The Network Effect: Here's Why Bitcoin Is Going Much Higher
Bitcoin (BTC-USD) (COIN) has been in a bear market for about eight months now. Ever since the price peaked at nearly $20,000 in December Bitcoin has been in a downward spiral, and has dropped by roughly 70% from peak to trough. Nevertheless, Bitcoin is showing signs of stabilization, and has successfully defended the $6K level on four separate occasions. The cryptocurrency is seemingly building a base around the $6,000 level, and its price is unlikely to go much lower from here. In addition, Bitcoin’s network effect coupled with other elements should drive its price significantly higher over the long term. The Bitcoin bear market will likely conclude relatively soon, which makes this a good time to add to positions in Bitcoin as well as in other systemically important digital coins. For now, the Bitcoin bear market continues as the cryptocurrency failed to break out in late July. This is not unusual though, as we’ve seen prolonged declines in Bitcoin before. The current rout closely resembles the early to mid-stages of Bitcoin’s prior bear market that lasted around a year and a half, and saw prices drop by approximately 80% from peak to trough before the recovery began.