Confused about Bitcoin’s sudden plunge? Seasoned investors share their perspective on the bull market crash

Confused about Bitcoin's sudden plunge? Seasoned investors share their perspective on the bull market crash

Confused about Bitcoin's sudden plunge? Seasoned investors share their perspective on the bull market crash

Last night’s pullback left many retail investors who have just entered the cryptocurrency market frightened. However, for seasoned investors who have experienced multiple bull and bear cycles, such price volatility is nothing extraordinary. Let’s take a look at the perspectives of market analysts and veteran players on yesterday’s fluctuations.

Contents:
Toggle
Spartan Group Co-founder: Good time to establish positions
QCP Capital: $60,000 forms a support level
Mechanism Capital Partner Andrew Kang: Continuation of “up only” after several liquidations
CEHV Partner Adam Cochran: Management and strategies for leverage
Veteran KOL Woody: Holding is more important than having more

Spartan Group’s Co-founder and Managing Partner, Kelvin Koh, summarized six points regarding last night’s steep drop:
1. Such adjustments are not uncommon in the cryptocurrency market. With the market’s ascent, there will be several adjustments like this throughout the year.
2. The market will rebound quickly. Idle capital will be put to use. The fundamentals have not changed. (At the time of writing this article, a rebound has already occurred.)
3. This sell-off will clear the leverage and positions accumulated over the past few weeks, laying the foundation for the market’s next rebound.
4. Your investment portfolio should be able to withstand such a major drop. If you wash out because of this, you should reflect on your inadequate risk management. Even in a bull market, the market will continuously eliminate the weak in this manner.
5. If you have been in a wait-and-see mode until now, this is a good time for you to enter the market. BTC will not drop to $42,000.
6. If there are tokens you want to buy but your position is not large enough, or if you missed the buying opportunity, this is a good chance to adjust the size of your position.

QCP Capital posted on its Telegram channel that last night’s leveraged longs experienced a significant decline, with the nominal liquidation amount on Binance alone exceeding $1 billion. However, buying pressure quickly intervened during the drop, and the $60,000 price level proved to be a good support level.

Furthermore, during the drop, traders’ strong interest in purchasing BTC and ETH call options for September to December was evident. At the same time, with the narrative of an ETH spot ETF starting to take effect, ETH’s performance may surpass that of BTC in the future.

Mechanism Capital Partner Andrew Kang wrote on X platform that there is a reflexive factor in adjustments to all-time highs (ATH). People sell because they see that ATHs are always rejected, and when this situation actually occurs, more people follow suit and sell. Short-term intense liquidity (traders with over $1 billion) will outweigh passive liquidity (ETF purchases over $500 million). However, passive liquidity will ultimately prevail.

Nevertheless, it remains attractive to reserve some cash to bid on altcoins when they experience a decline of over 40%. After several liquidations, the market will continue “up only.”

CEHV Partner Adam Cochran shared his past trading strategies in response to last night’s volatility, providing reference for investors using leverage strategies.
“Reflecting on my days as a fervent user of leverage on Binance and FTX, I would convert 25% of my funds into cash on days when the gain exceeded 10%, in order to increase my leverage when we experienced a red candlestick of over 4% (assuming I didn’t think it had peaked yet). My rule of thumb was that I only allowed myself to increase leverage when we had two consecutive days of gains, and then I had to cash out more than 50% of the net profit, preserving it in a 50% cash, 50% spot form.”

Well-known Mandarin-speaking KOL Woody also reminded investors in a post last night not to overreact to sudden drops during a bull market:
“In a bull market, there will be many sudden drops. Spend less time monitoring the market. Holding is more important than having more. Reduce noise and enjoy life outside by dining and indulging. Most people cannot make short-term profits, but they can earn from the bull market’s dividends. Opportunities to see the reality are scarce.”