Andrew Kang, co-founder and partner at Mechanism Capital, said most market participants don’t realize the significance of Bitcoin’s potential loss of a four-month-old price range.
Most market participants are not appreciating the significance of a potential loss of a 4-month range on BitcoinThe closest parallel we can draw is to that of the range of May 2021 where we also came off a parabolic rally of BTC and alts$50B+ of crypto leverage here is… https://t.co/R3qAcCajAC pic.twitter.com/B4bpeoZwxo
— Andrew Kang (@Rewkang) July 3, 2024
Andrew Kang compared current market conditions to the range in May 2021, when Bitcoin and other cryptocurrencies also experienced a parabolic rally. This time the cryptocurrency market leverage exceeds $50 billion (excluding CME), which is also close to all-time highs, and this time the situation is more complicated. Andrew Kang explained that this high consolidation range has lasted longer (18 weeks vs. 13 weeks) and has not yet experienced an extreme liquidation. In contrast, the mid-term bull market of 2020-2021 experienced multiple retracements.
Andrew Kang concluded:
“It is possible that my initial estimate of sub-$50,000 was too conservative and we could see a more extreme pullback into the $40,000 range. Such a pullback would be quite detrimental to the market and could take several months. A reversal of the upward trend is possible only during the shock/downward trend (recovery period).”
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