The reasons for the sudden collapse and sharp decline of the Inscription Dragon II SATS are numerous, and insiders speculate that the main reasons are as follows:
1. Upgrade Leads to Damage to Consensus Foundation: Unisat announced a Brc20 upgrade, which may have undermined the consensus foundation of inscriptions, causing what was originally a decentralized protocol to be dominated by a few individuals, leading to a loss of confidence among investors and triggering a sell-off that resulted in the price collapse.
2. Manipulation by Whales: Some analyses suggest that SATS may be a cryptocurrency highly controlled by whales. On March 26, 2025, from 0:00 to 2:00 AM, while retail investors rushed in to chase the price, whales took the opportunity to sell off, leading to a double kill in both long and short positions. This manipulation by whales destabilizes the market and exacerbates significant price fluctuations.
3. Impact of Overall Market Trends: The cryptocurrency market is highly volatile overall, and in January 2024, many digital assets experienced significant declines, including SATS. At that time, the market was filled with a “sell-off news” sentiment, causing investors to panic or follow the trend to sell, leading to a downward price movement. Furthermore, SATS is closely related to Bitcoin's price trends; fluctuations in Bitcoin's price can have a significant impact on SATS. When the Bitcoin market performs poorly, SATS's price will also fall accordingly.
4. Technical Indicators Emit Negative Signals: From a technical perspective, SATS's price showed a bearish divergence signal where the price was rising while the Relative Strength Index (RSI) was falling, suggesting that a price reversal to the downside might be imminent. Some technical analysis investors may sell based on these signals, accelerating the price decline.
