Last Week In Bitcoin is a series discussing the events of the previous week that occurred in the Bitcoin industry, covering all the important news and analysis.
Despite briefly dipping below $30,000 earlier in the week, the last week has been relatively steady for bitcoin. Although nothing major happened to either give the bitcoin price a boost or to push it off a cliff, the market bounced back with relative ease after briefly dropping just below $29,000 on some exchanges. However, by the weekend, it started climbing again breaching $34,000 by late Sunday evening. Despite recent dips to $30,000 and below, I am still hyper-bullish with my outlook on the months ahead for bitcoin.
Chart Of The Week
Much like last week’s chart, the long-term outlook on bitcoin is relatively bullish. The chart above compares bitcoin’s price to its stock-to-flow ratio in U.S. Dollars since its inception in 2009. As evident, the data once again suggests that bitcoin is primed for a breakout over the coming months that will far exceed $100,000 per bitcoin. The stock-to-flow model compares the stock (availability) of an asset or commodity to the flow of production.
Let’s look at the reasons to be overly bullish for the months ahead. Later this week, Bitcoin’s mining difficulty will decrease by its highest rate ever. This usually has an upwards effect on the price as miners expel even less energy to obtain bitcoin. However, miners are being squeezed with China’s crackdown, and miners are liquidating bitcoin and spending money to move their operations, or shut down completely. This will likely take a few weeks, if not a couple of months, to resolve.
Then we have El Salvador, an entire country adopting bitcoin as legal tender. This most definitely isn’t priced in yet, not by far. Besides that, other countries are vocal about their intent to follow in El Salvador’s footsteps; earlier this week, Tanzania suggested they may do so. In September, every…