I think that yes, it's in a short term overpriced situation. I think it's possible, even likely, that there needs to be some period of sitting in a trading range and consolidating (strangely, I run across this guy saying the same thing). People need to settle down a little get some of the fever out of the market. I think a drop in price of as much as 50% is not out of the question. However, I also think it has a good future; that there's a real place for cryptocurrencies and they will make a comeback.We all know that Bitcoin crashed after that. In fact, according to Coinbase, Bitcoin was already in the process of crashing on Jan. 10; it reached its peak on December 16th, at $19,343. They show the price bottoming out on February 5th at $6914, which is well under 50% of the peak (35.7% of the peak). Today, it's trading in the range of $10,000, which is on the order of 51.7% of the December peak, so still off about 50%.
Is the bloodletting over? This is harder to say, but playing technical analyst a bit, here's the last month of closing prices with a trading range I've drawn in.
dead cat bounce" and the price will drop some more, or if that bottom line is close to a "support line" that the price doesn't go below and it continues back up. It's entirely possible it stays in a trading range around $10,000 for a longer time (six months?) before going up or down.
Remember my definition of technical analysis: drawing lines on a chart of prices and then thinking those lines mean something.
Bitcoin remains an interesting puzzle. Right now, it seems disconnected from its real intent, but I still think cryptocurrencies do have their place in the long term, big picture. I firmly believe that there will never again be the equivalent of the increase in price from the legendary first pizza order (10,000 coins for 2 pizzas - now $100 Million), but that an increase from the price paid today is entirely possible. Now much? I have nothing to base that on but gut feel, which I'm clearly no good at (if I was good, I would have bought bit coins when they were a few bucks). If you're looking for the next big shot at making thousands of percent gains, look somewhere else, but gains more like other investments are still possible.