The Perfect Capitulation Cocktail
We're looking for the ingredients that make the perfect bear market capitulation cocktail, and the prices where we expect the conditions to be just right for the ultimate low to form.
G’day Folks,
Suffice to say, my inbox, DMs, and phone are running off the hook this week, as folks desperately try to work out why Bitcoin is selling off again.
The Bitcoin price has now broken the $80k low set in November, is below the True Market Mean ($81k), and has taken out the average ETF inflow cost basis ($82.6k).
If you listen closely enough, you can even hear the keyboards of journalists out there furiously asking ChatGPT to do their job, and write a catchy headline article for why Strategy’s 713k Bitcoin treasury is on the verge of liquidation (hint: it isn’t).
As Checkonchain readers know, this move lower is very much the expected move after a bleedingly obvious bear flag…breaks bearish, and enters the supply air-pocket below $80k.
What break downs like this tend to do, is they instill a new wave of uncertainty into the minds of investors.
This causes them to doubt their conviction, and it often manifests as panic selling into the fear. Then their confirmation bias kicks into overdrive, and they go hunting for every doom-merchant commentator they can find to justify why Bitcoin really is heading to zero, supporting their decision.
Don’t worry, they will buy back lower…I’m sure they will…
Today’s post is an analysis of two market dynamics:
The signals this price breakdown is sending about investor confidence and conviction today.
The price levels where I expect that sentiment to be completely shattered, resulting in the capitulation event that will eventually slay the bear.
As the crowd prepares to panic sell into every move lower, I’m preparing myself for the point of maximum opportunity, which will inevitably present itself…
…but only if you’re patient, and paying attention when it does.
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