After Brief Rally Attempt, BTC Price Falls Again – Capitulation?

BTCUSD Chart Header 2018-12-03

Yesterday and the day before, the price of BTC (and a basket of major cryptocurrencies) mounted what looked like a rally attempt. Indeed, at one point it looked like BTC would continue its march to the $4.5k level, but today, all that went up in smoke yet again.

Currently trading at $3.9k, the price of the biggest crypto may be positioning for capitulation…What happens now? Is the bottom in or out? Is something like $1.8k in the books?

Indeed, if we are looking for that illusive “capitulation” to come by, we need to consider the possibility that it may have happened already.

November’s cryptocurrency crash came about against the background of solid trading volumes, there is no way around that.

BTCUSD Chart 2018-12-03

To put the meltdown into perspective, let us take a closer look at some numbers. At the beginning of the month, BTC traded above $6.3k. Now, it is just below $4k, having realized losses in excess of 36%. During this time-frame – which saw the biggest monthly loss for BTC this year – trading volumes went up by some 33%, to reach a level not seen since May. It is doubtless: the breakout from ~$6.4k did indeed happen and it happened downwards.

It is also quite obvious that the bounce that had started the day before yesterday (and continued yesterday) was probably nothing more than some bargain-hunting by long-term bulls, rather than the beginnings of a possible sustained rally. That said, there were some indications that this may indeed be an actual rally. The 14-RSI showed massively oversold conditions – for what it’s worth…

The daily chart may still indicate a bullish setup, however, the way the price is currently shaping up may soon invalidate that.

What are we talking about?

Against the backdrop of BTC exhibiting signs of capitulation, the chances of a rally have pretty much been dashed by the drop below the $4.120 neckline support. To get anything going in this regard again, a move above $4,250 – the resistance level defined by the falling trend line – would be required. If it did happen, the next target would be the 4-hour chart resistance at $4,761.

Looking southward, the target is the support level at $3,771, defined by Wednesday’s low. A drop below that mark would yield further retreat, towards $3,474 – which is the yearly low set a few days ago. Below that? Oblivion awaits…

Interestingly, the fundamentals have been shaping up pretty well lately.

The State of Ohio has begun accepting BTC for taxes – a development, the significance of which should absolutely not be underestimated. Intel have secured a patent for BTC mining which is supposed to make the process a lot more energy-efficient.

In the meantime, Canaan Creative, a BTC mining company, decided to put a personalized spin on the celebration of BTC’s price bottom (which we aren’t 100% certain has even arrived yet), by slashing the prices on all its mining devices.

As a result of this move, the Avalon 921 and the Avalon 851 have both become available for $200.

The sale is obviously aimed at crypto miners, who have been taking the brunt of the damage caused by the recent meltdown. According to F2Pool, the current prices have made mining unprofitable for so many, that an estimated 600,000-800,000 miners have gone offline. Loss of hash-power is indeed the last thing the beleaguered crypto industry needs.

It is safe to assume though that most of the miners that went offline are older, less efficient ones.

In still other news: Fidelity are looking to expand their offering of digital asset trading services, to include  the top 5 crypto assets by capitalization.

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