CryptoQuant CEO Issues Bitcoin Price Crash Warning: Here’s Why

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In a recent tweet, Ki Young Ju, CEO of CryptoQuant, warned Bitcoin traders about potential market movements that could signal a shift in the bullish trend. With Bitcoin reaching a new all-time high of $109,358 on January 20, the question arises—will the current surge continue, or are we on the brink of a pullback?

Another signal in question comes from the MACD (Moving Average Convergence Divergence) of the PnL (Profit and Loss) Index, a key technical indicator. The 365-day moving average (MA) for this signal is currently at a critical inflection point, which has historically been a precursor to significant market shifts.

Su mentioned that this inflection point suggests that Bitcoin’s current bullish momentum may be losing steam, and we could be on the verge of a larger pullback or consolidation phase. We completely agree with this analysis.

Bitcoin's Bullish Momentum: Time to Be Cautious

While many analysts are predicting an extended bull rally, with some targeting outrageous figures like $500,000 to $50,000,000+, Ju remains cautious. He highlighted the potential for a pullback or a period of sideways movement, particularly for those using leverage. While his long-term outlook for Bitcoin remains positive, as indicated by other alleged bullish on-chain metrics, he anticipates that the short-term could bring consolidation or a minor dip. Ju's caution comes amidst a volatile market where predictions are never guaranteed.

We'll be releasing a separate newsletter article shortly, providing our readers with an updated short-term and long-term outlook on the crypto markets. That article will offer valuable insights and detailed reasoning behind our perspective. Stay tuned for that.

Why Leverage Traders Need to Be Careful

Leveraged trading can boost profits, but it also comes with heightened risks. In a market as volatile as Bitcoin's, leveraged positions are at risk of liquidation, which occurs when an exchange closes a trader's position due to unmet margin requirements. Large-scale liquidations often signal market extremes, such as panic selling or buying, and can cause significant price swings.

When the crypto markets enter a stage of pure hopium, manipulation, and baseless speculation—as we’re seeing now—retail investors often forget the risks and go all-in, sometimes opening highly leveraged trades near the peak. This leads to minor drawdowns being drastically overstated, causing prices to plunge and triggering sweeping, record-breaking liquidations. This scenario is bound to occur during the next downturn, so if you're using margin, it's critical to reduce or close those positions now.

Bitcoin’s Record High: What’s Driving It?

After two months of consolidation, Bitcoin reached a new all-time high of $109,358. This surge coincided with the launch of a U.S. Securities and Exchange Commission (SEC) task force focused on digital-asset regulations. The task force aims to establish a clear regulatory framework, with SEC Commissioner Hester Peirce, known as "Crypto Mom," leading the efforts.

As of writing, Bitcoin is trading around $105,076, slightly below its record high. While the broader crypto market remains mixed, all eyes are on upcoming economic data, which could offer insights into the market’s direction.

The Key Drivers Behind Bitcoin’s Surge

Several factors have contributed to Bitcoin’s rise, but one primary driver has been the printing of stablecoins. While Tether has reduced its issuance over the past month, USDC has been printed at record rates to artificially support the markets. Without these stablecoin injections, Bitcoin's trading volume would be a fraction of what it is today.

However, stablecoin printing isn’t the only tactic at play. These coins are being printed and injected into the market, paired with calculated, manipulative narratives pushed by crypto mainstream media—media often controlled by the same entities behind the stablecoins. For example, the narrative that Trump would establish a Bitcoin Strategic Reserve was taken out of context. Trump actually referred to the U.S. government holding seized Bitcoin to pay off the national debt, rather than simply selling it or distributing it to victims. Furthermore, claims that Trump had purchased Bitcoin as part of the strategic reserve were debunked when he admitted that he had no knowledge of a crypto wallet under his name. The “Bitcoin” transferred into that wallet wasn’t even BTC—it was an ERC-20 token called WBTC, which has no connection to the Bitcoin network.

In times like these, when retail investors overlook the reality and blindly buy into a manufactured bubble, risk is at its peak. As CryptoQuant founder Ki Young Ju warns, caution is crucial in the coming weeks. Our goal isn’t to encourage you to sell or abandon your beliefs but to help you navigate the noise with contrarian, fact-based analysis. In a world full of moonboys, this perspective is essential.

Thank you for reading.

Stay informed, stay cautious, and as always, trade wisely.