It is always necessary, as in technical analysis, to look at the past to predict the future. In statistical analyses, the probability of a trend or position going up or down will always depend - for graphical purposes - on one or more mathematical algorithms.
History can never be ignored when it comes to the inevitable repeatability of human concepts and customs in so-called different situations, but, in fact, what differs is only the time in which they occurred and, for the rest, the mode of operation is the same.
In 1593, the botanist Carolus Clusius, introduced on European soil, some tulip bulbs, brought from the city of Constantinople, Ottoman empire - present-day Turkey, Istanbul.
Initially for medicinal purposes, he planted it in his home garden. The beauty of the tulips, in the gray environment of the city, the tulips brought colors and their rarity stirred up social status.
These bulbs spread across the Netherlands shortly thereafter: everyone wanted to color their houses and perfume them. (To imagine that the sewage was dumped in the open in ditches....)
The classic laws of the market: supply and demand and volume by price came into play and tulips became commodities.
As the popularity grew, there were many derivations, many rarities, and many profiteers. The specials received exotic botanical names.
The rarest and most exuberant gave greater status in the high society of the Netherlands. This flower was coveted as an immovable luxury item.
Commercially, due to demand in the market, competition between producers, to serve, and between members of the elites to acquire them, intensified. Prices have gone up in the stratosphere.
By 1630, tulips, which were originally brought in for medicinal purposes, had become more valuable than houses, cattle, cargo ships. People traded everything for tulips - like gold!
In that decade, the concept of the future market was born: the producers, without keeping up with the demand, sold - as a reserve for people - seedlings that didn't even have bulbs. Modern principle of the futures market.
Until 1635, the price was soaring, rising steadily, until that moment. When the producers, in the futures market, were no longer able to guarantee an increase in production and, much less, the deliveries of expired futures contracts, the producers began to sell these bonds and their production surpluses at prices up to 1/3 lower than the practiced, to have capital liquidity.
This procedure caused an avalanche of sales, causing a devaluation impact of around 150% in just 6 months: note that this speed was absurd, since there was no electronic means of communication and a letter took 3 days to close the sales order !
In 1637, the fear of not guaranteeing delivery reached its apex, many speculators got rich and took their positions, privileged, before the big losses. Distrust contaminates the market. and a tulip and its bulbs were worth 100 to 200 times less, because there were many more people selling and flooding the market with the product!
Thousands of Dutch people slept rich and woke up poor! The commerce based on tulip-coins will collapse and lead to large trans-marine trades gone bankrupt! Holland depended on these businesses, it almost went bankrupt too!
The justice did not validate future contracts made from speculation, in an attempt to stop the charges. Some with success, some without.
In this way the tulip bubble of 1630 burst and nearly bankrupted a country. In smaller bubbles, almost every country in Europe also faced financial problems.
In time: this occurred in parallel with the bubonic plague. Tulips become a way to keep hope.
It remains the lesson for contemporary days. From this case study onwards, national and supranational regulations of the current financial market are drawn!
Any resemblance to what happens in current crypto coins is no coincidence.
Who is sensible, understand!
