In today’s video, we explore the nature of capitulation, and whether we can see signals of this final major flush out in recent date.
The term capitulation is used and abused in this industry (I am guilty myself). However it is also the correct term for many of the events we have seen over the last 6 months, as it reflects a near complete expulsion of anyone who was left to sell. I would argue we have seen four Capitulation events over the course of the 2021-22 cycle, all of which are at a scale of the largest in history:
- June 2021 which started the bear market (-$2.2B)
- LUNA Collapse (-$2.0B)
- June 2022 when we traded below $20k ($-2.5B)
- FTX collapse (-$1.9B)
These moments signify an event which creates an enormous impulse of sellers, most of whom are transacting coins at a monumental loss. It is the final motivation they needed to reach into the wallet, and send every last one of their coins, in immense financial pain, to the exchange, and hitting the big red button.
During this time, the owner is kicking themself and cursing that they should have sold BEFORE this latest sell-off. They have already had this very same thought five times by this point, and this is just the last straw that breaks their resolve.
So after seeing four major capitulation events, plenty of Fed rate hikes, multiple deleveraging events, several ponzi schemes collapsing, and the fraudulent failure of FTX…we may well be approaching the point of shaking everyone out.
To be honest, my assessment and feeling of the market from the $18k-$20k range still stands. I honestly believe that was a textbook Bitcoin bottom, and our current dip could be part of that market structure. I’m not yet convinced we have restarted a downtrend, I feel more as though we are continuing a basing range.
We shall see, but this is what my gut instinct tells me.
Between now and then, please enjoy these absolutely gorgeous Bitcoin art charts.
