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“The Death of Bitcoin”
Market participants are strongly emotional
Bitcoin has been in an a cascading, accelatory downtrend ever since it broke down from its multi-month base of $6,000.
Many strongly believed that $6,000 was the bottom because of the amount of resilience this price level showed for many months.
Undoubtedly, this gave a lot of confidence to traders and investors alike and inevitably influenced their decision-making.
They probably exposed themselves to more altcoins, bought more Bitcoin.
Once a multi-month worldview of a $6,000 Bitcoin bottom effectively shatters in an instant — people react in unpredictable ways.
All of these reactions will be fundamentally rooted in emotion and the BTC price chart paints this sharp reaction in full view.
The peso problem
Bitcoin went through what economists would call the “peso problem.”
In the 1980s, traders and funds would flock to the Mexican peso. It showed periods of extended stability and was considered a safe haven for investment.
And people were incentivised to hold the peso due to favourable interest rates.
