The 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.” Related Reading: Longest Miner Capitulation Since 2022 Signals Potential Bitcoin Rally Ahead He noted the similarities in market conditions, particularly in terms of leveraged positions, which currently exceed $50 billion.“This figure does not include the Chicago Mercantile Exchange (CME), which is higher, but compounded by the fact that in this scenario we have ranged even longer (18 weeks vs.13), and we have not had extreme washouts yet while we had a few in the middle of the 2020-2021 bull market,” Kang elaborated.
Kang also adjusted his projections for Bitcoin’s bottom, suggesting a steeper fall than earlier anticipated: “It’s likely that my initial estimates of low $50ks were too conservative and we see a more extreme reset to $40ks.” He warned that such a pullback could significantly damage the market, necessitating a few months of consolidation and a downtrend before any reversal to an upward trend might be conceivable.
Andrew Kang, co-founder of Mechanism Capital, has raised significant concerns regarding the pattern emerging in the Bitcoin market, reminiscent of the conditions that led to the dramatic crash of May 2021.
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