Interpreting the ripple effects of Black Thursday from three perspectives

As the Bitcoin market enters a major correction phase, multiple industry analysts have commented on market trends. Voices analyzing the market decline from different perspectives are emerging, providing investors with more decision-making material. After the sharp drop event called Black Thursday, various opinions are attracting attention regarding how market participants should respond.

Market Mechanism: Position Liquidation Has a Double Effect

Cryptocurrency analysis platform Skew has conducted a detailed analysis of this decline. It points out that during the downturn, liquidation of both long (buy) and short (sell) positions occurred simultaneously. Stop-loss orders from long position holders were triggered one after another, while short sellers hurried to take profits. Such a situation, where pressure comes from both sides, causes confusion among market participants. This chain reaction is a typical pattern during sharp drops like Black Thursday and significantly increases short-term volatility.

Difficulty in Market Forecasting and the Importance of Long-Term Investment

Chris Burniske, a partner at investment fund Placeholder, argues that investors who did not sell after the FOMC (Federal Open Market Committee) meeting do not need to regret. He believes that it is extremely difficult even for experts to fully predict market reactions. He emphasizes that the key investment strategy is to slow down and avoid excessive trading. For long-term investors, short-term market adjustments like Black Thursday are not a major concern. The logic is that remaining patient and holding steadily ultimately leads to the right decision.

Macroeconomic Environment Presents Challenges to BTC

André Dragos, Head of European Research at Bitwise, analyzes the current market environment from a more structural perspective. Despite the Federal Reserve lowering interest rates, he notes that the real financial environment remains somewhat tight. Rising yields on long-term bonds, increasing mortgage rates, and a strengthening dollar are all headwinds for Bitcoin. He mentions that the combination of tightening liquidity and a strong dollar is the biggest risk factor facing BTC.

While these macro factors seem serious, Dragos also points out that even after corrections like Black Thursday, on-chain indicators are not bad. Specifically, Bitcoin continues to flow out from exchanges, supporting the hypothesis that the market supply gap is widening. In other words, although there is short-term economic pressure, the long-term fundamentals remain relatively solid.

While the market is in a correction phase, as pointed out by multiple experts, the decisions and actions taken during this period will greatly influence investment outcomes.