- Projects with lower consensus collapse first.
When uncertainty strikes, sellers will dump the assets they are least optimistic about. For example, coins with low consensus will collapse first and bleed out sooner.
Think about it logically: if you urgently need money, you wouldn’t sell your valuables, but rather those things you don’t use and aren’t worth much.
Similarly, when traders are uncertain about market trends or wish to reduce risk, they often sell the assets they are least emotionally attached to in order to cash out.
This phenomenon occurs every time Bitcoin reaches a peak, and it is no coincidence. Altcoins do not rise after Bitcoin peaks; they rise in tandem with Bitcoin as it peaks. They show signs of fatigue before Bitcoin does, peaking weeks earlier.
This is an early warning signal. Smart traders reduce risk before others even realize what is about to happen.
- Risk vs. Blue-Chip Coins
Let’s revisit the previous logic: people will hold onto their cherished high-quality assets for as long as possible, only parting with them when they have no other choice.
The most sought-after coins typically hold onto their gains as much as possible. This is why Bitcoin always appears resilient, and in the weeks leading up to a market crash, social media is flooded with posts like, “Why are people panicking? Bitcoin is clearly stable.”
Selling order:
a) Junk coins first
b) Then blue-chip coins
c) Finally, all coins are sold off
- The reflexivity effect emerges
Weakness leads to more weakness.
When whales begin selling off in a market with dwindling demand, it triggers market weakness. This is a typical characteristic of the distribution phase: lack of buyers, dwindling demand, and a trend moving away.
The shift in the characteristics of risk assets will prompt the core decision-makers among experienced traders to reassess their strategies.
“I couldn’t sell at the top, but the market nature has changed. It’s time to reduce exposure or close positions.”
“If this decline is considered a nuclear-level crash, what other risks are lurking in my account?”
Suddenly: Position adjustments trigger further selling, which is the reflexivity—a positive feedback loop of declining risk appetite.
- Volatility: The final dance
When a Bitcoin crash is imminent, the market often becomes eerily quiet: volatility plummets, prices trade in a narrow range, and complacency reaches its peak.
Then, boom—it crashes.
Now, let’s focus on the essence of market balance and imbalance.
Balance is achieved when market participants gradually reach a consensus on what is expensive and what is cheap. This is a dance. This is equilibrium.
Equilibrium means calm. Known information has been digested, speculative activity has weakened, and volatility has narrowed.
This dance continues until one side grows weary, exhausted, or decides to head to the bar for another drink. That is, buyers or sellers become exhausted; or supply and demand change.
Equilibrium is disrupted. Once it is broken: imbalance emerges.
Prices deviate sharply from their original positions. Value becomes unclear; volatility surges. The market craves balance and will actively seek it.
Prices often return to areas where balance was recently formed: such as high-volume points, order blocks, or comprehensive value zones.
It is precisely in these areas that you will see the most intense rebounds.
“The initial test is the optimal timing.” Subsequent tests yield increasingly weaker reactions. The situation becomes structured. Prices stabilize at new levels. Volatility contracts. Balance returns to the market.
- Selling Process and Bottom Identification
Surrender selling is not the beginning of the end but the end of the middle phase.
a) Altcoins vs. Bitcoin
In this cycle, altcoins typically complete their primary selling phase before Bitcoin’s collapse.
Recent example: Fartcoin had already fallen 88% from its peak by late February, before Bitcoin’s collapse. Since this pattern holds, we can use it as a trading signal when seeking market exhaustion signals (bottom signs).
When Bitcoin is still experiencing significant volatility and seeking a new equilibrium, the strongest altcoins will first exhibit relative signs of exhaustion.
In simple terms, when Bitcoin enters the late stages of imbalance, one should seek out quality alternative coins to establish a balanced position.
As participants, our goal is to capture these divergence phenomena.
“Has market momentum shifted?”
“Is volatility narrowing?”
“Is the pace of selling slowing?”
“Can Bitcoin hold steady even as it hits new lows?”
Second-quarter bottoming signals:
Weakening momentum (e.g., Fartcoin)
SFP, deviation (e.g., Hype, Sui blockchain)
Higher lows vs. Bitcoin's lower points (e.g., Pepe coin)Altcoins typically decline first, but their downtrend slows once Bitcoin hits bottom.
The key to identifying high-quality altcoins lies here.
The weak remain weak.
The strong quietly position themselves, acting before the market trend begins.
b) Bitcoin vs. S&P 500
Let’s do a small exercise now.
By integrating all the concepts in this article, the following phenomena may become more understandable:
Summer 2023: Bitcoin peaks before the S&P 500 and completes its bottoming process earlier
Summer 2024: Bitcoin peaks before the S&P 500 and absorbs the S&P's sharp decline caused by macroeconomic factors at the lower end of the range
Year-to-date 2025: Bitcoin peaks before the S&P 500 and withstands the S&P's 20% sharp decline at the lower end of the rangeCore conclusion
Market bottoming is a process, not an instantaneous event: altcoins lead the way → Bitcoin follows → S&P lags behind
