The technicals on bitcoin appear to be shifting slightly after a brutal January.

“If you see the trend line over the first month, a 40% correction was baked in,” said one hedge fund analyst.

“We’ll need to see if February provides a dead-cat bounce or a floor for the price,” he added.

From my perspective, how do you determine where there is support on bitcoin?

Unlike other securities like stocks and bonds or even artwork, there are very few  natural buyers. With the price volatility there will be little support from Main Street investors.

Early adopters would be foolish to buy more now. It would raise their cost averaging tremendously deeply cutting into profits.

“We saw funds jumping in in December, I would think most shops were shaken out over the last month, which greased the skids on pricing,” a fund of funds trader told me.

So has the $7,700 price hit earlier on Friday given Wall Street a reason to dip their toe back in. That price would represent a 50% retrenchment from December levels where many funds jumped in.

“The Street is probably the only natural buyer at this point. The question is do they still have the ok to jump in from their trading bosses,” the fund trader added.