According to Odaily, Andrew Kang, co-founder of Mechanism Capital, has shared his insights on the current state of the cryptocurrency market. He noted that many cryptocurrency investors are experiencing their first cycle and full bull market. Throughout this bull market, the multi-day decline of Bitcoin (BTC) has been very limited, restricted to within 20%. Many investors seem to have increased their holdings during the last correction in April.
However, Kang pointed out that in the previous cycle, the market often underwent leveraged clean-ups, leading to a 30% to 60% pullback, evaporating hundreds of billions of dollars in total. He warned that when people become too complacent, believing that certain things are impossible, it is usually the eve of a disaster. Although Kang holds a bearish stance, he clarified that this does not mean to short the market or sell everything. He advised investors to be mindful of their risk and not to bet everything on one trade, as larger than expected volatility could lead to significant losses.
Kang further added that the current market environment reminds him of May 2021, not June 2021, and certainly not December 2020. At that time, people had become accustomed to only rising prices and were scrambling to buy at the bottom. The market experienced a major adjustment from $64,000 to $45,000, but everyone was expecting a market rebound. However, the result was a continuous downward trend. He noted that the current environment is similar, occurring 9-10 months after the start of a bullish momentum.
Despite the Ethereum ETF and legendary traders expressing bullish sentiments, Kang believes that the market could still experience extreme corrections within a few months. He expressed confidence in GCR's multi-year timeframe, predicting that BTC will reach new highs in 2025, although not all altcoins will follow suit. He concluded by saying that the market will teach you humility.