Bitcoin prices have fallen sharply in recent months. After suffering these declines, is the digital ... [+] currency heading for a recovery? Analysts weigh in. (Photo by Chesnot/Getty Images)

Bitcoin prices recently reached a six-month low, having declined more than 50% from their 2019 high of almost $14,000.

After suffering this pullback, has the digital currencys price bottomed out?

While many analysts are unsurprisingly bullish in the long-term, many of them are less optimistic in the short-term, emphasizing that the cryptocurrency could easily suffer further losses.

Market observers offered these predictions after bitcoin fell to nearly $6,500 on November 24th, its lowest since May, before recovering, approaching $7,400 the following day, CoinDesk figures reveal.

[Ed note: Investing in cryptocoins or tokens is highly speculative and the market is largely unregulated. Anyone considering it should be prepared to lose their entire investment.]

Bitcoin Overbought, Says Analyst

We dont see $6.5k as the bottom, although its the first strong candidate for that title, said Tim Enneking,managing director ofDigital Capital Management.

While there might be a move up before it happens, we expect bitcoin to drop below $6,000 before this correction is over, he added.

Analyst Marouane Garcon also weighed in, describing bitcoin prices as overbought.

Its nakedly obvious that we cant agree on a true price and its still extremely volatile to current events and even fake news, said Garcon, managing director of crypto-to-crypto derivatives platformAmulet.

I wouldnt be surprised if the price continued to drop.

However, not everyone had the same point of view, as Mati Greenspan, a cryptocurrency analyst who founded the newsletter Quantum Economics, stated that the retracement from the current peak may soon be coming to an end.

In his latest newsletter, Greenspan emphasized the following:

Its now been exactly five months since bitcoin topped out just below $14,000 per coin. Since then volumes have steadily decreased despite the introduction of Bakkt future contracts and Fidelity digital entering the space. Looking at Bitcoin's short history, we can see that the average drawdown is approximately 43% and tends to last 122 days.

Of course, past performance is not an indication of future results but just by the data, it would seem that the worst of this retracement might just be behind us.

The Halving

Several analysts also emphasized the potential impact of bitcoins next halving, which is currently scheduled to take place in May 2020.

When this event takes place, the mining reward, which is currently 12.5 BTC, will be cut in half, falling to 6.25 BTC.

Jeff Dorman, chief investment officer of asset managerArca, spoke to this recently.

While there is no new money coming in to soak up the supply, this supply is about to be cut in half, he noted.

More specifically, the rate at which new bitcoin enters the market will be cut in half, a development that has frequently been considered bullish for the worlds most prominent digital currency.

Bitcoin has rallied quite a bit following past halvings, enjoying notable price gains following the 2012 and 2016 events.

Disclosure: I own some bitcoin, bitcoin cash, litecoin, ether and EOS.

Excerpt from:
Bitcoin Fell 50% From Its 2019 High. Has It Bottomed Out? - Forbes

Photo by Jakub Porzycki/NurPhoto via Getty Images

F. Scott Fitzgerald said the test of a first-rate intelligence is the ability to hold two opposed ideas in mind at the same time and still retain the ability to function.

Bitcoin is the embodiment of this idea in markets, and why I suspect many in finance and business journalism dismiss its connections to the economy and other major asset classes. They write it off as a bizarre offshoot of finance more akin to a casino than an asset class. While that is true for most of the tokens, it is not for bitcoin. Viewing the King Crypto as a completely random roulette wheel thats detached from traditional financial markets and the economy isa mistake.

Right now bitcoin is signaling that volatility is on the way. To see why, one has to hold the ostensibly opposing ideas of bitcoin as a risk asset and also a store of value,at the same time.

Bitcoin is indeed much closer to a roulette wheel than just about anything else in traditional markets, but for enough of its investor base, it is a wager on a specific series of events happening. The likelihood of those events is very low, hence the sluggish adoption, risk of investment, and potential reward if bitcoin becomes widely accepted as a store of value.As evidenced by its unprecedented, astronomic volatility, bitcoin is extremely risky. Its trading history since becoming a household name reflects its nature as a risk asset: peaking in 2017 right before the stock markets frothiest peak of the bull market yet, breaking down ahead of the S&P 500s epic 4Q18 selloff, and gaining steam again this year just as the VIX dropped back to the bottom of its 2-year range.

