logologologologo
  • Home
  • Business
  • Markets
  • Exchange
  • Investment
  • Personal Finance

Bitcoin Prices Are Falling. Why Analysts Say a ‘Massive Capitulation’ Is Coming.

BitcoinBTCUSD –0.85% and other cryptocurrencies were under pressure on Monday. While stock and bond markets were closed for the Labor Day holiday in the U.S., the 24/7 nature of crypto means no respite from volatility for investors.

The price of Bitcoin fell less than 1% over the past 24 hours to $19,700, having climbed above $20,300 on Friday before falling back, in line with a tumble in the stock market. Trading below the key $20,000 level, the largest digital asset is now outside of the $20,000 to $25,000 range in which it has stagnated for much of the summer after a dramatic selloff in mid-June knocked Bitcoin down from $30,000.

“Bitcoin is continuing to show resilience around $20,000 but that’s really being put to the test as risk aversion sweeps through the markets once more,” said Craig Erlam, an analyst at broker Oanda. “A significant break at this point could be really damaging, with the following key level below here being the June lows around $17,500.”

“Considering the outlook for risk appetite in the near term, it’s not looking good.”

That view is shared by other analysts, too.

“Bitcoin’s daily range has narrowed massively, and this is giving us an indication that a massive capitulation is coming,” said Naeem Aslam, an analyst at broker AveTrade. “We believe that this capitulation can be any day now as Bitcoin has been trading in a narrow range for a long period of time.”

Aslam cited two factors as evidence that traders have been fighting sell pressure to keep crypto prices higher.

The first is that Bitcoin has been largely able to avoid the selloff that has hit the stock market in recent weeks, with the Dow Jones Industrial Average and S&P 500 both down almost 3% in the past five sessions. Cryptocurrencies should, in theory, trade as uncorrelated assets, but have shown to be linked to swings in other risk-sensitive assets, particularly stocks. Bitcoin has avoided the outsized downside it has been vulnerable to in the past.

The second factor is a continued rout in the currency market, where most major currencies have lost out drastically to the U.S. dollar. The U.S. dollar index, which measures the greenback against a basket of six peers, has climbed 14% so far this year and was another 0.2% higher Monday. A strengthening dollar has been a significant headwind to Bitcoin prices in the past.

“These two factors indicate that bulls are holding on to their ground very well, and they have not allowed the Bitcoin price to get battered,” said Aslam. “On the flip side, if there is a capitulation to the downside, then the next move isn’t going to be about the $18,000 price level or $15,000; the sell-off could be so intense that it could easily push the prices towards the $12,000 price mark.”

Bitcoin prices have proved tricky to predict in the short term—much to the chagrin of analysts’ and ambitious price targets—and cryptos are known for their volatility. But with inflation remaining high and the Federal Reserve showing few signs of stopping their tightening of financial conditions—which dents demand for risk-sensitive assets—Bitcoin is likely to remain under pressure.

Beyond Bitcoin, EtherETHUSD –3.80% , the second-largest crypto, was up less than 1% as anticipation continued to build around “The Merge,” a hotly-anticipated and long-awaited critical upgrade to the Ethereum blockchain network. But altcoins, or smaller cryptos, were weaker, as Solana lost 1% and CardanoADAUSD –0.39% was 3% lower. Memecoins—initially intended as internet jokes—also fell, with DogecoinDOGEUSD +0.33% dropping 3% and Shiba InuSHIBUSD +1.26% shedding 6%.

 

Related posts

February 1, 2023

Bitcoin closes out best January since 2013


Read more

Categories

  • Business
  • Content
  • Exchange
  • Inflation
  • Investment
  • Markets
  • Personal Finance
  • Technology
  • Uncategorized

Archives

  • February 2023
  • January 2023
  • December 2022
  • November 2022
  • October 2022
  • September 2022
  • August 2022
  • July 2022
  • June 2022
  • May 2022
  • April 2022
  • March 2022
  • February 2022
  • January 2022
  • December 2021
  • November 2021
  • October 2021
  • September 2021

Recent Posts

  • Bitcoin closes out best January since 2013
  • More oil is coming
  • Samsung to keep up chip investment, undeterred by 8-year-low profit
  • TikTok faces a daunting calendar ahead in Washington
  • Think Chevron’s Profit Was Obscene? 5 Companies Will Blow It Away

About Us

The Alpha Cut a Vida Street LLC Company
1404 N. Ronald Reagan Blvd.
Suite 1120
Longwood, FL 32750

Link

(843) 256-4375
https://thealphacut.com

Why Us

Terms & Privacy
Policy & Procedure
Disclaimer

This material is not an offering, recommendation, or a solicitation of an offer to buy or sell the securities mentioned or discussed, and is to be used for informational purposes only.
Any performance results discussed herein represent past performance, not a guarantee of future performance, and are not indicative of any specific investment. Due to the timing of information presented, investment performance may be adjusted after the publication of this report. There can be no assurance that the future performance of any specific investment, investment strategy, or product made reference to directly or indirectly in this communication will be profitable, equal any corresponding indicated historical performance levels or be suitable for your portfolio.
All data in this communication is provided for informational purposes only and is not intended for trading or investing purposes. We expressly disclaim the accuracy, adequacy, or completeness of any data and content provided by financial exchanges, individual issuers, their respective affiliates and business partners and shall not be liable for any errors, omissions or other defects in, delays or interruptions in such data, or for any actions taken in reliance thereon. You agree not to copy, modify, reformat, download, store, reproduce, reprocess, transmit or redistribute any data or information found herein or use any such data or information in a commercial enterprise without obtaining our prior written consent.
We make no express or implied warranties or representations and shall have no liability whatsoever with respect to any data contained herein. The data may not be further redistributed or used to create indices or other financial products. This report and the views expressed herein are subject to change at any time based upon market or other conditions (such as domestic and global economic trends) and are current as of the date of publication hereof. The information, analysis, and opinions expressed herein are for general information only and are not intended to provide specific advice or recommendations for any individual or entity.
We emphasize that Investment in the securities of smaller companies can involve greater risk than is generally associated with investment in larger, more established companies, and can result in significant capital losses that may have a detrimental effect on the value of your investments.
Forecasting represents predictions of market prices and/or volume patterns utilizing varying analytical data. It is not representative of a projection of the stock market, or of any specific investment.
Nothing contained in this material is intended to constitute legal, tax, securities or investment advice, nor an opinion regarding the appropriateness of any investment. The general information contained in this publication should not be acted upon without obtaining specific legal, tax and investment advice from a licensed professional.
Please remember that all investments carry some level of risk, including the potential loss of principal invested. They do not typically grow at an even rate of return and may experience negative growth.As with any structuring of a portfolio of investments, attempting to reduce risk and increase return could, at certain times, unintentionally reduce returns.
The information, analysis and opinions expressed herein are for general, impersonal information only and are not intended to provide specific advice or recommendations for any individual entity.

copyright © Alpha Cut 2021. All Right Reserved
The Alpha Cut a Vida Street LLC Company