According to BlockBeats, Andrew Kang, the co-founder and partner of crypto venture capital firm Mechanism Capital, has expressed concerns about the potential severity of Bitcoin's downturn. He shared his views on social media on July 4, stating that most market participants may not be aware of the seriousness of a possible decline in Bitcoin's volatility range over the next four months.
Kang drew parallels to a similar situation in May 2021, when Bitcoin and altcoins also experienced a parabolic rise. He noted that the leverage of cryptocurrencies over $50 billion is also close to historical highs, excluding the Chicago Mercantile Exchange (CME). However, in this case, the range time is longer (18 weeks vs 13 weeks), and there has not yet been an extreme washout, which was experienced several times during the bull market from 2020 to 2021.
Kang's initial estimate of a $50,000 low point may have been too conservative. He suggested that we might see a more extreme pullback to the $40,000 range. Such a pullback could cause significant damage to the market and may require several months of oscillation/downtrend (recovery period) before a potential upward trend reversal could occur.
