Early Warning: 10 Signals of a 50% Bitcoin Crash and Risk Mitigation Strategies

Signal 1: Trading volume continues to fall

Volume is the basis of the trend, and Bitcoin’s average daily trading volume has gradually declined over the past two weeks, indicating that buying interest is no longer active and market participation is weakening.

Signal 2: RSI and MACD Divergence

The price has reached a new high, but the RSI and MACD indicators have not strengthened in sync, which is a typical “top divergence” signal.

Signal Three: The leverage ratio in the futures market increases

Data shows that the long leverage in the derivatives market continues to heat up, and if the market reverses, it could trigger a chain liquidation.

Signal Four: Huge space below the 50 EMA

The current Bitcoin price is far above the 50-day EMA (around $60,000). Once the adjustment begins, the mean reversion can be extremely damaging.

Signal Five: The Federal Reserve’s Monetary Policy Tightening

The Federal Reserve may raise interest rates in the fourth quarter of this year, leading to tightening global liquidity, with risk assets being the first to bear the brunt.

Signal 6: ETF capital inflow slows down

The inflow of Bitcoin spot ETF funds has slowed since early July, indicating that institutional capital is shifting to a wait-and-see stance.

Signal Seven: The popularity of encrypted social media is declining

Google Trends shows a decline in Bitcoin keyword popularity on X (formerly Twitter), with retail investor participation sentiment weakening.

Signal 8: Altcoins are weakening in sync

When altcoins fall in sync and are weaker than BTC, it usually indicates that the market is about to enter a deep adjustment period.

Signal Nine: On-chain indicators weaken

The number of active addresses on the Bitcoin blockchain and the number of transfers have decreased, reflecting a decline in fund transfers and user activity.

Signal Ten: No clear adjustment time window

FriendlyRox mentioned that the adjustments may not happen immediately, but will brew over the next few weeks or months.

How to carry out risk prevention?

• Cash is king: Keep 30%-50% of funds on hand to cope with sudden falls;
• Reduce leverage: At this stage, we should return to low leverage or even zero leverage operations;
• Take profit and stop loss simultaneously: Profit orders take profit to secure capital, and set stop loss for high positions.
• Pay attention to key support: the three major support zones of $90,000, $75,000, and $60,000 are crucial.

Conclusion

Every step of Bitcoin at the high point of the bull market is worth being vigilant about. The “50% Bitcoin Price Crash” is not a certain event, but the risk signals are already clearly visible. Investors should continue to learn fundamental and technical tools, flexibly allocate assets, and remain undefeated in the next round of big fluctuations.