The main threat to bitcoin lies not in a market crash. Far more dangerous is ordinary boredom and a prolonged sideways move. Such stagnation slowly kills investors' faith in the asset's further growth. This opinion was shared by Ki Young Ju, founder of the analytics platform CryptoQuant.

According to him, the industry will weather a sharp drawdown without much trouble. However, for this it is important to preserve faith in the next wave of growth. On the contrary, prolonged stagnation gradually destroys the very story on which demand rests.

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The danger of a prolonged sideways move

The analyst's logic is built around the STRC structure (Strategy's perpetual preferred shares). It is precisely through it that Michael Saylor, founder of Strategy — the largest BTC investor among public companies — finances cryptocurrency purchases. In the expert's opinion, the construction will become vulnerable during certain periods. The danger arises not when the price simply falls. The biggest problems begin during a prolonged freezing of the price in a narrow range.

Of course, a sharp drawdown in the price can be survived. The market copes with this as long as faith in a move upward is maintained. Prolonged stagnation, on the contrary, literally destroys the main narrative. As a result, buying demand weakens. In addition, the company's share premium compresses. The process makes Saylor's capital-acquisition machine less stable. Ultimately, the entrepreneur's real task looks different. He needs to do more than just buy up coins. It is important to give the market a fundamentally new reason to believe in the asset.

Narratives hold the power

Over ten years of work in the industry, Ju has drawn an important conclusion. The essence of the leading cryptocurrencies barely changes. Only the story around it is transformed. It is precisely these narratives that explain why the price should rise.

Source: BeInCrypto