among the first to receive this and other on-chain bitcoin market analysis straight to your inbox, subscribe now.

$ 100,000 before the end of the years? It’s not as crazy as it sounds, and here’s why:

The reflexivity of a bitcoin bull market is really something to see. After a ‘bubble’ the price drops and consolidates for months / years, as more people understand the monetary attributes of bitcoin, companies continue to create services above protocol, more rates hash is put online to secure the network, and the Lindy Effect continues to set in.

The price is slowly but steadily starting to move closer to the old historic high, and once it is broken bitcoin tears apart completely as the global FOMO (fear of running out) occurs. Few assets trade in the same cyclical fashion as bitcoin, going parabolic time and time again.

Why is this dynamic happening? Why do bull markets always see a top explode after an order of magnitude of appreciation?

For the most part, it is about the psychology of market participants and the underlying activity of those participants. An examination of the price, the realized price and the relationship between the two is revealing.

How could a potential run to $ 100,000 before the end of this year be looking for bitcoin, and why isn’t it as wacky as many think? While history doesn’t repeat itself, it rhymes often, which is why it may be helpful to look at previous bull running cycles to provide context.

In early September 2017, the price of bitcoin was hovering around $ 3,500, giving the asset a market cap of around $ 50 billion. The realized price of bitcoin was around $ 1,600 at the time (market cap of $ 25 billion).

Over the next four months, the price of bitcoin went parabolic, reaching $ 20,000 ($ 329 billion in market cap) for an increase of almost 500%. However, the realized price has “only” increased by 200%, which is quite telling.

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