Noise vs Signal in Bitcoin World: Learn to See the Bigger Picture
Focus on what really matters.
|Sylvain Saurel||Jul 3, 2020||4|
In life, it’s easy to let the small, insignificant details of everyday life take precedence over the essential things. Many people make the mistake of concentrating on the short term rather than taking a step back to see things in the medium and long term.
By making the mistake of focusing only on the short term, you will have a bad view of things. Your vision will be distorted.
In order to be able to better grasp the reality of things, you must be able to step back and see the bigger picture. This is a quality that people who achieve great things in life are able to demonstrate.
Experience greatly helps to develop this ability.
In the Bitcoin world, it’s exactly the same thing. Currently, many people make the mistake of focusing on the short term. They find Bitcoin boring because its price has been stagnating in the $9K — $10K range since the beginning of June 2020.
In my opinion, these people are letting noise become too important when they think about Bitcoin.
By doing so, they risk giving in to the temptation to leave the Bitcoin world by selling their Bitcoins. Many surrender in this way. If you were to go down this path, you would be making a monumental mistake.
The whole point for you is to step back and focus fully on the signal.
If you are able to do this, you will understand that the signal is extremely bullish right now in the Bitcoin world. While some complain that its price is stagnating, Bitcoin’s fundamentals are strengthening on a whole bunch of important metrics.
A tweet from the CTO of Glassnode, a company that monitors activity on the Bitcoin network in real time, highlighted several promising things:
As you can read, the use of Bitcoin is currently increasing.
Even better, 61% of the Bitcoin supply has not moved for at least a year. This tells us that despite a stagnation in Bitcoin price at the moment, a majority of Bitcoin users are in Bitcoin HODLer mode.
Not all of these people do this for fun. They do so because they are convinced that Bitcoin price is promised to a strong bull market in the next 18 months.
The current period of calm is important because the foundations for the next bull run are being built.
The metrics highlighted by the Glassnode CTO are close to the levels seen in 2016 and 2017 after Bitcoin’s second Halving. Bitcoin’s Bull Market then started. It brought Bitcoin price to a record high of $20,000.
Currently, the Bitcoin world is in the midst of a noise vs signal battle. Those who will be able to see the bigger picture will be able to focus on the signal, which is what really matters.
They will continue to take advantage of the current calm to accumulate more Bitcoins, while continuing to learn more about Bitcoin and the economy in general.
Blinded by ambient noise, others may well capitulate by selling their Bitcoins guided by irrational fear.
All of this suggests that a drop in Bitcoin price may even occur in the $6K-$7K area in the near future. Once the market is purged of those who believe the least in Bitcoin, the bull market could then begin in earnest.
In the meantime, it’s up to you to take a step back to focus on the signal.
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