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Peter Brandt, the CEO of Factor, stated that the decline in the price of the leading cryptocurrency is not due to panic among retail investors. The cause of the crash is attributed to the deliberate actions of major market players.
According to Brandt, the current movements in Bitcoin’s price exhibit characteristics of a “classic planned sell-off.” The first cryptocurrency has been setting new local lows for a week.
“I have witnessed similar situations hundreds of times throughout my decades in financial markets. Bitcoin is facing not spontaneous sell-offs, but a calculated liquidation of positions aimed at capturing liquidity at critical support levels,” the executive elaborated.
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Prior to the crash, the cryptocurrency market was overheated — a significant number of traders were opening long positions with high leverage, said the head of Factor. It was sufficient for large players to sell a substantial amount of the first cryptocurrency to trigger a series of forced liquidations of such trading positions, he suggested.
Brandt believes it is impossible to accurately predict when the period of Bitcoin’s decline will end. By eliminating retail investors, major players are laying the groundwork for future growth, and they do not view the current price drop as a catastrophe.
Previously, Peter Brandt indicated that Bitcoin’s price risks mirroring the price dynamics of soybeans in the 1970s, which led to a decline in the commodity by more than 50%.
