Another drop in Bitcoin. It’s already familiar, isn’t it? As soon as people start believing in a 'new bull run', the market makes a sharp turn and throws everyone off the edge. And here we go again — down several thousand bucks in a short time, liquidations, panic, Twitter on fire. But the question remains: why does this happen and what to do next?

News, market makers, and greed

The first reaction to any drop is to look for a reason. Who is to blame? The Fed? The whale who dumped a billion? Or maybe a conspiracy of market makers?

The truth is that the market is psychology. And most movements are not just reactions to news, but reactions to people's expectations, their fears, and greed.

Imagine a crowd of people in a market, where everyone is shouting and pushing. Someone heard a rumor that the product will be cheaper tomorrow and started selling. Others got scared and also started dumping. As a result, the price really falls — not because the product became worse, but because everyone believed in this drop.

And now add algorithms that operate faster than any person. They do not read news, but they analyze its tone, see how sales volume is rising, and begin to amplify the movement. That’s it — the snowball effect begins.

"We’ll close the gap and go up" — why does everyone believe in this?

Gaps (price breaks) are one of the favorite topics among traders. There is a popular theory that price always returns to such zones. Why? Because market makers 'fill liquidity', and the market strives for balance.

But the problem is that this is not a law of nature. Gaps do not always close, especially if the market situation has changed. People have just gotten used to seeing such patterns and believe it will always be this way. And when it doesn’t happen, they get disappointed and lose money.

And if the market is managed by AI, then why does it react to news?

A logical question: if everything is decided by an algorithm, then it should not care about the news, right?

Not exactly. Algorithms are just code that analyzes data. They see that after news about regulation, sales volumes are rising — and they start selling too. This is not emotions but cold calculation: if the pattern has repeated 100 times, then in the 101st time it will be the same.

But what’s most interesting is that algorithms can manipulate the crowd just as well as live traders. They see where people place their stops, where they expect a reversal, and can move the price to where it is profitable for them. And then they sharply reverse it back, causing the crowd to panic.

What now? Is everything lost?

It depends on who you ask. If you entered at the highs, then there is likely panic now. If you were waiting for a pullback, congratulations, you have a chance to enter at a better price.

The question is: do you understand what is happening, or are you just reacting to the noise? Most people lose precisely because they act on emotions, not according to a plan.

In the end…

If you are an investor, focus on fundamental things, not on short-term noise.

If you are a trader, don’t try to guess whether the gap will close or not. Pay attention to liquidity, volumes, and how the crowd behaves.

If you don’t understand what to do, it’s better to do nothing.

The market is a game of nerves. Those who can keep their composure will ultimately come out as winners.