Is the Bitcoin price close to bottoming out?
The current bear market is not the first time bitcoin has declined - it's happened before. Here's the chart:
As you can see from the chart, we're just over a year away from the next halvening. What typically happens is that in the run up to a halvening, speculators start to accumulate coins in anticipation.
Once the halvening happens, the amount of coins sold by miners drops, and this supports the price.
One caveat: up until the peak in 2018, there were no derivatives and hence no short-selling. Then the Chicago Futures Exchange approved derivatives, and within a couple of months the bitcoin price started falling.
This time round a lot of hedge funds have been shorting bitcoin. Sam Bankman-Fried' s hedge fund Alameda borrowed coins from Genesis in order to short bitcoin. Given how much bitcoin has fallen this year, they should have made huge profits.
The demise of Alameda and Three Arrows, combined with people pulling coins from the exchanges, means that it should be hard to obtain coins to short the market. So we're nearing the point where this cycle's bottom is reached.