Search post, tags and authors
Bitcoin Being Proclaimed Dead Again is A Bullish Sign

Bitcoin Being Proclaimed Dead Again is A Bullish Sign

By Oreld Hadilberg
Reviewed by Tony Spilotro

Table of Contents

As the dust from the FTX scandal starts to slowly settle, proclamations of crypto being “dead” have started to make their rounds again. This time, the declaration appears to come from experts from the traditional investor base, with a Standard Chartered Bank analyst warning that Bitcoin could drop to $5,000 in 2023 due to contagion effects of the FTX scandal. Next came CNBC host Jim Cramer, who urged viewers to exit all crypto, claiming without giving any proper reasoning that tokens like XRP, Dogecoin, Cardano, and Polygon could possibly fall to zero. Then, famed emerging markets investor Mark Mobius also warned that Bitcoin could crash another 40% to $10,000 amid continued rising interest rates. Last but not least, on the last day of November, the European Central Bank (ECB) even wrote a blog that declared that Bitcoin is on the “road to irrelevance” and warned banks against interacting with digital currencies.

The recent negativity does not just stem from traditional market experts, crypto traders are also at their most pessimistic. Amid the string of negative contagions from the FTX fallout, social media mentions of words like “dead” and “deadcoin” jumped to all time high levels in late November.

Crypto Experts See Bitcoin’s Obituary as Bullish

The outlook from crypto market veterans however, could not be more different. Battle experienced crypto veterans view things very differently from traditional market players, who in all respect, do have a nick to pick with the burgeoning new asset class due to a possible lack of understanding, or simply, out of the fear of a threat to its existing status quo.

While some may argue that beauty lies in the eyes of the beholder, it has to be emphasized that blockchain analytic firms use empirical data instead of emotions to draw their conclusions, as opposed to the meaningless personal opinions from the traditional market experts who have no clue how to value crypto assets. As such, the analysis of blockchain analytics firms ought to be given more weightage than say, a TV program host who is but human dishing out advice based on his own personal feelings.

One example of a blockchain analytics firm that uses data is Santiment. According to the firm, the analysis of the historical performance of the price of cryptos has revealed the exact opposite outcome predicted by investors and traders, the firm went on to elaborate that such extreme levels of pessimism traditionally increases the probability of a crypto price bottom.

Study Shows That Market Bottom Coincides With Frequent Bitcoin Obituaries

In fact, the popular crypto website recently did a report that chronicled the “demise” of Bitcoin by mainstream media. It counted that Bitcoin has been declared “dead” by mainstream media for 467 times, first at the end of 2010 when Bitcoin was just a few cents, to the most recent declaration at the end of November in a blog post by the ECB.’s study showed that if anything, predictions of Bitcoin’s demise appear to be a contrarian indicator, with the frequency of “obituaries” clustering around previous cyclical bottoms.

Looking at the two diagrams above from NYDIG and, it definitely looks like a higher frequency of the mention of the “death of Bitcoin” has coincided with the marking of the cyclical bottom of Bitcoin’s price in both of the last two crypto bear markets.

Thus, with this information, it would make sense to deduce that the current spike in the number of “death” mentions about Bitcoin and crypto could be an indication that Bitcoin is reaching its bottom.

Looking at the 2021 cycle chart below however, it may need to take more of such obituaries to come in more frequently to be able to confidently call a bottom, as the number of incidences do not yet appear to be as numerous as that in the previous two cycle bottoms yet.

However, this is a good start and is a good enough reason that astute crypto investors should get more bullish about the market and position themselves correctly. Traders should definitely try not to get caught holding short positions, as we could be in the last stage of the bear market, if not, already stealthily at the beginning of a new bull market.

The above are the personal opinions of the author and should not be taken as the official view of the Margex platform. They are also not financial advice and are only meant to be informative in nature. Thus, they should not be construed as a solicitation to trade. Readers are strongly encouraged to do your own research, conduct due diligence, and assess your financial abilities before doing any investment or trading as these activities carry risks. Should you be in doubt, kindly speak with your personal financial advisor.