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Bitcoin trending at its lowest level since December 2020. All volatile speculative assets rise and fall dramatically, unlike stable fiat currencies and anyone in the cryptocurrency space know it well. This also means that Bitcoin has given up on its gains from 2021. It is at a 11-month low now. This looks like the time of the blood bath.
Those who have a difficult time accepting change will find the crash blood bath volatility hard to take; however, this is the reality of the market. Those who have accepted the volatility factor and the wild swings in the cryptocurrency space, keep their game simple. They buy when the market dips. Those who are used to the volatility game know that the high and low is the way the game goes in the bitcoin space.
Dan Held: “Bitcoin $26K starting to smell like capitulation.”
For clarity, Capitulation is a point where investors tend to surrender or give up. This is a point in time when investors decide to give up in the process of trying to recapture lost gains eventually leading to loss as the asset price falls down.
For instance, the price of Bitcoin decreasing by more than 10% is a sign of capitulation. Going down by 10% need not be a sign of capitulation, but because came down from its 2017 top it just looks like. Not all are capable of holding through highs and lows. Some are in for the short term to juggle a good profit.
“I can’t wait to see all those who claim BTC being a hedge against inflation try to buy groceries with the little money they have left since they pour it all into BTC, which you can’t pay with except in El Salvador.”
There are too many things making economy difficult like wars, production issues, post covid, and the entire stock market is down. Some of the investors are beginning to wonder if they are caught in a pyramid scheme.
Believers are like: People are finding out that most coins cannot be trusted. Therefore, move everything to Bitcoin and don’t touch for a year and everything will be fine.
The current situation is led by interest rate Vs. Risk appetite.
Panic sellers who are not able to take the volatility have worse fears and they are selling at a loss, thus losing the little they have made.
For those wondering why would this cycle be different when all previous cycles saw a minimum of 80% correction, the reality is that BTC has gone through much worse than this. The technology remains good, and fundamentals are still strong.
