Bitcoin tests $63,000 in 'extreme fear'; full-blown capitulation yet to come: analysts
The tumbling crypto market still largely reflects a leverage flush-out rather than a full-blown capitulation, one analyst noted.
According to analysts, the current decline is more closely related to the closing of leveraged positions (leverage flush-out) than a full-blown capitulation of investors. This means that the sell-off is primarily driven by the liquidation of leveraged trading positions, rather than a massive withdrawal of funds from the market.
Despite the significant drop in prices, experts believe that signs of full-blown capitulation in the market have not yet been observed. This may mean that the current correction is not yet complete and further price declines are possible. At the same time, analysts do not rule out that after passing through this correction phase, the market may recover and continue the bullish trend.
Expert opinion
The current events in the cryptocurrency market once again demonstrate that investments in crypto-assets are associated with high volatility and risks. Despite the rapid growth in 2021, cryptocurrencies remain a high-risk instrument, subject to sharp price fluctuations.
Investors, especially beginners, should exercise caution and not invest in cryptocurrencies funds that they cannot afford to lose. Portfolio diversification, proper risk management, and patience are key factors for success when investing in such a volatile asset class.