Colas, the first analyst to follow bitcoin, said on CNBC's "Fast Money" that Google search patterns can forecast bitcoin's future. He said he uses Google Trends to track how many people enter "bitcoin" into the search engine. The analyst said the cryptocurrency's price tracked along its popularity.
"Going into December [searches] skyrocketed," said Colas, who said the total number of bitcoin Google searches worldwide tripled that month. "You saw that correlate to the total increased number of wallet growth," which doubled in December from approximately 5 percent to 10 percent as bitcoin rallied.
But in January, the search volume fell 75 percent as wallet growth fell to pre-December levels.
"It's very much a case where you have to hold interest in new bitcoin owners to get bitcoin to go [back] up," Colas said Tuesday.
"Right now [the Google search data] is telling me there's not really that next leg up in bitcoin because there's not that interest that leads to wallet growth that leads to price appreciation," Colas said.
Retail investors have favored bitcoin's volatility and opportunity to win big, but interest is fading as other cryptocurrencies gain traction.
"Bitcoin is the gateway drug to all cryptos and it has acted exactly that way," Colas said.
"Some of the movement in ethereum, which has traded much better [in January], is just money getting pulled out of bitcoin," he said.
Colas said that investors can reliably track price movements in individual cryptocurrencies by monitoring search traffic. He said that search interest in individual digital currencies correlates with the market values of those cryptocurrencies.
Bitcoin, which has a market cap of $170 billion, fell Tuesday amid a broader sell-off in the market. The cryptocurrency dropped below $10,000 as other digital currencies saw similar pullbacks.