Analyst who accurately predicted 2021 crypto collapse warns of a ‘larger washout’

Bitcoin has dropped below $90,000 for the first time since November 2024, triggering fresh concerns among traders.

As of Feb. 25, Bitcoin is trading at approximately $89,333, down 10% in the last 24 hours. The total crypto market cap has also fallen sharply, with major coins like Ethereum and Solana following Bitcoin’s downward trend.

Pseudonymous crypto analyst Dave the Wave, known for predicting Bitcoin’s past cycles, said this drop was expected.

“BTC is back in the 80s. Why is this not panic stations? Because it was predictable on the TA,” he wrote on X. He believes Bitcoin is currently testing key support levels and is still waiting for a "larger washout" before finding a true bottom.

The 2021 crypto collapse was triggered by a combination of factors, including China's crackdown on Bitcoin mining, Elon Musk’s reversal on Tesla accepting Bitcoin payments, and regulatory concerns from the U.S. and other major economies.

Bitcoin fell from its all-time high of $69,000 in November 2021 to around $30,000 by mid-2022, wiping out over $1 trillion from the market. The crash also led to mass liquidations, exchange insolvencies, and the collapse of major projects like Terra’s UST and LUNA in 2022.

Dave the Wave uses technical analysis (TA) to predict Bitcoin’s price movements. His analysis relies on patterns like the Logarithmic Growth Channel (LGC) and Moving Average Convergence Divergence (MACD).

LGC is a tool used to track Bitcoin’s long-term price trends. It helps identify when Bitcoin is undervalued or overvalued. MACD is a momentum indicator that tracks price trends. If the MACD dips to the zero line, it often signals a market reset before the next move.

Dave the Wave believes Bitcoin is following historical price cycles, where a dip into the lower Fibonacci levels could set up the next major price rally. He has suggested that Bitcoin could drop to the $80,000 range before recovering.

Traders watching for a rebound

Despite the drop, some traders remain optimistic.

Analyst CrediBULL Crypto pointed out that Bitcoin is still in a consolidation phase. “Don’t need to rush into things here—we should have some days to position if/when we are ready for a reversal.”

The crypto market is deep in the red. Several factors are driving the sell-off, including risk-off sentiment in traditional markets and the outsized influence of memecoin trading.