Technical Analysis

Time to buy Crypto after capitulation?

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rewrote two-year lows on Thursday morning near $15,550, losing more than 27%
from Saturday’s local highs. CoinMarketCap estimates the total capitalisation
of the crypto market to be at 839bn, down 6.7% from levels 24 hours ago and 21%
below Saturday’s peaks.

Ethereum is
now a third cheaper than levels at the end of last week, and its sell-off
started noticeably from the 200-day moving average, which had previously acted
as resistance in April. Near the $1070 mark, there is a noticeable
strengthening of buying, as in July.

The crypto
market is now in a panic liquidation phase, occurring amid a raid on
cryptocurrencies, which can be compared to the bank run in the
early 20th century. The fundamental
difference is that banking was already an established business back then,
although regulation was in its infancy. The current crisis may be the catalyst
for crypto regulation.

If we look
at the situation from a market speculator’s perspective, we are in the process
of capitulation. Such moments often precede long-term reversals. But it is
worth realising that despite Bitcoin’s 5% rebound from the start of the day and
the double-digit rise in yesterday’s casualties, the sell-off may not yet be

In our view,
the crypto market is now in the same phase where it was in late 2018 when the
bulk of the decline was behind it, but the best speculative buying moment was
still a year away.


prolonged, almost 5-month sideways slide has relaxed market participants. The
sharp fall in crypto assets took traders by surprise. Investors have been
forced to sell off cryptocurrencies to cover losses on loans secured against
them due to margin calls. The FTX exchange itself, along with Alameda, may also
have been selling off assets.

The most
significant drop in the top-100 crypto was Solana, which collapsed by 49%, as
one of the largest holders of SOL was Alameda Research, the investment company
of FTX exchange head Sam Bankman-Fried.

Digital CEO Fred Thiel said his mining firm was the second-largest public
company in the world (11,300 BTC) in terms of bitcoins stored, thanks to its
retention of mined BTC. MicroStrategy remains the leader, with around 130,000
BTC stored in its wallets.

According to
a survey by Nickel Digital Asset Management, 92% of professional investors are
optimistic about the outlook for the cryptocurrency market, despite its

This article was written by FxPro’s Senior Market Analyst Alex

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