Bitcoin and crypto teeters upon capitulation… is it an opportunity?
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The crypto market is right now bloodier than a UFC loser lying in the elevator hallway of The Shining, but is this price action the “generational opportunity” of a lifetime? Various crypto analysts are suggesting… yes.
Before digging into their reasoning, we’d just like to caveat… there is a huge amount of risk the crypto market heads deeper into phone-smashing territory from here. Got dry powder? Nice. But firing all those cannons at once mightn’t be the best course… of course.
Has crypto actually capitulated today? More than a billion USD was lost from the entire market in an hour, earlier, with Bitcoin since tumbling below US$23k (-18%) and Ethereum sliding under US$1,200 (-21%), so it’s definitely in Rout City.
Perhaps the market is actually on the brink of the sort of cliff dive that’d make Peter Schiff foam at the mouth with “I told you so” excitement.
It could well be in for more carnage yet, especially considering the major ongoing macro issues (inflation/rate hikes/recession) still dragging down most markets, not to mention the potential Terra LUNA-like black swan event that is crypto-lending platform Celsius.
— Blockworks (@Blockworks_) June 13, 2022
The US Federal Reserve, for instance, meets later this week to outline its next rate-hike move – in response to the higher-than-expected US 8.6% inflation figures released last week. The “priced in” argument on these events have started to look pretty weak with each resulting downturn/bloodbath.
One thing’s for sure, though, trying to time the exact bottom is pretty much a wild goose chase. Dollar-cost averaging and layering in slowly over time is certainly one way to spread out your bets (if you view things that way) and potentially lessen the risk.
Once-in-a-lifetime opportunities happen over and over again.
Whatever you think you missed, you didn't.
Position yourself to catch the wave once it arrives!
— ArcaneBear.eth🔺 (@arcanebear) June 13, 2022
PlanB is a well-known pseudonymous Bitcoin analyst, famed for his Bitcoin Stock to Flow (S2F) model. And that’s a model that suggests BTC’s future price can be roughly estimated with significant increases every four years, in line with the Bitcoin “halving” events that reduce BTC supply by 50 per cent.
The S2F model has come under fire this year for its apparent deviation from its extremely bullish path. That said, it is something PlanB keeps reasonably fluid, having adjusted it accordingly to changing conditions in the past. It’s also not the only way he charts…
Some people think that I only look at S2F all day. But in fact I use many indicators & models for investing & trading:
1. fundamental (S2F, mining cost etc)
2. technical (RSI, MA etc)
3. on-chain (Realized cap, coins in loss etc)
4. derivatives markets (futures/base, options/vol) pic.twitter.com/nLktG9r5A9
— PlanB (@100trillionUSD) June 12, 2022
“Forget about tops and bottoms, focus on strategy” the analyst tweeted today, while also pointing to Bitcoin’s monthly RSI (relative strength index) now hitting the lowest level it’s ever reached.
Reason why you are not buying at this generational opportunity level is the same why you did not sell at 60K: greed & fear. Greed because you think that you can time the absolute bottom. Fear because you think it can drop further. Forget about tops and bottoms, focus on strategy. pic.twitter.com/Ei8US8GnGj
— PlanB (@100trillionUSD) June 13, 2022
The RSI momentum indicator reaching these kind of levels (see the blue dots on PlanB’s chart below) has usually preceded significantly large swings back to the upside – in other words, bull runs. Keeping in mind, though, moving on from the lower territory has been known to take several months.
Worst bitcoin monthly RSI ever: 43.7
Bottom Jan 2019, BTC $3400: RSI 43.9
Bottom Jan 2015, BTC $210: RSI 44.6
And some blue: we are 60% below monthly ATH pic.twitter.com/ZlsEmV06b9
— PlanB (@100trillionUSD) June 13, 2022
On the other hand… “some are waiting for dark blue,” added PlanB. “But it’s possible that we will not have dark blue this time. Dark blue = 70% below monthly ATH = 0.3*61K = 18K. Problem: 18K is below 200WMA (22K), that never happened before…”
So for all the doom and gloom on Crypto Twitter today, we’re seeing plenty of crypto analysts and influencers licking their lips, dealing pop psychology such as: “bear markets are where millionaires are made”.
“Filbfilb”, the co-founder of trading suite Decentrader, yesterday described Bitcoin’s price action as the “opportunity of a lifetime.” And that was even before today’s crypto beating turned seriously ugly.
“Just to be clear, despite short/medium term issues which unfortunately are across the board, if you can survive and play your moves right without blowing up or risking too much so you have no capital, this is IMO the opportunity of a lifetime,” he suggested in a long Twitter thread.
Like PlanB, meanwhile, analyst Rekt Capital is pointing to the RSI as well as Bitcoin’s 200-week moving average trendline, “where previous bear market bottoms occurred”.
#BTC is approaching the 200-week MA where previous Bear Market Bottoms occurred
Also, $BTC is approaching RSI values last seen in previous Bear Market Bottoms
— Rekt Capital (@rektcapital) June 13, 2022
That level is sitting just above US$22k. Bitcoin’s price at the time of writing is US$23.4k. “Confluence is slowly building”, said Rekt… He might have to change that to “quickly”, though, if we have another day or two like the past 24 hours.
Cryptoquant.com analyst Venturefounder certainly seems to think we will…
“[The] Bitcoin cycle end capitulation is perhaps happening now,” he posited, while speculating that the biggest hit could still come within the next few weeks.
#Bitcoin cycle end capitulation is perhaps happening now.
— venturefoundΞr (@venturefounder) June 13, 2022
#Bitcoin is in a great place to buy
If you still have money for that
— That Martini Guy ₿ (@MartiniGuyYT) June 13, 2022