The recent crash in the crypto market on “519”—I’ve been wondering what it really indicates.

First, a quick detour. This year’s Bitcoin Pizza Day is back. Many newcomers may not know how this holiday came about. It’s actually simple: in May 2010, an engineer exchanged 10,000 bitcoins for two pizzas. Back then, nobody knew that this thing was valuable. Looking back now, it’s equivalent to spending 2.6 billion RMB on a meal. To commemorate that moment, every year May 21 or 22 has become a holiday for Bitcoin enthusiasts. So during this weekend’s 519 in the crypto world, pizza shops around the globe have to work overtime.

Back to the main topic. From 312 last year to now, Bitcoin has risen from 3,800 to 65,000—up 17 times—with almost no decent shakeout in between. What does that mean? Basically, almost everyone is in profit, including investors who have been holding since the bottom. This crash looks like it’s wiping out leverage, but in reality, it’s liquidating those early holders who are forced out by stop-losses.

This is crucial. Once these people finish selling, there will be fewer and fewer chips left to keep pushing the market down. The cost basis for new investors is all above 30,000. They won’t consider selling until it reaches 50,000. And that doesn’t even include the chips locked in by institutions. So from a supply-and-demand perspective, future demand will far exceed supply. That’s why I believe that after this washout on 519, Bitcoin will restart its upward move.

Of course, the prerequisite is that the broader backdrop of inflation doesn’t change. Kaplan of the Federal Reserve said inflation will rise this year, and balance sheet reduction will most likely not happen until 2022—so the easing environment is still in place this year. This is a necessary condition for Bitcoin to keep its bull run.

But regulatory risk is definitely heating up. The Federal Reserve will release a digital currency report, the SEC chair is asking for tighter regulation of exchanges, and the U.S. Treasury requires reports on crypto assets over 10,000. In China, CCTV and Securities Times are also talking about risks. These moves can be intimidating, but I think such reminders are necessary. This market is too volatile for amateur investors to casually play with. You must learn asset allocation—don’t put all your money in.

On the other hand, institutions are continuing to step in. The founder of KKR said they invested in cryptocurrencies; the firm manages more than 1 trillion in assets. Suncres, a California community bank, wants to provide Bitcoin services to customers. Futu Holdings also plans to roll out crypto trading. Goldman Sachs CEO predicts the market cap of cryptocurrencies will ultimately surpass gold. Big names like Musk and Wood are still buying. Teucrium Trading has already filed a Bitcoin futures ETF application with the SEC. All of these are bullish signals.

From a technical perspective, there’s an interesting similarity between the two crashes on 312 and 519. On 312, Bitcoin bounced from 3,800 to 5,600—an increase of 47%. On 519, it bounced from 29,000 to 42,400—also a 47% increase. Following this logic, the short-term rebound may already be over. Next, the market will likely keep consolidating within this box, and then start a second dip. I expect the second dip range to be between 32,000 and 35,000. When that happens, don’t panic—this is the opportunity to “pull the cart.”

Right now, the Fear and Greed Index is 19, in an extreme fear zone, where opportunities outweigh risks. Grayscale’s GBTC is trading at a 10.6% discount. Funds in the U.S. stock secondary market have shown some signs of warming up—this is a good signal. But during the night, another 10,000 bitcoins were transferred into exchanges, which suggests panic hasn’t fully played out yet. A second dip could start at any time.

A few days ago, the Ethereum Foundation transferred out 35,000 ETH to exchanges, which could shake investors’ conviction in holding. The last time that address sold coins was at the 2017 bull market peak, cashing out 70,000 ETH. So in the short term, ETH may trade in sync with the broader market, waiting for the chance to buy into the second dip.

Let’s quickly scan other coins. DOT saw strong dip-buying recently—holding positions is recommended, expecting a rise. XRP pulled back today with low volume, mainly tracking the overall market. LINK has dip-buying capital coming in, so you can hold a bit. BCH is relatively strong and has room to keep rebounding. LTC doesn’t look promising—mainly expect it to track the market. BSV has entered an oversold zone and is waiting for a rebound. ADA’s pattern hasn’t broken; it’s consolidating at high levels. XMR has rebounded sharply; 340 is a resistance level that may be hard to break through in one go. ETC has a large amount of trapped liquidity overhead, with 100 being a major resistance level—short-term, a rebound is expected. DOGE—Musk is still “watering” it, but there’s a wall of criticism under Twitter, and his influence is fading. Dogecoin has a lot of trapped positions, so it’s hard to save with a rebound; focus on reducing positions, with resistance at 0.5. SUSHI, after 519, is still consolidating in its trading range box; the capital support is very strong, and in the future it may help lead the DEX sector to rebound first. AAVE’s pattern hasn’t turned bad—hold is the main strategy.

In summary, the 42,400 high level is unlikely to be exceeded in the short term. Once it does break upward, the next resistance level will be 45,000. My suggestion is to stay below 40,000—only buy, don’t sell. Don’t miss the future by losing out over small setbacks. This 519 washout in the crypto market is, in essence, about clearing chips and preparing for the next round of upside.