Andrew Kang, co-founder and partner at Mechanism Capital, pointed out that most market participants have not realized the significance of Bitcoin potentially breaking out of its price range of the past four months.
Kang compared the current market situation to May 2021, when Bitcoin and other cryptocurrencies also experienced a parabolic rise. At that time, the cryptocurrency market’s leverage exceeding $50 billion (excluding CME) was close to historic highs, but the current scenario is more complex. Kang explained that this current high consolidation period has lasted longer (18 weeks compared to 13 weeks) and has not yet experienced extreme liquidation, unlike the mid-2020 to 2021 bull market which saw multiple pullbacks.
Summing up, Andrew Kang stated, “It’s quite possible that my initial estimate below $50,000 was too conservative, and we could see a more extreme pullback towards the $40,000 range. Such a retracement would be quite detrimental to the market, potentially requiring several months of oscillation/downtrend (recovery period) before a reversal to an upward trend might emerge.”
