Why Bitcoin is Experiencing a Decline: Profit-taking and Quantum Fears Impact BTC

Bitcoin (BTC) saw a drop to $94.1K on December 9th, which analysts attributed to increased profit-taking and worries about security following Google’s recent progress in quantum computing.

 Profit-Taking and Quantum Worries 

QCP Capital, a cryptocurrency trading company, reported that significant options traders took profits as BTC reached $100K and shifted their gains to call options expiring in March 2025, with target prices of $130K-$150K.

“Today, we observed traders securing profits on their long BTC-27DEC24-100k-C positions and possibly moving them to March (130k–150k).”

This move might postpone a significant surge above $100K in the short term, according to QCP Capital. The firm also mentioned that Bitcoin is likely to trade within a range for the rest of December.

The recent enthusiasm for Bitcoin may also be dampened by Google’s quantum breakthrough with its Willow project, seen as a potential threat to Bitcoin’s encryption.

In contrast to classical computers, which cannot break the current cryptographic protection of BTC networks and wallets, quantum computers can potentially breach this security.

Therefore, Google’s milestone raised concerns within the cryptocurrency community, with some individuals expressing worries about BTC’s security. One user remarked,

“As #BTC touches $100k, Google’s CEO reintroduces the Great Bitcoin Short Thesis.”

Nevertheless, some experts played down the immediate impact of quantum computing, noting that it would likely take decades for the technology to threaten Bitcoin’s security.

Moreover, while Willow features 105 qubits, it would require millions to billions of qubits to compromise Bitcoin security.

“Willow consists of 105 qubits. Estimates suggest it would require 13 million to 1.9 billion qubits to affect Bitcoin.”

This situation highlights the importance of developing quantum-resistant strategies for Bitcoin swiftly. Potential solutions, such as implementing a soft fork (upgrade), could help address this concern.

Looking at the technical analysis, Bitcoin experienced a significant price imbalance following a flash crash on December 5th. Typically, prices tend to revisit these imbalances before continuing their previous trajectory.

On December 9th, BTC trader Cryp Nuevo predicted a drop to $94K to rectify the price imbalance (half of the candlestick wick) before any upward movement. His forecast proved accurate shortly after.

Now that the price discrepancy has been resolved, the question remains: will Bitcoin’s price surge again?

Only time will tell. However, current data shows significant liquidity for leveraged shorts between $98K and $104K (highlighted in bright orange). This could prompt increased price action.