Bitcoin: The Top Is Probably Already In

Based on past price behavior it is likely that Bitcoin’s price has peaked, at least in the short-term.

If 63,500 USD does prove to be this cycle’s top it could create a negative shift in how Bitcoin is viewed. Despite slow advances in the underlying technology and a lack of real-world use cases, Bitcoin has continued to attract new investors based on its strong price performance and promise of asymmetric returns. New investors may become deterred by the high volatility and diminishing potential for 10x returns every 4 years though. Early investors who have significant wealth locked in Bitcoin may also begin to feel that it is time to realize some of their profits.

When looking at Bitcoin’s price history it is easy to overlook the impact of events like Silk Road, Mt. Gox, stock market fluctuations, regulator policy changes, COVID-19, and Elon Musk’s Twitter account. Bitcoin is a sentiment-driven asset and the flow of information impacting Bitcoin is likely more important than programmed supply changes. If the bull market is to resume there will need to be positive price catalysts, although it is unclear at this stage what they could be.