As always in the crypto market, fear and greed rule the minds of its participants. Thus, in the course of various discussions on the future of Bitcoin (BTC), a theory has emerged that suggests that the asset may fall hard in the short term as the markets face a “black swan.”
According to the theory, since Bitcoin is a highly liquid asset, it will initially sell off sharply as investors liquidate their positions to cover losses on other leveraged bets. This will be a tough time for bulls and holders of long leveraged positions, but it will also lead to a large V-shaped recovery that will push the cryptocurrency to new all-time highs.
In response to this theory, Samson Mow, a well-known proponent of the major cryptocurrency, offered a different perspective. Thus, the well-known crypto pioneer noted that past trends show that Bitcoin is resilient even during severe market downturns.
I think we’ve seen that sub 50k a ton of capital is willing to deploy. The last market crash saw Bitcoin recover very quickly the second US markets opened. So I would expect the same in another crash which means it’s not likely Bitcoin can go that low in a Black Friday crash.
— Samson Mow (@Excellion) August 18, 2024
He pointed out that during the last major market crash, Bitcoin showed a strong recovery as soon as the U.S. markets reopened. This gives reason to believe that it is unlikely to fall below $50,000 during another potential market crash, says Mow.
As a reminder, the latest round of crypto market crash occurred at the end of the first week of August, when in one single day the price of Bitcoin fell by more than 15% and reached $49,000 — lows not seen since the beginning of the year. The crash was caused by recession fears as many market participants began to liquidate their positions in crypto as the most risky asset.
