Andrew Kang: It is possible to see Bitcoin extreme pull back to the $40,000 range

ChainCatcher news, Andrew Kang, co-founder and partner of the crypto venture capital firm Mechanism Capital, stated on social media: "Most market participants are unaware of the severity of the potential drop in Bitcoin's 4-month volatility range. The closest similar situation we can find is the range from May 2021, when Bitcoin and altcoins also experienced a parabolic rise.

The leverage in cryptocurrencies above $50 billion is also close to historical highs (excluding CME), but in this case, our range duration is longer (18 weeks vs. 13 weeks), and there has not yet been extreme liquidation, whereas we experienced several during the bull market from 2020 to 2021.

My initial estimate of a $50,000 low may be too conservative, and we might see a more extreme pullback to the $40,000 range. Such a pullback could cause significant damage to the market and may require several months of consolidation/downtrend (recovery period) before a potential upward trend reversal."