Bitcoin’s (BTC) price is down 3% to start the trading week and hovering around $86,000 as nervous investors turn more risk-averse.
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Many analysts and crypto strategists are growing increasingly skeptical that we’ll get a year-end rally in cryptocurrencies as trading volumes and prices continue to decline. Bitcoin has risen as high as $94,000 over the past week but has been unable to maintain the momentum and turned lower.
It’s been a similar story since Bitcoin hit an all-time high of $126,300 in early October. Each attempt at a recovery and rally has failed and the price of BTC continues to slip lower. The largest cryptocurrency by market capitalization is now down 8% this year.
Bitcoin ETFs Weaken
Strategists note that flows into Bitcoin exchange-traded funds (ETFs) have weakened in recent weeks, exacerbating the price decline. In a note released on Dec. 14, 10X Research said that trading in BTC is “very depressed,” having declined 20% week-over-week. The research note concludes that there’s “a lack of conviction” in cryptocurrencies right now.
Other analysts highlight that Bitcoin is on pace for its first significant decoupling from stocks since 2014 as the S&P 500 has rallied 16% this year. The current decline of Bitcoin is a reversal from the typical uptrend seen in December. On average, Bitcoin has gained 9.2% in December since 2014, according to Dow Jones Markets data. But this December, Bitcoin’s price is down 1.2%.
Is Bitcoin a Buy?
Most analysts don’t offer ratings or price targets on Bitcoin. So instead, we’ll look at the three-month performance of BTC. As one can see in the chart below, the price of Bitcoin has fallen 21.81% in the last 12 weeks.
