Flash crash...now what?
Breaking down what really happened — and what’s next.
👋 Hi, Alex here,
Today we have some interesting topics to discuss:
1️⃣ Brief summary of the flash crash
2️⃣ Possible scenarios: best-case, worst-case, most likely
3️⃣ Opportunities & Risks
Let’s get started!
1️⃣ Brief summary of the flash crash
Many people were liquidated on Friday evening, but many others made a tremendous amount of money.“What caused this drop?” has been a popular question these days, but I believe it’s healthier to answer these questions instead:
1→ What have we learned from this drop?
2→What will follow after this drop?
1.First of all, if we had proper risk management, this dump would undoubtedly have been an opportunity. Just think about someone who invested in spot and couldn’t be liquidated but also took profits before the crash or at least had liquidity ready all the time. Although it sounds unrealistic, this is what every investor should do. What whale have you seen that doesn’t have strict risk management? What whale have you seen that doesn’t have continuous liquidity and isn’t 99% invested in the market?!
So, this should be the norm—simple but hard to follow. If you truly want to succeed in investing, you must respect these two points:
• Risk management • Continuous liquidity
And when I say continuous liquidity, I mean that you, as an individual, must have “safe” money, as I like to call it, coming in every month. Whether it’s from your own income or from taking profits from investments. And yes, you shouldn’t reinvest everything back into the market at every minor -5% dip. This brings us to another key point in an investing or trading career:
• The plan
The plan plays an important role, just like the two points mentioned above. As long as you have a plan and have studied it thoroughly, whether you make a mistake or not, you will study it again, identify the error, and have a good chance of not repeating it in the future. A mistake is not something to fear but something you want to encounter quickly, study, and learn from, especially at the beginning of your journey and beyond.
2.“What will follow after this drop?”
I remain bullish, and I’ll explain why below by analyzing some charts
However, this liquidation came as a total reset, and for me, it hasn’t changed anything yet
Even though there are many theories like “it needs to fill part of the wick to start the pump” or “after such a flas crash, there must be a spectacular recovery,” I’ve learned that it’s never good to position ourselves at extremes. We should always remain humble and not dive headfirst into something. In fact, I like to prepare scenarios for both pumps and dumps, and in the end, based on technical analysis, I choose the one with the highest probability.
2️⃣Possible scenarios: best-case, worst-case, most likely
All right, its time to dive deeper into this analysis
Bitcoin chart on a 1-day timeframe
1. Let’s start with the structure: it’s clearly visible that we still remain in a bullish structure.The wick represents only a liquidity grab, and we won’t consider it a market structure shift.
2. Patterns.Currently, we have a pattern forming called “megaphone,” which has a higher probability of trend continuation when it’s near a key level.Our key level is the previous bearish flag.Additionally, even though we had an extremely large wick, we have a body close above the support zone, as I noted in the image. This represents buying strength, which wasn’t present at the resistance in the upper part.
So, as long as we hold the demand zone, I’ll remain bullish—simple as that.
3️⃣. Opportunities & Risks
Altcoins will outperform Bitcoin in the coming period, and this is no surprise
So, I’ll show you a few charts to keep an eye on, as well as how I managed this dump and what I plan to do moving forward