‘Someone Explodes’ – Bitcoin Sees 2022 Volume Record on Hopes Capitulation is Over

Bitcoin (BTC) falling below $36,000 “smacks of capitulation,” says a trader, amid growing suspicion over US stock markets.

in one tweet On May 6, Cointelegraph contributor Michaël van de Poppe suggested that BTC prices are at least giving “serious signals.”

Analyst: Stocks saw ‘forced liquidation’

After plunging to 10-week lows in line with stocks on Wall Street’s May 5 trading session, Bitcoin rallied to levels last seen in February.

The downturn in both crypto and stocks, which followed an initial bounce the previous day on expected rate hikes by the Federal Reserve, appeared to be more than traders were expecting.

The S&P 500 ended the day down 3.5%, while the Nasdaq 100 ended down 5%. Outside of equities, 10-year US Treasury futures lost 1%, a rare combination that caused some market participants to pause.

Jason Goepfert, founder of Sundial Capital Research, noted that such a chain of events had only occurred twice in the last quarter century – during the 2008 global financial crisis and the March 2020 COVID crash.

“Somebody explodes, and that’s a forced liquidation,” he said told Twitter followers.

In the last 25 years, there have been 2 days when S&P 500 futures are down 3% and 10-year Treasury futures are down 1%:

October 9, 2008
March 18, 2020

Someone explodes, and that’s a forced liquidation.

— Jason Goepfert (@jasongoepfert) May 5, 2022

As such, the chain reaction in Bitcoin may have been the capitulation event that many had previously said was necessary due to changing economic conditions in the US.

“That smacks of surrender to me, or at least some serious signals overall,” commented Van de Poppe.

He noted that the decline also produced the highest volume 4-hour candle since early December in BTC/USD. As Cointelegraph reported, volume was a key aspect that needed to return in order to create a more compelling capitulation event.

Meanwhile, data from Cointelegraph Markets Pro and TradingView showed that relative calm returned to Bitcoin markets overnight.

BTC long liquidations near January highs

However, when assessing the impact of the dip on the hodlers, it turned out that the day’s losses hadn’t resulted in a full reset of the market.

Related: $27,000 ‘maximum pain’ Bitcoin price is the ultimate buy-the-dip opportunity, says research

Liquidations have remained fairly tame across all cryptocurrencies, with BTC accounting for $190 million in the 24 hours to press time. This was the highest daily tally in several months, but did not surpass January’s cascade to $32,000.

The remaining $200 million came from altcoin pairs, data from on-chain monitoring resource Coinglass showed.

“Regardless of what I say near-term, macro is still bearish,” said popular trader Crypto Chase summarized about the view.

“There will be bounces, pops, squeeses, short-term euphoria, you name it… but I don’t think we’ll see a macro reversal ahead of any major capitulation OR Fed retracement stance on rate hikes/QT/balance cut.”

The views and opinions expressed herein are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should do your own research when making a decision.