But wait: bitcoin also trades like a safe haven.

It surged this year as the U.S-China trade war was looking like it might turn into a currency war, the Fed was reversing course, and the amount of negative yielding debt was mounting across the globe. As this backdrop fell into place, bitcoin, which many in the crypto space refer to as digital gold, traded closely in sync with actual gold, with the 30-day correlation between bitcoin and gold futures reaching a record high of 0.91 in mid-July.

Thinking about bitcoin as a very far out-of-the-money call option on its adoption event series is a helpful way to thinking about why bitcoin can trade both as a safe haven and a risk asset. It is a risky bet that certain economic events will happen mostly negative ones that spur big changes to the structure of financial markets.

But heres the kicker. There was sufficient overlap this year not just between the reasons for owning bitcoin and gold, but between the reasons for owning Treasury bonds and certain types of stocks, too. People bought bonds because they foresaw extensive central bank accommodation on the way and knew theyd have a buyer for government debt. Bond buyers were just as worried about the global economy as gold bugs, who themselves were touting a just slightly less manic narrative than the cryptoknights. In the stock market, investors funneled cash into bond-proxy plays like utilities, and expensive growth companies whose valuations are more easily justified in a world where rates are going seemingly infinitely lower.

Bitcoins crash is the most damning for gold, whose use-case as basically a more traditional bitcoin is looking less compelling by the day as economic data comes in ahead of bearish forecasts from this summer. Gold has already demonstrated that it is inclined to move in the same rough trends as bitcoin this year, peaking in September and now following bitcoins patterns of lower highs and lower lows. If inflation does not appear soon, the case for owning gold will take a big hit. And even if inflation does show up, its unclear how much gold will be able to respond, considering its big rise this year happened in the absence of inflation.

U.S. 10-year Treasury notes and gold have also traded in a tight correlation for almost all of the year. If Brexit is resolved amicably, European countries enact fiscal stimuli, Chinas economy stabilizes, or the U.S. is able to demonstrate steady growth in the face of a tariff war, Treasuries are likely to continue moving with gold. The price of bitcoin is now almost where it was in May. Gold and bonds by no means have to do the exact same thing as bitcoin, but if the need to own bitcoin is dropping this quickly, the need to own gold and bonds is going to come under further scrutiny. A move in the 10-year Treasury yield that takes it back to May levels would mean a 2.4% yield. This would be a shock to investors if it happened too quickly.

Stocks are tricky. While bitcoins explosive action in 2017 was a good sign that concurrent euphoria in stocks would also be short-lived, the signaling relevance of bitcoin for stocks is probably waning. Stocks have indeed been kept afloat to some degree by the same force that pushed investors into bonds and gold the expectation and delivery of interest-rate cuts by central banks. As such, the S&P 500 is getting expensive again and needs earnings expectations to turn upwards to justify its price. If that happens, equities will have a good buffer to volatility elsewhere. If it doesnt happen soon, its unlikely stocks will be able to retain their elevation for long in an environment where bitcoin, the worlds riskiest asset, is now 50% off its high.

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Bitcoin is Screaming to Investors That Volatility is Inbound - Forbes

Bitcoin is the emperors new clothes of financial commodities. Its been prancing up and down money street with nothing on for years, despite the fact that lots of thoroughly sensible people have been playing the role of the boy in the fablewho says ere, ees got nuffink on.

Does the fact that the cryptocurrency has endured two major crashes in the space of just three days signal a turning of the tide? The tipping point at which it runs back into the palace in search of a robe accompanied by a hail of stones from its victims?

