Bitcoin Price Update: BTC May Have Found Cycle Low Near $80,000

Bitcoin Struggles to Hold $80,000 as Analyst Suggests Cycle Bottom May Be In

Bitcoin is finding it difficult to maintain its footing in the low $80,000s. However, macro investor Lyn Alden believes the cryptocurrency may have already weathered the worst of its current cycle. Speaking on the Milk Road podcast, Alden stated her “base case” is that Bitcoin’s bottom for this cycle “is in,” while emphasizing that such outlooks are based on probabilities rather than absolute certainty. Alden is the founder of Lyn Alden Investment Strategy.

Why the Bitcoin Bottom May Be In

Alden’s argument hinges on the typical trajectory of bear markets, which tend to conclude when all potential sellers have exited the market. In her view, “most of the familiar structural risks are already reflected in the price.” She added that “money that would sell for almost any reason has likely already left.”

Not Yet a Bull Market

Despite the potential for a cycle bottom, Alden cautioned that this does not signal an immediate rally for Bitcoin. While selling pressure may have eased, the market still requires a new catalyst to re-engage buyers, and Alden anticipates prices will remain volatile for some time.

“I’m not necessarily arguing that we’re in a bull market,” Alden said. Nevertheless, she described Bitcoin’s risk-reward profile as “really attractive” at current levels for investors with a multi-year horizon.

AI Hacking: Crypto’s New Tail Risk

A significant risk that Alden believes is not yet priced into the market is technical in nature. While a year ago the primary concern was quantum computing’s potential to break Bitcoin’s cryptography, the focus has now shifted to the possibility of artificial intelligence being used to compromise the mathematical underpinnings of digital assets, without the need for quantum computers.

Such an attack, if it severely impacted the Bitcoin network, could compel even dedicated holders to sell. Alden characterized this as a “catastrophic tail risk” that is difficult to quantify due to the complexity of the cryptography involved.

Why Complex Crypto Projects Face More Danger

Alden posits that AI-driven attacks represent the most substantial threat to the most intricate crypto projects, citing three key reasons:

This dynamic is particularly relevant for decentralized finance (DeFi) users seeking yield. Alden suggests that any return must be assessed against the annual probability of a hack that could result in partial or total loss of deposited funds, and she believes many of these yields do not adequately compensate for the inherent risk.

Alden remains cautious about the majority of the crypto market beyond Bitcoin, stablecoins, and certain tokenized assets. She noted that Bitcoin’s comparatively simpler design offers greater resilience, although no system is entirely without risk.

What It Means For Bitcoin Investors

The current outlook presents a dual perspective. On one hand, selling pressure appears to be nearing exhaustion, suggesting the cycle bottom may have been reached. On the other hand, a catalyst is still needed for the next upward movement, and a novel technological risk has emerged that markets may not have fully grasped.