by: Elizabeth Balboa, Benzinga Staff Writer
Bitcoin traders were eager to see the end of January, which dragged the cryptocurrency beneath December lows.
But the winter blues continue. Bitcoin neared $9,000 Thursday — a rate less than half of the all-time high struck weeks before.
Editor's note: Bitcoin's rout continued Friday morning, with BTC falling under the $8,000 level.
A Long-Foreseen Stall
The dip wasn’t entirely unexpected, even by bitcoin enthusiasts. In fact, it was just about due.
“I had bitcoin topping out around $6,700 last year, so what we saw from late November to the middle of December was a classic case of fear of missing out,” Michael Graub, blockchain consultant and principal at a private family office, told Benzinga.
Jeff Goldman, co-founder of JC Trading and Marketfy’s Crypto Prophet, turned bearish on bitcoin around $15,000, when he expected other cryptocurrencies to start siphoning funds.
What’s The Problem?
The market seems to prove his foresight. Goldman attributes the ongoing sell-off to rotation from bitcoin to other cryptos, as well as profit-taking.
However, Joe Saluzzi, partner and co-founder at Themis Trading, credits uncertainty around exchanges and counterparties, and Graub points to a natural re-righting and a “coordinated attack” from potential losers in the financial industry.
“I think what we have seen over the past six weeks is a correction, but technically it’s now a bear market if you want to use legacy terms,” Graub said. “I think what we are seeing is a return to bitcoin’s natural trend, which went parabolic as the CBOE, CME Futures were announced along with all the hype from CNBC and Mike Novogratz.”
But Jim Angel, associate professor of finance at Georgetown University, detects a leak in the bubble.
“There appears to be no single catalyst that will cause the value of BTC to plummet to its intrinsic value (~$0), but lots of minor ones that are leading to a deflation of the bubble,” Angel told Benzinga. “Clearly there has been a lot of bad news with regulatory crackdowns and major hacks.”
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