Capitulation Before Rally?
Although some are sure that Bitcoin revisting its lows is out of the question, there are some that are sure this is a possibility. Just recently, George
McDonaugh told Bloomberg that cryptocurrencies en-masse are “due another retest of the lows (which he claims is at $3,100).” McDonaugh chalked up his call to the fact that markets often retests “the depths of despair” twice, and so far, capitulation has arguably only occurred once during the $6,000 to $3,200 move. And with that, he remarked that Bitcoin could easily fall to that level again.
Murad Mahmudov, a partner at Adaptive Capital, has also tussled with this theory multiple times. Mahmudov, a leading thinker in this space, explained on Twitter that the drop from $6,000 to $3,000 was just “Baby Capitulation.” If BTC follows the path it did in 2015, there will be a “Final Capitulation” event, which he claims will bring the cryptocurrency down to the $1,800 to $2,200 range. He adds that $1,700 to $3,000 will be a solid zone of accumulation for long-term investors.
In another tweet, he doubled-down, writing that while Bitcoin’s “steady support” will be found at an MA300 of around ~$2,400, it could “wick down” to as low as MA350~400 in the $1,700 range, “due to past patterns and how particularly overstretched the 2017 bubble was.”
Parabolic Crypto Rally Could Be on The Horizon
Bitcoin’s recent move under $4,000 likely disconcerted some optimistic traders, but from a long-term perspective, some argue that the crypto market’s prospects are looking brighter and brighter each and every day. According to Crypto Thies, a well-known analyst and the creator of the Market God indicator (a proprietary measure meant to signals trends), cryptocurrencies could soon see a recovery.
On Twitter, Thies posted a chart of the entire crypto market that dates back to 2013. The chart, which was barebones except for his “Market God (v6) indicator, didn’t look like anything special. But, it showed that the aforementioned indicator had issued a “buy” for the first time in mid-2015, when Bitcoin embarked on a recovery to head into 2017’s parabolic run-up, which saw BTC breach $20,000. What makes this significant is the fact that Market God issued a “sell” near the top of early-2018’s altcoin bubble, signifying that the indicator does have some street cred, so to speak.
Thus, Thies, who wrote “goosebumps” in the tweet introducing this chart, is likely calling for another jaw-dropping rally in the near future.
Interestingly, this comes after the three-week iteration of this signal has issued a buy for the first time since October 2016, when BTC was at a mere $500 and readying up to embark on a paradigm-shifting uptrend to $20,000.
But it isn’t that simple. Last time Market God issued a buy signal on the two-week chart, the aggregate value of cryptocurrencies wicked to yearly lows before heading higher. So, if Market God’s pseudo-calls have some credence and history rhymes, Bitcoin could very well revisit (or even break under) its December low one more time.