The question of whether Bitcoin is poised for a rebound is on many investors' minds, especially after a significant price downturn. A prominent whale, who initially purchased Bitcoin at a mere $1 per coin, has now completed their sales, a development that some interpret as a potential signal for market stabilization given the recent trend of substantial whale sales. This has also brought to the forefront discussions about the influence of quantum computing on market behavior and the validity of claims that such advancements are spurring these sales.
Is Bitcoin Ready to Rebound?
Bitcoin's price has experienced a notable decline, dropping nearly 32% over the past 45 days, a level that has historically marked the peak pain point of previous major corrections. On two prior occasions when corrections began, the market ceased sales once prices fell to this 32% threshold. The recent formation of a daily candle with a long lower wick suggests that selling pressure might be nearing exhaustion, potentially setting the stage for an eventual rebound.
Recent commentary from Jim Bianco highlights that spot BTC ETF investors have reached significant loss levels. Fidelitas Lex suggests that this situation indicates an imminent bounce-back for the cryptocurrency.
“Institutional investors in BTC ETFs are, on average, at a loss. Fortunately, bounce time is here.”
An examination of market charts reveals a pattern where, during the dips observed in April and June of 2024, the average cost basis of ETF investors served as a support level, which was subsequently followed by swift market recoveries. The current market conditions are being closely watched to see if this historical scenario will repeat itself.
Bitcoin and Quantum Technology
Previous discussions regarding advancements in quantum computing concluded that these developments would not pose a threat to Bitcoin for a considerable period. In the unlikely event that quantum computing does become a threat, it is understood that the existing encryption standards can be strengthened. However, Ray Dalio, in a recent statement, suggested that this is a significant risk. If Dalio, who is also a Bitcoin investor, proves to be correct in his assessment, the implications for the cryptocurrency market could be substantial.
Mel Mattison has addressed these concerns directly:
“If BTC is being sold due to quantum decryption tech, individuals should withdraw funds from every bank and sell shares. JPM should have lost 20% of its value. Every account would become hackable. Moreover, BTC relies on the SHA-256 encryption algorithm, which is stronger than RSA.”
The Whale Who Sold All His Bitcoins
In 2011, Owen Gunden acquired 11,000 BTC at a purchase price of $1 per coin. Although Bitcoin's value briefly dipped below $1 during that year, it subsequently embarked on a remarkable upward trajectory. After years of patient holding, this whale has now completed his sales by sending his remaining holdings, valued at $230 million, to the Kraken exchange. This early adopter, often referred to as an OG whale, was among those who began selling in October, and his exit from the market is now final.
