To truly understand the reasons behind this ongoing decline in the market, one must first grasp the mindset of market makers. They are acutely aware of the diverse types of traders participating in the current market.
The first group includes those who purchased Bitcoin during its peak two years ago, around $69,000, and have held onto their investment ever since. The second group consists of momentum traders who jump in when the market is experiencing a parabolic surge.
Market makers exploit these groups strategically. How? By initiating a sharp drop to unsettle both types of traders. The goal? To coerce the first group into selling their long-held positions out of fear and to pressure the second group to exit their trades to avoid further losses. This allows the market makers to accumulate Bitcoin at lower prices. Once the market is ready to move upwards again, these same traders will feel compelled to re-enter at higher price levels, effectively buying back Bitcoin at a premium.
This cycle repeats itself. When the next significant drop occurs, these traders are trapped once more, potentially for another two or three years—continuing the market’s cyclical nature. Think of it as a game of musical chairs, with the market makers controlling precisely when the music stops.
What confirms this strategy? Two critical observations:
1. The Market’s New Baseline: The price will not return to the level where this upward movement began. For instance, on November 5th, Bitcoin was trading at $67,481. That price point should not be revisited during this drop. If it is maintained, it’s a sign the market is following the expected trajectory.
2. The BTC-to-Altcoin Ratio: Watch how Bitcoin performs relative to altcoins. As Bitcoin's drop slows compared to the steeper declines in altcoins, the gap will gradually narrow. This trend suggests the market is preparing for a reversal toward the long-term target zone of $100,000–$110,000.
As of now, Bitcoin has declined 7.99% from its all-time high over the last five days. Altcoins, on the other hand, have faced losses of 15–20%. This disparity signals the correction phase is still unfolding. However, as these percentages converge, a reversal is likely, setting the stage for Bitcoin’s upward march.
Stay informed by following my updates for real-time insights into this evolving market landscape.
