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A new year hasn’t marked a turn in the price of Bitcoin (CRYPTO:BTC) and other cryptocurrencies. While there’s plenty to be concerned about as Bitcoin prices take a few steps lower following the bloodbath witnessed in the precious metal markets (gold and silver imploded last Friday in a vicious fashion), I do think that the case for “digital gold” might not strength by all too much, even if the gold markets crank up the volatility by several notches. Undoubtedly, gold is supposed to be one of those safe-haven assets, but given the magnitude of the ascent, a 10% single-day drop shouldn’t be all too surprising. Easy gains, easy losses.
While the implosion in gold prices might draw some back to the crypto trade, there’s a good chance that the crypto markets might start following gold and silver lower, perhaps much lower. Thus far, the fall of gold and silver has not meant gains for Bitcoin. And given the heightened anxieties about equities and the possibility of an AI bubble burst, Bitcoin and its like may also be at risk of further downside from current levels.
Digital gold is fading just like real gold is, but for how long?
Bitcoin is a risk-on play in an environment where even the supposed safe haven “risk-off” play, like gold, is starting to come in. Add the gigantic question market of quantum computing and the impact on cryptography into the equation, and I’m in no rush to be a buyer of Bitcoin or any crypto-related equities at this juncture.
Personally, it’s less about the terrifying technical picture and more to do with uncertainties relating to potential disruptions from the advancement of quantum computing. Of course, quantum might not mean that it’s curtains for the crypto trade at some point in the future. However, there is a lot of uncertainty here, and not everybody is going to have the answers.
Either way, I think it’s only prudent to be ready for anything, especially as the quantum innovators wind up a bit ahead of the quantum timeline. Could Bitcoin be quantum vulnerable in the coming years? As always, time will tell. Things may or may not be overblown, especially given how the wild world of cryptocurrency can evolve with the times.
Crypto winter could be chilly and last quite a while longer
With Bitcoin starting 2026 in the red, down by more than 14%, questions linger as to how bad “crypto winter” could be. Though the asset has recovered from past bear markets, this one certainly does feel different. Whether that’s related to quantum or just the market’s preference for lower-risk profiles, I’m not so sure the turnaround will be all too swift. As such, the crypto bulls should ensure they’re ready to average down and wait things out over what could be a number of choppy years of trading.
As Mad Money host Jim Cramer put it, the year of “magical investing” certainly does seem to be over. And with that, Bitcoin might struggle to find its footing as investors turn against crypto and other alternative assets look to give back more of the ground they gained last year. Perhaps the thing that scares me most about Bitcoin at around $78,000 is the potential head-and-shoulders top pattern that might be in the works.
Of course, it might not be a textbook technical pattern, but if one ends up coming to fruition, Bitcoin might have further room to go to the downside. Either way, I’d be more willing to step in as a bull should Bitcoin fall towards the $60,000 range over the coming weeks and months, a fairly strong level of support that might just hold up.
In the meantime, it’s worth watching the asset closely, especially as digital gold looks to make its move in response to a continuation of the nasty sell-off in real gold. The big question is whether Bitcoin will follow gold lower or have what it takes to bottom out and power higher as precious metals enter a bear market.