Bitcoin fell briefly below $65,000 on Monday following US President Donald Trump’s proposal to increase global tariffs to 15%.
Alongside tariff-driven uncertainty, data suggest that the asset is currently trading in a phase with maximum psychological damage to traders.
BTC Enters “Psychological Torture” Phase
The asset is now in Stage 4 of the cycle, following a sequence driven by liquidity dynamics, leverage positioning, and recurring patterns in investor psychology, according to the analysis by Doctor Profit. The analyst stated that Stage 1 unfolded during Bitcoin’s rally between $115,000 and $125,000, a period which witnessed euphoric sentiment, extreme buying appetite, aggressive leverage, and widespread belief that downside risk had disappeared.
This phase typically ends with sideways consolidation at high levels or brief upside spikes and masks underlying market fragility. Stage 2 began when Bitcoin broke below the psychologically critical $100,000 level, triggering stress among short-term investors and leveraged traders. The move was described as fast and deliberate, designed to limit reaction time. The sharp October 10 crash was cited as a defining example that produced the largest liquidation event in crypto history within hours.
Stage 3 followed as the fastest and most severe phase, which confirmed the bear market through an extreme drawdown of 38% from the all-time high. Doctor Profit described this stage as the most brutal, which saw panic and depression, as investors were unable to hedge or de-risk in time.
During this period, BTC lost 50% of its market cap as a result of the rapid “mechanical repricing.” The analyst now places the market in Stage 4, a long sideways period defined by low volatility but high psychological stress. This phase is described as exhausting rather than violent, and price is expected to move within a defined range that allows market makers to generate liquidity on both sides while gradually wearing down participants.
Doctor Profit characterized Stage 4 as a weak-hands selling zone, where frustration, regret, and anxiety dominate, and where most short-term holder capitulation occurs as retail investors exit at a loss after missing earlier selling opportunities. He further explained that a breakdown into Stage 5, the full capitulation phase, is more likely to occur in a few months rather than imminently, while short-term bounces within the $57,000-$60,000 range remain possible.
Capitulation Before Recovery
Stage 5 is projected as the most emotional phase, and is often associated with systemic stress or black swan events. Revised downside targets are now between $35,000 and $45,000 amid broader macro and liquidity concerns.
The final Stage 6 would involve stabilization and structural reversal, as selling pressure fades and large players accumulate while retail investors anticipate even lower prices. Doctor Profit concluded that while the fastest downside may be over, the most damaging psychological phase has begun, which is consistent with patterns observed across previous Bitcoin cycles.
The post The Fastest Bitcoin (BTC) Crash Is Over, But the Worst Is Yet to Come appeared first on CryptoPotato.
