Yesterday’s cryptocurrency market saw a loss of nearly $30 billion, causing Bitcoin (BTC) to sink to a 2018 low point and forcing many altcoins to new all-time lows. Is this what Bitcoin capitulation looks like?
So far, November has once again shown off its famous volatility — and while, historically, this has normally signaled an upward price movement, this time around, Bitcoin (BTC) and the crypto space plunged to double-digit percentage losses in the span of just 12 hours.
Losses across the board totaled a whopping $30 billion dollars lopped off of the total cryptocurrency market cap value — its biggest loss since the beginning of September.

Crying Uncle?
In traditional markets, a normal market cycle contains a phase commonly referred to as ‘capitulation,’ where inexperienced investors will finally surrender their positions and sell at a huge loss to avoid any further unrealized losses. This move is often joked about as the ‘buy high, sell low’ strategy and highlights just how irrational investors can act during prolonged periods of downward movement — as well as how much of a role one’s emotions can play when there is little-to-no plan of action in place on their entry and exit for any given position. It is no secret that investors will have certain emotional responses, which will often present as a reflection of the state of the market they are invested in. This is often times shown as a sinusoidal graph that can help us to better understand how easily the market can influence the spectrum of positive and negative emotions and, in turn, how those emotions can cloud judgment and be detrimental to a portfolio. A 2012 article from Forbes presented a graph, reproduced below, displaying these common emotional responses to an upward and downward moving price.
Tips ‘n’ Tricks
Separating emotions from our investments can be one of the most challenging hurdles to overcome for an investor, but can really help to mitigate losses during times of uncertainty or a market downturn. The number one thing to keep in mind anytime you look to take a position is to make a plan on an entrance price and exit price — before jumping in blind. There is absolutely nothing wrong with cutting your losses on a position if it starts to run away from you. By having stop-losses set to buy or sell when the price reaches a certain mark, each individual investor is able to set parameters for acceptable losses and gains and helps to take the emotional guesswork out of the equation during the bad times. (And the good.) Seasoned investors and Wall Street will look forward to these capitulation periods knowing that they will be able to accumulate on their long-term positions with projects of companies that they believe in for the long haul. Some say smart investors think in terms of years or decades, not months or quarters.
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