Respected Bitcoin Analyst Concludes the Fall Below $4,000 Price is a Sign of Capitulation for BTC
Bitcoin is continuing its decline, reaching below the $4,000 mark. Currently, the coin is trading at approximately $3,729 and some are stating that this is a sign of the cryptocurrency’s capitation.
Bitcoin’s current level is at the lowest its been since September 2017 and many are treating the decline as market uncertainty. A few industry leaders, such as Fundstrat’s Tom Lee and Morgan Creek Digital Asset’s Anthony Pompliano are trying to reassure investors that the fundamentals of the cryptocurrency have not changed and that it still is an asset that can rival gold. However, their words may not be enough to overcome the seemingly widespread pressure to sell the cryptocurrency.
Chris Beauchamp, a chief marketing analyst at IG Trading appeared in a Financial Times article as stating that investors were “much less happy” to continue holding onto their bitcoins at $4,000, especially given that the cryptocurrency has declined from the much more preferable $6,000. He also discussed that Bitcoin short has increased by 20 percent in just one week. As he stated, “They’d rather take the money and run.”
A few traders may also be giving up in light of the recent events, such as a decline from an all-time high of $20,000, the cash fork, and an absence of momentum. According to B2C2 founder Max Boonen, “The way the fork between bitcoin Cash and bitcoin SV was handled did not put the industry in the best light. It will certainly deter many participants from entering the market. [Trading] volumes have been quite high in this move love lower. This might be a sign of capitulation, rather than a mere lack of interest.”
There have also been concerns about regulation, which is largely absent in the industry. There are big questions as to whether the SEC will approve trading-platform Bakkt or another pending bitcoin ETF. If the SEC does approve either one, there are changes that investors will see the improvements that will re-spark their interest in bitcoin again. At this point, investors are simply waiting for bitcoin to rebound and newcomers may be deterred from even giving bitcoin a chance.