First, the bad news: Bitcoin dumped hard again last night.
Now, the somewhat-good news: Bitcoin recovered most of it this morning on stronger volume than the fall.
A plausible explanation for some of Bitcoin's weakness was presented on Twitter recently by @matt_odell. He correlated these price drops with trustee sales from the Mt Gox liquidation.
First, a quick refresher - Mt Gox, previously known as the "Magic The Gathering Online eXchange" (seriously), was more or less the first major Bitcoin exchange after being converted from an exchange where one could speculate on the future price movements of Magic The Gathering cards. Despite a name that was clearly synonymous with security and a long history of legitimate operations, Mt Gox succumbed to a number of factors, including hacking and poor security operations/commingling of client funds/hot-wallet storage that ultimately led to most users losing most of their deposits.
Well, the liquidation of what Mt Gox assets could be recovered has been ongoing as each new batch of Bitcoin recovered from the exchange has been released to the trustee. Note the timing of the releases (not sales) highlighted in the following chart:
If this is the explanation for some of the recent price weakness, it can only last so long as the market continues to gobble up these "discounted" Bitcoin.
One other quick piece of data that may be bullish comes from... the mainstream.
Per a video from CNBC (once again...seriously) it may "now be time to buy Bitcoin" based on the "Bitcoin Misery Index".
The "Bitcoin Misery Index", not to be confused with the Body Mass Index, is a rating of "how miserably Bitcoin holders are at the current price" from 0 to 100, with 0 being "most miserable/best time to buy."
Here's a charted history of how effective this indicator has been in the past:
According to CNBC, this indicator has not been this bullish since September of 2011! It's far from a guarantee, but perhaps as we put first quarter 2018 into the books, we can hope it will be the worst of the year.
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Sources: Google, Twitter @matt_odell, @Daudimitch, CNBC, Zero Hedge
Copyright: Bitfinex, Cryptowatch, CNBC, TransformingTruth.org, Bitcoin.com