Crypto capitulation accelerates – is bitcoin headed for $2,000?

Where’s the bottom they cry as capitulation rules the day. Bitcoin is down 15% at $4,510, with crypto market cap plunging to $146 billion, equating to a loss of $25 billion in 24 hours.

Everywhere prices are collapsing, even XRP which has lately been the strong outlier. Trading volumes in bitcoin are strong at $7 billion. Before this week those are trading volumes only last seen on 15 October and 24 July.

Nouriel Robini aka Dr Doom is of course predicting the bottom is at zero but a sub $3,000 level is certainly in play with the last meaningful support at $3,600 perhaps the next major test.

Bitcoin Cash warfare, SEC enforcing security tokens on ICOs with rebates for investors, the FAANG implosion forcing liquidation of satellite assets in portfolios and stop losses being taken out in a rolling cascade have all combined in a perfect storm.

Market participants (there are still some not in tether!), will take some succour from the thought that wherever this descent ends it will surely be a signal for buyers.

Clem Chambers, chief executive at global investor portal network ADVFN, has for a few months now been saying accumulate under $5,000 and fill up under $2,000. That, even from here, is a highly bearish prognosis of more pain ahead. The shorters at BitMex will be happy traders.

Nigel Green, from asset manager deVere Group and a long-time bull on the sector, said: “Just a few weeks ago crypto traders were airing concerns about the lack of volatility in the crypto market.

“Now volatility is back and many savvy investors will be using this as a major buying opportunity, perhaps the last one of 2018.

“Savvy investors understand that digital currencies are the future of money and, as such, they will be capitalising on the lower prices in order to build their portfolios and shore-up their positions.”

With momentum accelerating to the downside, bitcoin at $2,000 is realistic. After all bitcoin was trading at $963 on 1 January 2017.

Mati Greenspan, analyst at eToro, the global, multi-asset investment platform, took an upbeat view: “The bear in crypto markets is showing persistence. What we’re seeing now are the after-effects of the unprecedented rise of Bitcoin and other cryptoassets seen in 2017. This year is simply a retracement of that.

“The same is happening in broader markets as well where tech stocks, for example, are following a similar pattern. As with all markets, if prices reach levels that are higher than can be justified they need to pull back. These cycles can sometimes be accentuated in the crypto market due to the riskier nature of this nascent industry.

“In the same way previous cycles have not signalled the end for broader markets, these price movements don’t signal the end for cryptoassets. We’re still very much at the beginning of the crypto journey. At this stage, volatility is to be expected.”

Bitcoin Cash has dropped to $220 with SV at $54, both down 38%, according to coinmarketcap.

 

OKEx accused of manipulation

Elsewhere this morning OKEx is batting back claims that it manipulated the market by closing its Bitcoin Cash futures market early.

A poster called AMBER AI on Medium says shorters lost $24 million as a result of the exchange’s actions.

 

BTCUSD 1-week chart (purple line shows sub $1,000 price at 2 January 2017), Coinbase


 

 

 

 

 

About the Author

Jennifer Collins
Jennifer has been writing about crypto since 2016 when she first got interested as a student at Queen Mary University in London. You can email me here: jennifercollins@coinintelnews.com

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