Bitcoin prices are sliding again Thursday, and the decline may be triggering some short-term bearish alarm bells with the asset already technically in a bear-market after seeing record highs earlier in January.
Values for the world’s most prominent cryptocurrency were off by over 10% around Thursday’s lows at about $31,000, with the crypto having shed 12% over the week, according to FactSet data.
A single bitcoin
trading on CoinDesk was valued at $32,357, off 7.5%, at last check.
But investors were keying in on recent comments made by financial market participants, which may also be helping to knock prices around.
Indeed, Guggenheim Partners Chief Investment Officer Scott Minerd, a recent proselyte from traditional Wall Street instruments to cryptos, told CNBC on Wednesday that he believed bitcoins may stage a retreat back to $20,000, after reaching a record peak at $41,962.36 on Jan. 7, according to CoinDesk.
“For the time being, we have probably put in a top for bitcoin for the next year or so,” Minerd told the business network.
Minerd also told Bloomberg News, weeks ago, that his price outlook for bitcoin was $400,000.
Since its recent peak, bitcoin has retreated by at least 20%, meeting the commonly accepted definition for a bear market in an asset.
The slump in bitcoins also has taken it below a near-term moving average, the 20-day exponential moving average, or EMA, at $32,544, according to FactSet data.
EMAs, like simple moving averages, are sometimes used by technical analysts to gauge short-term bearish and bullish trends in asset, and can be useful for bitcoins which are prone to powerful swings in a daily basis.
Hodlers—a popular misspelling of the word “hold” or “holders” in the crypto community—tend not to focus on the short-term moves in cryptos and hold the asset long term. And it is often difficult to peg a specific move in virtual assets to any related news item.
However, markets have been processing the dramatic moves by virtual assets in recent weeks and months as well as assessing the prospects for bitcoins and other assets in the Biden administration.
Earlier in the week, Janet Yellen, the President Biden’s nominee for U.S. Treasury Secretary, said she would consider curtailing digital assets, saying that she feared its use for money laundering and other malfeasance.
On top of that, some advocates worry that Gary Gensler, a former head of the Commodity Futures Trading Commission and a professor of cryptocurrencies at Massachusetts Institute of Technology, may scrutinize bitcoin regulation, as Biden’s pick for Chairman of the Securities and Exchange Commission.
Still, a number of investors often view bitcoin’s pullbacks as opportunities to increase their stakes in the speculative market, which is often described as one that reflects many of the characteristics of an asset bubble.
Minerd’s Guggenheim is one among a number of institutional investors who have taken notice of bitcoin’s price rally and have sought to gain exposure to the blockchain-backed asset.