"The role of information is crucial in making sound decisions with any sort of investment strategy. Within the framework of FMH, the impact of information availability can lead to changes in time horizons and liquidity. During times of stability, FMH states all investors share the same information. How information is perceived results in the individual investment decisions: a day trader may perceive price fluctuations and decide to sell, while a pension fund manager will place less value on price movements."
"Metcalfe's law states that the value of a telecommunications network is proportional to the square of the number of connected users of the system (n2)."
Digital blockchain networks appear to be following Metcalfe’s Law:
"Finally, the potential for identifying value bubbles that can be spotted as deviations in value from the model was discussed and illustrated using the data from one of the networks. Those value bubbles show up where repeated extremely high value increases are not accompanied by any commensurate increase in the number of participating users, or any other development that could give rise to the higher value."
Fundamental analysis: Bitcoin holds many of the same intrinsic values as the internet, therefore should also follow the same theories that have been applied to the internet and other telecommunication networks. The growth of bitcoin's value from sub $10,000USD to $20,000 was artificial, leading to a lack of strong support when it faced media news/speculations used to destabilize it; news that bitcoin investors themselves spread. Following Metcalfe's Law, we can hypothesize that the run up to $20,000 was a bubble and we are now seeing bitcoin return to its original support, at a higher fiat value, due to an increase in users.
Following the osc., we can see that historically price drops as it increases; this seems to be from panic selling causing oscillation to rise. As the osc. value decreases, bitcoin's dollar value naturally rises. I believe this is because of its natural growth as a coin, removing all the hype and FUD.
The fundamental reasoning for its value diving in recent times is due to news being spread to manipulate the market value. Korea's government, who said they would ban it, reversed positions more than a few times, apologized for being so confusing,
and even had inside trading with the officials who released negative statements on it. Now they are stating they do have a use for it.
China said they would ban bitcoin in mid-late 2017 and Antshares/$NEO took a nose dive. NEO is a centralized (for now) cryptocurrency that ties blockchain to ID; it utilizes $GAS to fund ICOs and was chosen by China because of NEO's vetting process for ICOs. They wanted to cut down on scams and track their citizens' use.
Referencing MEX_Exchange's fundamental reasoning: ICOs are funded with milliions of dollars in their pre/private stage from private investors and VCs; most credit cards have limits in the thousands. Limiting credit cards can shake market sentimentality, but only if cryptocurrency investors believe it to cause harm to its value. A lot of predictions by well respected entities definitely is a fundamental reason for $BTC to lower in the short term.