I am a relative small fry who never actually got into Bitcoin on a speculative basis until the $700 range in Nov. I missed the boat. Clearly my capital is going to be a lot more sensitive to the potential for downside volatility. It is the likes of me, whether with a large or small ball of capital to roll around, whose investment Bitcoin needs to attract to really get up to the next level. But at this point in time, I am not convinced.

But you are correct. It is not Johnny Come Lately bears that you have to fear for causing a Bitcoin landslide. It is the Bitcoiner at the exact opposite end of the scale that you need to concern yourself with. I read that only 3% of all Bitcoins are in regular circulation. The rest hoarded. About half of them owned by just 49 early adopter whales. These whales, whoever they are, will know very well that Bitcoin is hyperinflated on the back of limited supply being combined with the surge of interest from China, which is being brought to an abrupt halt. Even at $800, these guys know that Bitcoin is wildly overvalued. It will just take one of the these guys to get nervous or break ranks and make a grab for gold (Bitcoin is not gold, USD is gold) and this market will take exactly the same kind of slaughtering that any hyper ramped penny stock market takes when the early investors/ ramp masters decide to close their position.

At this point in time, I believe that there is a very strong possibility of this sort of scenario playing out and the market would have to convince me emphatically otherwise, in order for me to change my outlook and feel confident in a long position. I imagine that most new wise money to Bitcoin feels the exact same, which is perhaps why a 'final capitulation' needs to happen.