Is Bitcoin A Bubble?

On 7th Dec, 2017 Bitcoin crossed a $14,000 barrier and within 10 hours of crossing that barrier it was being traded at outrageous price of $15,200. But, this wasn't the highest ever price. Just after few days bitcoin broke another record, on 17th Dec, 2017 its value soared to $20,000.

Ever since then value of Bitcoin has plunged to $6500.

Will it rise or fall further?

Why it may rise ?

Reason 1:

If we study graphs of past 3 years it suggests us that Bitcoin starts gaining momentum in the month of October and maintains this bullish rally till 1st or 2nd week of january.

Reason 2:

Whales may start buying. Whales are holders of large amount of Bitcoin. They are major worry for investors as they are directly involved in speculation. It is considered that whales may start buying Bitcoin which will help to surge price Bitcoin.

Why it may fall or burst ?

Reason 1:

The first thing that we should all remember is that Bitcoin is a currency. Treating Bitcoin as a commodity spoils the very purpose for which Bitcoin is made. Due to slow processing speed of Bitcoin it is usually not used as a currency as it increases the cost of transactions. Thus it further reduced liquidity of currency.

Reason 2:

Due to crackdown of central banks around the world the faith of general public is drastically reducing leading to negativity in market.

Reason 3:

Although market sentiment says that whales may buy Bitcoin but, it is a speculated sentiment. Whales may further sell Bitcoin to reduce price and afterward may buy them at lower price.

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