DJIA and Bitcoin. Surprisingly similar trend! So what's next?

This is something I found disturbing yet familiar. Yesterday, out of curiosity, I superimposed the DJIA 30 years chart onto the #cryptocurrencies #Bitcoins BTC-USD 1 year chart. I scaled the 30  years DJIA chart to fit into the time frame of bitcoin and below is what I got. Surprisingly similar trend! A characteristic of a bubble.

I believe what happened to bitcoin (crash) is fuelled by greed and fear. After all the market is made up of humans so greed and fear will always be there (ok now we have robots). Hence, so too will bubbles, if left uncontrolled.

Here's what Alan Greenspan said:

Fear and euphoria are dominant forces, and fear is many multiples the size of euphoria. Bubbles go up very slowly as euphoria builds. Then fear hits, and it comes down very sharply. When I started to look at that, I was sort of intellectually shocked. Contagion is the critical phenomenon which causes the thing to fall apart.

As we know bitcoin began its downtrend from its highest point since mid Dec 2017. That represents a 45% drop so far. Before that, there was a melt-up starting from mid Nov 2017. What has taken bitcoin 1 year to unleash, Dow took 30 years because Dow is massive and hence slower. If we were to use this to infer at what stage we are in for the US economy, I say we are already at the melt-up stage and would probably continue for another 1-2 years before it all come crushing down (again).

Of course all these are merely conjectures on my part and you may think that it is utter nonsense but still I hope you enjoyed reading it. Anyway, nobody can perfectly predict what is going to happen. In the meantime enjoy the melt-up.

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