Investigation into current market situation: Should you sell? Is this the capitulation?

Investigation Into Current Market Situation: Should You Sell?

Panic selling

Cryptocurrency struggled this week with Bitcoin losing around -18% while majority of the altcoins lost over -20% with some of them losing even over -30%. Remember that this is on top of the loss from previous week so overall price decrease was even higher.

There are two main reasons that could be reason for this decrease:
Bitcoin Cash fork (BCH ABC vs BCH SV) that caused some people to lose more faith in cryptocurrency
Bakkt being delayed (until January)

Those connected together with the bearish sentiment caused people to panic selling because they were believing they will lose everything.

Oversold? To where?

The selling pressure caused the price to tank significantly and the price went under 4400 which is the lowest price Bitcoin had this year.

This is the same case for several altcoins - Ethereum for example suffered even worse

Stable coins on the other hand has gained a lot of ground with more coins being introduced into the circulation. The volume and mcap for stablecoins has been one of the highest ever which means most people actually aren't selling to fiat but to stablecoins instead:
Tether (USDT), 8th, 3.4B volume
TrueUSD (TUSD), 31st, 33M volume
USD Coin (USDC), 33rd, 13M volume
Paxos Standard Token (PAX), 40th, 36M volume
Gemini Dollar (GUSD), 117th, 4M volume

Entry


The usage of stablecoins is a good indication that everyone there is looking to time a re-entry.

This is because a lot of users are scared that their investment can lose even more value. They are essentially trying to time the market and see the good point of entry to reinvest money.

If you are a long term holder timing the entry again might be tricky and risky, what if the price suddenly goes up and you might be required to buy in at higher price?

It appears that a lot of investors are now waiting for what market is about to do and the moment a breakout is indicated it might be a signifcant bull run.

What will happen?

There are several technical analysis charts out that try to predict what will happen now. Majority of the charts seem to indicate that the price might potentially fall lower even towards $3k but once similar price is achieved we might expect a very significant bounceback.

It appears that 2019 seems to be a bullish prediction for cryptocurrencies with the price potentially rebounding towards the ATH.

We need to remember that fundamentals didn't really change. On top of that the there are exciting developments and adoptions that could take cryptocurrency to the next levels.

Noone knows where cryptocurrency will go from there so at the end of the day all predictions are simply predictions.

Conclusion

The bear market is already 11 months old. If you are a long term holder that have bought at higher prices selling now simply does not make sense.

The cryptocurrency might potentially lose more value but at the same time we might see sudden breakout. If you believe in what the likes of Bitcoin/Ethereum are trying to do then selling now just to potentially buy a bit lower seems a bit high risk/low reward.

It is important to invest into projects that have a future - with working product, partnerships, promising teams, unique technology. I do think a lot of smaller altcoins will die so picking 'winners' is important.

If you like the idea of cryptocurrencies and believe in blockchain then selling now it's too risky. Crypto might decrease in value futher but I still think long term they are not going anywhere hence selling just doesn't seem to be worth it.