Andrew Kang: We may see an extreme correction of Bitcoin to the $40,000 range

Andrew Kang, co-founder and partner at Mechanism Capital, wrote on X platform: “Most market participants do not realize the severity of the possible decline in Bitcoin’s 4-month volatility range. The closest similar situation we can find is the range in May 2021, when Bitcoin and altcoins also experienced a parabolic rise. The leverage of cryptocurrencies above $50 billion here is also close to the historical high (chart excludes CME), but in this case, our range is longer (18 weeks vs. 13 weeks) and there has not yet been an extreme washout, which we experienced several times during the 2020-2021 bull run. My initial estimate of a low of $50,000 may be too conservative, and we may see a more extreme correction to the $40,000 range. Such a correction may cause considerable damage to the market and may require several months of shock/downtrend (recovery period) before a reversal to the upward trend may occur.”