Ive been waiting for it to happen. It almost always does when people put together a load of old cobblersand tout them as hot investments. Remember collateralised debt obligations or CDOs? They were created by the packaging up of dodgy mortgages that had been mis-sold to poor people, which were given a fancy sounding name so they could be sold around the world to people who should have known better.

Sharing the full story, not just the headlines

When sufficient numbers of them realised that CDOs were wearing the emperors new clothes the result was near global financial meltdown that was only narrowly averted courtesy of great wads of taxpayers cash.

The popping of Bitcoins bubble isnt likely to lead to something quite so dramatic, although therell be a lot of pain. There always is. Youll certainly find it high up on the worry lists of most regulators, who will kept very busy dealing with the aftermath.

On 3 January, 2009, the genesis block of bitcoin appeared. It came less than a year after the pseudonymous creator Satoshi Nakamoto detailed the cryptocurrency in a paper titled 'Bitcoin: A peer-to-Peer Electronic Cash System'

Reuters

On 22 May, 2010, the first ever real-world bitcoin transaction took place. Lazlo Hanyecz bought two pizzas for 10,000 bitcoins the equivalent of $90 million at today's prices

Lazlo Hanyecz

Bitcoin soon gained notoriety for its use on the dark web. The Silk Road marketplace, established in 2011, was the first of hundreds of sites to offer illegal drugs and services in exchange for bitcoin

On 29 October, 2013, the first ever bitcoin ATM was installed in a coffee shop in Vancouver, Canada. The machine allowed people to exchange bitcoins for cash

REUTERS/Dimitris Michalakis

The world's biggest bitcoin exchange, MtGox, filed for bankruptcy in February 2014 after losing almost 750,000 of its customers bitcoins. At the time, this was around 7 per cent of all bitcoins and the market inevitably crashed

Getty Images

In 2015, Australian police raided the home of Craig Wright after the entrepreneur claimed he was Satoshi Nakamoto. He later rescinded the claim

Getty Images

On 1 August, 2017, an unresolvable dispute within the bitcoin community saw the network split. The fork of bitcoin's underlying blockchain technology spawned a new cryptocurrency: Bitcoin cash

REUTERS

Towards the end of 2017, the price of bitcoin surged to almost $20,000. This represented a 1,300 per cent increase from its price at the start of the year

Reuters

On 3 January, 2009, the genesis block of bitcoin appeared. It came less than a year after the pseudonymous creator Satoshi Nakamoto detailed the cryptocurrency in a paper titled 'Bitcoin: A peer-to-Peer Electronic Cash System'

Reuters

On 22 May, 2010, the first ever real-world bitcoin transaction took place. Lazlo Hanyecz bought two pizzas for 10,000 bitcoins the equivalent of $90 million at today's prices

Lazlo Hanyecz

Bitcoin soon gained notoriety for its use on the dark web. The Silk Road marketplace, established in 2011, was the first of hundreds of sites to offer illegal drugs and services in exchange for bitcoin

On 29 October, 2013, the first ever bitcoin ATM was installed in a coffee shop in Vancouver, Canada. The machine allowed people to exchange bitcoins for cash

REUTERS/Dimitris Michalakis

The world's biggest bitcoin exchange, MtGox, filed for bankruptcy in February 2014 after losing almost 750,000 of its customers bitcoins. At the time, this was around 7 per cent of all bitcoins and the market inevitably crashed

Getty Images

In 2015, Australian police raided the home of Craig Wright after the entrepreneur claimed he was Satoshi Nakamoto. He later rescinded the claim

Getty Images

On 1 August, 2017, an unresolvable dispute within the bitcoin community saw the network split. The fork of bitcoin's underlying blockchain technology spawned a new cryptocurrency: Bitcoin cash

REUTERS

Towards the end of 2017, the price of bitcoin surged to almost $20,000. This represented a 1,300 per cent increase from its price at the start of the year

Reuters

The odds strongly favour it blowing up at some point because it always does. These things have been happening since the 17th century when people got wildly over excited by tulips during the Dutch golden age. Economic historians could probably point you in the direction of even earlier instances.

The thing about Bitcoin is there isnt even a bulb to put in the ground from which something pretty should grow.

