Bitcoin fell to US $ 7,982, according to Coinmarketap data. Therefore, it broke below US $ 8,000 for the first time this month . The price was recovered by jumping to US $ 8,109, but the bears were strong enough to send the price below the US $ 8,000 level again.
One of the possible reasons behind the continuous decline is the so-called mining capitulation. The phenomenon was discussed in detail by crypto analyst Cole Garner, who argued that small miners are forced to give up the process, it becomes too expensive for them, according to Cryptocurrency .
The gradual departure of disgruntled miners could soon end in a massive sale, which could drag the price of Bitcoin to new lows that were unthinkable last summer.
Another plausible reason is that Bitcoin investors overreacted to the backing of Chinese President Xi Jinping to blockchain technology .
Xi’s message catapulted the price of Bitcoin at the end of October , causing it to show the biggest short-term uptick in its history by earning more than 40% in less than 2 days. Now the FOMO effect has probably faded a bit and the market is returning to normal, although nobody knows where the next stop is.
Turn up the volume of Bakkt
Bitcoin’s bearish mood does not affect the appetite of institutional investors . On the contrary, according to the Twitter bot that reports on Bakkt’s volume , more investors have negotiated Bitcoin futures contracts on the platform in the last four days, when the price was clearly pointing down.
The open interest indicator, which shows the total value of open contracts, has also increased.
If Bitcoin tests new levels of support amid the ongoing mining capitulation, we could see institutional investors reactivating FOMO.