It’s bad news for Bitcoin bulls today, as the coin sits around $48,000 after moving all of the way down to near $41,000, or roughly 2/3 of its highest values over the past year.
$60,000 was exciting – and you heard a lot of people talking about Bitcoin at $500,000 or $100,000.
Now it seems that many of those prognosticators have quietly retracted their predictions and Bitcoin’s future prices are really anyone’s guess.
“As a sense of déjà vu pervades markets, analysts are coming to terms with the fact that the end of Q4 2021 will likely not produce the blow-off top that they had anticipated,” writes William Suberg at Cointelegraph. “There is also concern that another, deeper, BTC price floor may have to enter before a genuine recovery takes place.”
Suberg points to the derivatives market as one indicator of Bitcoin’s troublesome price action.
“A focus on the sustainability of price recovery will be derivatives markets after their cascade of position liquidations,” Suberg writes, appending that analysis to chart data showing some troubling changes.
Then there’s the CPI data…
Economists on average expect next week’s CPI print for what happened in November to be 6.7% year-over-year (up from 6.2% in the month prior) and for the month-over-month print to be 0.7% (down from the month prior’s 0.9%),” financial commentator Lyn Alden tweeted yesterday, as quoted in Suberg’s story noting the possible consequences for BTC.
So what’s with Bitcoin’s extreme decline?
Some point to the new Taproot soft fork upgrade that is supposed to allow for better data on the blockchain activity for Bitcoin itself. This, they say, can usher in uncertainties that can change coin price action.
Others suggest that concern about Mount Gox is also an issue, seven years on.
“(Mt. Gox) Trustee Nobuaki Kobayashi confirmed last week that 141,000 BTC ($8 billion) under custody would soon be distributed among those impacted by the Mt Gox fiasco,” wrote Anthony Cuthbertson Nov. 23 at the Independent. “Data from blockchain market intelligence firm Glassnode suggests that more than three quarters of the 18.8 million bitcoins in circulation are actually illiquid. This means the MtGox coins represent more than 3 per cent of the 4.2m bitcoins in constant circulation. If all of them were to be cashed in at once it would cause the price to crash, at least over the short term.”
If you have significant Bitcoin (or Bitcoin-adjacent) holdings, it may be time to recalibrate your position, because the coin now has quite a way to claw up to regain its prior ascendancy.