As my colleague Hamish McRae wrote last year, it fails every test to be considered alongside what we commonly understand as money. Its a highly speculative investment commodity with nothing behind it other than sentiment.

A share is clothed in the earnings stream delivered by the products sold by the issuing company. A real currency is dressed in the prospects of the economy that uses it, and the willingness of a central bank to deploy its reserves to support it.

What is cryptocurrency and the technology behind bitcoin and its rivals?

They thus have a notional floor (although the bottom can still fall out which is why countries and companies go bust).

Bitcoin has nothing. Zip. And yet sentiment is a powerful thing. Already there have been articles aimed at boosting it by taking about how Bitcoins represents a hot buying opportunity now its lost its legs. They have graphs. They have lots of big, clever sounding words that dont mean very much. I saw one accompanied with a tweet talking about its parabolic upward trend. No, really. To those who look at that and say What on Earth?, what it means as that the person who said it is really really clever and should be taken seriously. The emperors new birthday suit is covered in fancy gold braid. Dont you see it? Get online, the hot investment is now affordable! Buy, buy, buy.

I got a giggle from one talking about the improving fundamentals of Bitcoin.

Thats classic finance speak. The word fundamentals usually refers to the prospects forcorporate earnings, or what a central bank might do to boost a currency (such as raising interest rates). There are lots of analysts paid lots of money to write reports and produce graphs based on how stocks, currencies or commodities (like gold, fine wine or frozen concentrated orange juice) might perform based on their fundamentals.

Bitcoin, however, doesnt have any fundamentals other than the fact that some people think it might go up from here because its relatively tightly-held and maybe the big the sellers have all been flushed out.

And you know what? It will go up if the herdputs enough money down.

Its happened before and it will keep happening until it doesnt. At which point it will leave a trail of tears behind it and the worlds regulators will be prodded into writing reports about why they didnt shut the thing down (theyd probably like to if they could find a way to do it) before the punters got hurt. People will get very cross. Fingers will be pointed. But no one will go to jail.

No one will so much as a slap on the wrist. And well all move on to the next one of these.

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Bitcoin has crashed again little wonder as it fails every test to be considered a currency - The Independent

Fidelity Investments evolution from mutual fund giant donating money to white nationalists to cryptocurrency player with correspondingly less money to donate to white nationalists took another step forward last week. The New York State Department of Financial Services, presumably in between howls of laughter, awarded Fido a crypto license. Obviously, fake money immediately took another nosedive, with bitcoin falling to its lowest level in six months as the Chinese once again took a large needle to the bubble and others recognized the Fidelity news as the contraindicator it is, once again putting John McAfees penis in mortal danger.

Throughout the long boom and (more common) bust cycle of bitcoin, swoons such as these have prompted the inevitable question, is now the time to buy bitcoin? In spite of the obvious answer to that question, we regret to inform you it has been posed again (and not by John McAfee, who certainly hopes so).

Wall Street veteran Peter Brandt, who made a name for himself by predicting bitcoin's devastating 2018 bear market, has called bitcoin's low for July 2020two months after bitcoin's closely-watched halving event. As well as the May bitcoin halving, which will see the number of bitcoin rewarded to miners cut by half from 12.5 bitcoin to 6.25 bitcoin, bitcoin investors are hopeful next year will bring an increase in the number of bitcoin retail investors and people using bitcoin and cryptocurrencies for payments. Bakkt's bitcoin futures daily volume hit a new all-time high, according to data from Intercontinental Exchange, with some $20.3 million across 2,700 futures contracts on Friday.

Bitcoin Has Crashed AgainBut Is This When To Buy Bitcoin? [Forbes]Bitcoin Matches Record Losing Run in Fall to Six-Month Low [Bloomberg]Bitcoin Drops Below $7,000 as China Euphoria Fades [WSJ]Fidelitys crypto company secures New York state license [Reuters]

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Bitcoin Is Cratering Again, Some People Believe For The Last Time, Again - Dealbreaker