Google Searches for Bitcoin Plummet to Nine-Month Lows
Interest in bitcoin has waned through the first six months of the year and has now reached its lowest level since September, according to the latest Google search trends.
Bitcoin Searches Way Down This Year
An evaluation of Google search trends reveals a sharp decline in interest for bitcoin and the broader cryptocurrency market. Bitcoin’s trend score, which is a snapshot of how many times the term has been inputted into Google search engines, has fallen to 8 for the week of June 3-9. That’s down from a peak of 100 in December.
On the scale of 1-100, higher scores represent greater interest in a particular search term.
So far this year, Google searches for the word “bitcoin” have declined by 86%.
The search term “cryptocurrency” has followed a similar trajectory, having reached a low of 11 this past week. That’s the lowest reading since early October. Like bitcoin, the cryptocurrency search term peaked at 100 in early January.
The Impact of First-Time Buyers
Bitcoin’s bull market was largely predicated on the arrival of new traders buying cryptocurrency for the first time. The retail investment boom peaked in January as the cryptocurrency market cap approached $840 billion. Since then, it has fallen by more than half.
Bitcoin peaked a little bit earlier than the broader market. Analysts at the San Francisco Federal Reserve believe that the currency’s peak and subsequent decline are associated with the launch of bitcoin futures contracts, which made short-selling more viable.
Without new first-time buyers entering the market, bitcoin could face a prolonged lull period characterized by sideways movement and false breakout patterns. That’s the general outlook provided by Nick Colas, a Wall Street cryptocurrency analyst with DataTrek Research. In Colas’ view, investors should prepare to “HODL” for at least three-to-five years as interest in cryptocurrency slowly re-emerges.
Predicting bitcoin’s future price trajectory is notoriously difficult but there are strong signs that bearish cycles are weakening. The last few major reversals have been accompanied by higher lows. Trade volumes have also declined incrementally over the last three bearish cycles, a sign that fewer traders were contributing to the decline.
The bitcoin bulls remain firm in their conviction that prices will breakout again this year. Fundstrat’s Tom Lee maintains the view that bitcoin will reach a high of $25,00 by the end of the year. Technologist John McAfee is calling for prices to effectively double by the end of this month.
The value of bitcoin reached a high of $7,672.75 on Wednesday, having recovered 4% over the past five days. Bitcoin’s share of the total cryptocurrency market currently stands at around 37.8%, down sharply from its April peak of around 45%. At the start of the bull market in early 2017, bitcoin accounted for more than 90% of total capitalization.
Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.
Featured image courtesy of Shutterstock.