To truly comprehend the recent market drop, one must delve into the psychology of the market makers. There are two distinct types of traders currently in play: first, the long-term holders who purchased BTC at its peak of $69,000 two years ago and still clutch their positions, perhaps hoping for a return to those highs; second, the wave surfers—those who jump in at the sight of a market pumping uncontrollably, chasing the surge without considering the risks. Market makers, ever aware of these two types, expertly exploit their behaviors.
By orchestrating a sharp drop, they stir panic, causing both groups to sell off their positions in fear of further losses. This orchestrated chaos serves their purpose: clearing out weak hands and resetting the market. When the time is right, the market makers shift the momentum upwards once more, but now, BTC is priced higher. The long-term holders, having sold in the panic, are forced to buy back in at a premium. The wave surfers, too, buy in at these elevated levels, only to face another potential drop. It’s a cruel cycle, akin to a game of musical chairs, where the market makers control the music and know exactly when to stop, trapping those who fail to see the long-term play.
To anticipate this cycle, two key indicators should be watched. First, the market is unlikely to return to the price point where it began this recent surge—on November 5th, BTC was priced at $67,481, and we should not expect it to dip that low again. Second, by observing the relationship between BTC and altcoins, we see that while BTC has lost 7.99% of its all-time high in the past five days, many altcoins have lost 15-20%. This suggests that the drop has further to go, but as the gap narrows and the declines begin to soften, a reversal toward the $100,000-$110,000 range becomes more likely. By keeping a close eye on these indicators, we can better understand where the market is headed and avoid falling into the traps set by the market makers.
