Amid ongoing debates about the persistent downturn in cryptocurrency markets, Qiao Wang, co-founder of Alliance, offered an insightful perspective.
Wang emphasized that Bitcoin’s price fluctuations are driven less by macroeconomic events or external shocks and more by technical analysis and the psychology of investors.
In a recent social media post, Wang highlighted how market participants have spent months searching for reasons behind Bitcoin’s bearish trend. Throughout this period, various causes have been suggested—ranging from influential market players like Jane Street to threats posed by quantum computing or declines in software stocks. However, Wang pointed out that most of these explanations confuse correlation with causation.
He further explained that traditional financial valuation models don’t apply to Bitcoin since it doesn’t generate cash flow. Instead, its price is largely influenced by patterns identified through technical analysis. Central to this is herd behavior: more traders subscribe to the idea of a four-year cycle rather than a five-year one; thus when these trends break down, many investors exit via profit-taking or stop-loss triggers.
Wang advised patience during this phase until market sentiment reaches full “capitulation.” At such a stage—when selling pressure diminishes—the downward trend could reverse naturally without needing any external catalyst.
Please note: This should not be considered as investment advice.