Bitcoin (CRYPTO: BTC) is down 4% over the past 24 hours, currently trading for US$48,426 (AU$68,201).
The world's biggest crypto by market cap is down 14% over the past week and down 26% since this time last month.
And since we're throwing stats at you, Bitcoin has now tumbled 30% since 10 November's fresh record high of US$68,789, according to data from CoinMarketCap.
Even with those kinds of price moves, the token is still up 65% year-to-date. Which has many crypto investors pondering…
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Who's going to catch the Bitcoin falling knife?
You've probably heard the old investor adage, 'Don't try to catch a falling knife.'
It's a great saying as it brings a very vivid, potentially painful image to mind. It cautions about trying to buy a company who's share price has been, and still is, falling fast. While the company may be poised for a rebound, it could still fall much further. According to the adage, wait for some sign that the bottom is in before investing.
Cate Faddis, president of Grace Capital, used the adage to warn of dangers she sees in the broader crypto market. (Ethereum (CRYPTO: ETH) is also down 6% over the past 24 hours.)
According to Faddis (quoted by Bloomberg), "The problem with crypto is, who's going to catch that falling knife?" "I am very concerned about crypto – honestly, it reminds me of '08 with the real estate and it could spread to the entire market."
Chuck Cumello, CEO of Essex Financial Services, also sounded a note of caution, pointing out Bitcoin's wild volatility. "People have to understand truly, in my opinion, what it is. It's a speculative investment. A more mainstream investment doesn't drop 20% on a weekend. That just doesn't happen."
The bullish case
Plenty of crypto bulls remain optimistic about the price outlook for Bitcoin.
Bloomberg Intelligence's Mike McGlone agrees Bitcoin is still a risk asset but says it is gradually evolving in a digital reserve asset "in a world going that way".
"The key question nearing the end of 2021 is whether Bitcoin is too hot. Our chart shows the crypto fairly priced at about its upward-sloping 50-week moving average," McGlone said.
With crypto adoption still rising, McGlone forecasts Bitcoin could hit US$100,000 in 2022.
