How low can it go? Scary prediction on Bitcoin capitulation
Bitcoin investors have lost over $1 trillion in one of the most brutal months in history and experts predict the crash isn’t yet over. But should investors panic sell, hold or buy the dip?
Bitcoin holders have endured one of the most brutal months in cryptocurrency history but while experts warn it could plunge even further, they say investors should hang on for the ride.
The last month has seen more than a trillion US dollars wiped from global markets as the world’s biggest digital asset plunged from highs above $US120,000 to the low-$US80,000 range.
Industry experts warn that the slide may not yet be over with projections it could drop as low as $US70,000.
Rachael Lucas, Marketing & Communications Manager at BTC Markets, says the rapid swings pose real danger for overextended retail investors.
“The main concern is that many retail investors are over-leveraged, which amplifies both gains and losses,” Ms Lucas explains.
“When markets move quickly, those positions can liquidate almost instantly, creating further volatility and panic.”
Where Bitcoin Is Headed
Certified Financial Technician and News Corp columnist David Bird, known as ASX Trader, first sounded alarms when Bitcoin surged from around $US104,000 to $US116,000, a move he says “was going up on weakness.”
“That’s why I wrote that article saying, guys I’m seeing a top here — just be careful, it’s likely going to head down,” Bird says, adding he had already identified danger signs back when Bitcoin was trading around $US125,000.
Mr Bird predicts the crypto market could still see further declines before stabilising:
“I’ve got it still going down to below $US70,000,” he says.
“Typically the price will come back to the area where the momentum divergence started, that’s around that $70k zone … That’s why I’m looking at those high-60s as that kind of area.”
Crypto Movements Driven by Traditional Finance
Kevin Brown, founder of Sydney blockchain start-up Coinage, said price swings are often more influenced by the wider financial system than by crypto-specific developments.
“The main thing I’m noticing is that movements in the crypto price are generally driven by the traditional financial system more than what’s happening in cryptoland.”
For ordinary investors, his advice mirrors the long-term approach emphasised by other experts:
“Think of this like any kind of longer-term investment. The price will go up, the price will go down. The trick is to do the opposite of what the herd is doing.”
“It’s a very volatile asset. If you’re going to get into it, trying to panic and day-trade all the time is generally not productive. The best way is to grab it, hold it, and be in it for the long term.”
Darcy Allen, Associate Professor of Economics at RMIT University, cautioned about confusing crypto’s long-term trajectory with its cyclic nature.
“Every cycle we hear that crypto is finished. But big price drops don’t impact the long-term opportunity. The applications of digital assets don’t disappear just because the price moves,” Allen said
“Plenty of investors across crypto and tech equities are panicking right now. But when you look at longer-term trends, these short-term swings are far less dramatic than they feel in the moment.”
Thinking opposite to the masses
While Mr Bird accurately called the initial downturn, he stresses that predicting the speed of a rebound is tricky:
“The quickness of the drop happened a little quicker than I thought,” he admits.
“You never know if it’s going to be one month, six weeks, six months.”
Investors should watch technical indicators for signals that momentum is shifting:
“The price actions making lower lows and lower highs — that would have to turn around … You’ll start seeing bullish divergences down at those key levels.”
“And you look for that capitulation, that fear, because markets are designed for the little guy to lose. You almost need to think opposite to the masses.”
Should Investors Panic Sell, or Buy the Dip?
Mr Bird’s advice depends entirely on the investor’s time horizon.
For long-term holders:
“Ask yourself, when I bought, was I looking to make money in a couple of months or over the next 5–10 years?”
“If you’re a long-term holder, why do you care about the day-to-day noise? I look at my long-term portfolio four times a year. That’s it.”
For those tempted to ‘buy the dip,’ Mr Bird warns the best opportunity often comes when fear is highest:
“You can see where that capitulation and fear will come in – when everyone’s on the other side of the boat. That’s typically the best time to buy.”
He stresses having a plan:
“What’s your time horizon? What’s your trade plan? Are you trying to get rich on one cycle, or are you in it for the long term?”
“Don’t just guess. Follow the data.”
Look to the long term
Mr Bird’s advice is echoed by BTC’s Rachael Lucas.
“Crypto is volatile by nature. If you are overexposed or chasing short-term moves, it can be very dangerous. Focus on long-term investment horizons and avoid letting fear drive your decisions.”
Mr Allen also highlights the long-term nature of the investments.
“Hype and rising prices have brought new audiences, investors and innovators into crypto. The corrections can then flush out excess leverage and hype. It’s a familiar cycle of early-stage technology.”
“For many Australian investors, crypto is just one part of a diversified portfolio. The key is not to overextend, but to understand it as a long-term exposure to frontier technology.”
The Bottom Line
Bitcoin’s crash has rattled markets, but the experts argue this is part of a necessary reset before the next major cycle.
Until charts show a clear reversal, the safest strategy remains patience, discipline, and long-term focus, while avoiding over-leveraged positions, panicked trades, and short-term speculation.
What comes after Bitcoin’s capitulation will be enormous
