The recent volatility in the cryptocurrency market has prompted leading experts to offer insights into Bitcoin's notable price plunge. Veteran trader John Bollinger and Fundstrat's Tom Lee have shared their analyses, pointing to specific technical indicators and systemic issues that may have contributed to the downturn.
Bollinger's "Failed Pattern" Alert
Prominent chartist John Bollinger, creator of the Bollinger Bands, identified crucial warning signals preceding Bitcoin's recent dip. He observed a BTC/USD pattern in October that, despite pushing prices towards the upper Bollinger Band, failed to yield expected gains—a "failure" that he flagged as an alert for potential market weakness. A similar pattern emerged and failed again in November. Bollinger emphasizes that such "broken" or failed patterns are just as informative as successful ones, providing vital clues about the underlying market environment and signaling when it's time to exit a trade, particularly after a new low is established.
Tom Lee on Market Weakness and Coding Errors
Adding to the discourse, Fundstrat's Tom Lee attributed the market's struggles to broader issues, noting that the crypto market had been "limping along" since October 10th. Lee specifically pinpointed a massive liquidation event as a major catalyst, which he attributed to a critical coding error. This error, according to Lee, triggered extreme forced deleveraging across the market, effectively crippling market makers and contributing significantly to the widespread wipeout witnessed in recent weeks.
