Why is Bitcoin down? Profit-taking, quantum fears drag BTC

BTC dropped to $94K amid quantum concerns and profit-taking.
Will the king coin rebound above $100K?

As a seasoned researcher with over two decades of experience in the financial markets, I’ve seen my fair share of market fluctuations and technological advancements. The recent drop in Bitcoin (BTC) to $94K amid profit-taking and quantum concerns has caught my attention.

On December 9th, a Monday, the value of Bitcoin [BTC] fell to approximately $94,100. This decrease was attributed by market analysts to an increase in selling for profits and heightened security worries that stemmed from Google’s recent quantum computing update.

Profits and quantum concerns

Based on reports from cryptocurrency trading firm QCP Capital, significant option traders secured their profits when Bitcoin reached $100K and moved those earnings towards call options that expire in March 2025, indicating a bullish prediction for Bitcoin prices between $130K and $150K.

Today, I observed traders cashing out their long BTC positions with an expiration date of December 27, 2024, at the price of 100k, likely due to profit-taking. It’s also possible that they are shifting these positions to March, potentially aiming for prices between 130k and 150k.

According to QCP Capital, this situation might postpone a significant rise over $100K in the immediate future. Furthermore, they stated that Bitcoin is expected to stay within a specific price range until the end of the December festivities.

Traders cashing out on Bitcoin $100,000 call options indicates a large amount of flexibility in the market. Funding rates for perpetual contracts are relatively stable or slightly increased. It seems that we might experience a period of price stability during the holiday season.

The weak market sentiment might also be accelerated by the recent quantum breakthrough by Google’s Willow – A perceived existential threat to Bitcoin encryption.

While traditional computers lack the ability to decrypt Bitcoin’s network and wallet protections provided by contemporary cryptographic algorithms, quantum computers possess the capability to bypass such security measures.

Indeed, Google’s recent update has caused a buzz within the cryptocurrency community, as some users have voiced their worries regarding Bitcoin’s security. A participant even asserted, (assertion made by a member)

“Google’s CEO brings alive the Great Bitcoin Short Thesis right as #BTC kisses $100k.”

Nonetheless, certain experts have played down the immediate influence of quantum computing, suggesting it might take several decades before quantum technology could breach Bitcoin’s security measures.

Some added that Willow had only 105 qubits, while it would take millions of qubits to breach BTC.

“Willow is 105 qubits. To comprise bitcoin it’s estimated to need 13 million to 1.9 billion qubits”

In other words, the update emphasized the necessity for creating Bitcoin that’s resistant to quantum computing. As researchers investigate potential solutions, it’s possible that a soft fork (an upgrade) will bring about its realization.

Looking at technical analysis, Bitcoin’s price showed a significant discrepancy following the flash crash on the 5th of December. Historically, such price disparities often get retested before the trend resumes.

On the 9th of December, Sunday, cryptocurrency trader Crypt Nuevo foresaw that Bitcoin might dip to around $94K in order to rectify the price disparity (approximately half of the candlestick’s wick). This forecast was confirmed just a few hours afterwards.

Now that the price imbalance has been cleared, will the price climb higher?

Whether this will occur or not is yet to be determined, but as of the latest update, there exists a significant potential for increase in price due to substantial upside liquidity (leveraged shorts) ranging between $98,000 and $104,000 (prominent orange levels). This could potentially lead to more dynamic pricing.

2024-12-10 11:52

Profits and quantum concerns

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