Bitcoin Capitulation - Did it happen? Monthly BTC Analysis
Above is a monthly chart comparing 2014 to 2018. You'll see so far, everything is normal in regards to Bitcoin price action. No one can declare Bitcoin dead yet as we can clearly see we're in the 'Bust' part of the Boom and Bust cycle of Bitcoin.
While we do not know for sure if capitulation happened in 2018, we can clearly see where it happened in 2014. In 2014, in ONE month, Bitcoin lost 48% of it's value. Now as you can see, in November 2018, Bitcoin lost 44% of it's value.
While many can claim that this "isn't enough pain yet" and there is still more "blood to run in the streets", you can clearly see in 2014 that a 48% drop was enough.
So the question becomes, can a 44% drop mark capitulation? I believe in my assessment, that the answer is yes, however, I would not enter the market until we see a successful retest of a low OR for the more aggressive trader, buy next month if we happen to go as low as we went this month and set a close stop loss in the event Bitcoin makes a new low. If the sellers fail to make a lower low next month, then the chances of Bitcoin up from there after some sideways price action are fairly high.
The two fundamental items that worry me about Bitcoin in interim is the Mt. Gox settlement where 160,000 Bitcoins will be distributed to Mt. Gox victims by March 2019. Also, I believe if the global economy is not doing well, then high risk assets like crypto currency will become even less attractive.
Either way, it's better to wait for confirmation before entering a trade instead of trying to guess the bottom. There is plenty of room to go up from here once there is confirmation that Bitcoin is unable to make a new monthly low. For me personally, I'll be waiting for the 30 month VWMA to become support again.
While we do not know for sure if capitulation happened in 2018, we can clearly see where it happened in 2014. In 2014, in ONE month, Bitcoin lost 48% of it's value. Now as you can see, in November 2018, Bitcoin lost 44% of it's value.
While many can claim that this "isn't enough pain yet" and there is still more "blood to run in the streets", you can clearly see in 2014 that a 48% drop was enough.
So the question becomes, can a 44% drop mark capitulation? I believe in my assessment, that the answer is yes, however, I would not enter the market until we see a successful retest of a low OR for the more aggressive trader, buy next month if we happen to go as low as we went this month and set a close stop loss in the event Bitcoin makes a new low. If the sellers fail to make a lower low next month, then the chances of Bitcoin up from there after some sideways price action are fairly high.
The two fundamental items that worry me about Bitcoin in interim is the Mt. Gox settlement where 160,000 Bitcoins will be distributed to Mt. Gox victims by March 2019. Also, I believe if the global economy is not doing well, then high risk assets like crypto currency will become even less attractive.
Either way, it's better to wait for confirmation before entering a trade instead of trying to guess the bottom. There is plenty of room to go up from here once there is confirmation that Bitcoin is unable to make a new monthly low. For me personally, I'll be waiting for the 30 month VWMA to become support again.
My goal is to find the best risk:reward setups. For instance, if you risk $1,000 at a chance to make $5,000, you can afford to be wrong 4 out of 5 times and still not lose money. I hit my targets over 50% of the time.
Quote from above where I called for the $3,150 entry:
"I would not enter the market until we see a successful retest of a low OR for the more aggressive trader, buy next month (January) if we happen to go as low as we went this month (December) and set a close stop loss in the event Bitcoin makes a new low."