If you’re perplexed when it comes to cryptocurrency, remember, you’re not the only one for this perplexity. The rapid and stratospheric spike of bitcoin prices towards $20K and its jerk is all a little dizzying and dramatic.

When a single bitcoin of yours bought within the range of around $750-$1000 just a year ago is now worth $10,000, then how would you probably spend it? This is just one side of perspective view.

On the contrary, an aggressive investor’s the same single bitcoin worth $20K just six months back has now become $9,333, isn’t this puzzling?

But never forget, after shedding billions of dollars for several months, the price of Bitcoin seems to be in recovery. Although the Bitcoin ‘boom’ that took place near the end of 2017 has veritably ended, the cryptocurrency is still as popular and controversial as ever.

We explicitly illustrated about booming cycle of the price of BTCUSD back in December in our previous post, please refer below weblink for further reading:

https://www.econotimes.com/FxWirePro-When-entire-universe-of-risk-averse-gamble-on-Bitcoin-asset-bubble-booming-cycles-have-so-much-to-lure-1054608

After going through above article, you may probably slightly convinced about the booming cycle and the sharp rallies and steep slumps aren’t new in BTCUSD price behaviour, likewise, after the steep slumps from the all-time highs of $19,891, the bulls again hold firmly after retracing 78.6% Fibonacci levels of highs of December-2017 & lows of July-2017 (refer abive chart).

Well, after all these topsy-turvy oscillations of bitcoin prices (but with little upside bias), a couple of interesting questions strike our shrewd mind. Is this Bitcoin’s correction or bubble or another boom-cycle? How is the value of a bitcoin determined?

Contemplating the recent developments and prime characteristic of this cryptocurrency, we reckon that the demand/supply equation to drive the fluctuating valuation, controlled by a pre-determined scarcity. (Here, the term “pre-determined scarcity” seems little exciting, isn’t it?) The system has been designed to prevent more than 21 million bitcoin from ever existing.

It sounds a lot, but when you take into account that this is a global currency, and the value fluctuates, this embedded scarcity infers the value.

Dear readers, we’ve already stated but now reiterate that when an industry or a product that’s newly invented or maybe still under inception/development stage, such sort of speculative moves are quite common if you consider the lifecycle. Remember, if this’s the case with any industry or a product, bitcoin has been currency system and it is yet to evolve. The major robust uptrend should get the support from the bullish momentum.

Currency Strength Index: FxWirePro's hourly BTC spot index is flashing at 71 levels (which is bullish), while hourly USD spot index was at 21 (mildly bullish) while articulating at (10:34 GMT). For more details on the index, please refer below weblink:

http://www.fxwirepro.com/currencyindex

FxWirePro launches Absolute Return Managed Program. For more details, visit:

http://www.fxwirepro.com/invest