Joost van der Burgt, an advisor at the Dutch central bank, said that the price of bitcoin will have at least one correction before the next rally up.
Burgt showed a correlation between data from the Google search engine regarding the “Bitcoin” keyword and the BTC graph. The list showed striking similarities from May last year to February 2018. However, in the last seven months bitcoin did not reflect the trend with Google:
“I suspect that the introduction of futures contracts could have caused deflation of the bubble before it reached a level where it could completely break,” added Burgt. In his opinion, there was also no panic phase, and instead only fear appeared. So the bubble on bitcoin has not burst fully yet?
Bubble … and it’s gone
In April and July, the price of BTC increased to $ 10,000 and $ 8,500 – respectively after rebounding from the support level of $ 6,000. Both impulses were triggered by a sharp increase in cryptocurrency interest in one day, on both occasions the BTC price increased from 6,000 USD to over 7 500 USD.
The compatibility between Google Trends data and the price graph has ceased to apply from February this year. In April, when Bitcoin’s price reached USD 10,000, the search trend continued to decline, despite the significant optimism that the market at that time showed. It can be argued that the stability of the price of bitcoin and its lack of traffic in the lower price range caused that the popularity of the keyword in search engines decreased.
Google Trends to the past?
In the second half of 2017, all newspapers and TV and Internet media informed about the cryptocurrency sector. Some major regions, such as South Korea and Japan, even broadcast debates on digital content on national TVs.
Even if the bitcoin price is USD 20,000 in the coming months and years, it is unlikely that trends in Google would show similar interest because 2017 was the year in which bitcoin was mainstreamed for the first time on a massive scale. At least that’s what Burgt thinks.
It is difficult to agree with his thesis. It is difficult to estimate which bubble amounted to BTC to the so-called mainstream, because the main cryptocurrency has already become an element of pop culture and the topic of public debate after the bull market of 2013. You can get the impression that the opinion of Burg is the result of his subjective observations, not a broader analysis of the crypto market. How do you think, however?
chart: Joost van der Burgt and the Dutch National Bank