Up 22% in one week, with $2.7 billion in short positions liquidated, but Lucy Gazmararian says: There’s still one final shakeout, followed by another 20% drop.

She’s the founder of Token Bay Capital. She says the market was previously heavily leveraged on the short side, and those shorts have now been wiped out. But based on historical cycles, there is usually one final drop before a bear market ends, typically around 20%. Do the math: if 76943 drops another 20%, it would land around 61500. In other words, this week’s rally may have been for nothing and could still be fully retraced.

Her exact words were: "Stick to the logic of long-term investing. Bitcoin is a bet against currency depreciation." It sounds nice, but the subtext is: Don’t make short-term moves. This is still a highly volatile playground, with plenty of tools for betting in both directions. Retail investors who jump in are simply offering themselves up as exit liquidity.

The core driver of this rally is actually intervention by the U.S. Treasury in the bond market. Long-term Treasury yields were pushed down, and risk assets broadly recovered. But this is not an improvement in crypto fundamentals; it is simply a temporary easing in the macro environment. The CLARITY Act is still being pushed, but the chances of it passing are "relatively slim." If the bill fails, the momentum behind this rally could disappear.

And look at the data: Bitcoin’s high this January was 94820, while last October’s all-time high was 126198. At 76943 now, it has not even returned to this year’s high, let alone reached a new all-time high. A 22% weekly gain looks shocking, but in the context of the larger cycle, it may simply be a rebound.

The crypto market has an old saying: When most people think the bull market is back, the market is actually still in a bear market. When most people lose hope and sell at a loss, the bull market quietly begins. Now that the shorts have been bloodily wiped out and market sentiment is soaring, Lucy says there is still one final drop. Do you believe her, or the candlestick chart?