Alliance DAO’s QwQiao Warns Next Crypto Bear Market Could Be Worse

Alliance DAO co-founder QwQiao has reignited debate across the crypto community. After repeating a warning he first shared in September. The next major market downturn could hit far harder than most investors expect. His latest comments, posted early on November 21, echo growing concerns from industry leaders about excessive leverage. With unrealistic optimism and the surge of inexperienced capital entering the space.

QwQiao Says “Dumb Money” May Fuel a Deeper Crash

In his post, QwQiao argued that a large cohort of inexperienced investors. Which he bluntly called “dumb money”, is now buying spot assets and crypto ETFs without understanding the risks. He warned that this setup often ends badly and suggested the market might need a 50% drawdown. Before it can reset and begin another strong cycle.

He did not predict when the downturn would begin. However, he emphasized that structural weaknesses are already visible. Especially after several months of heavy ETF inflows followed by accelerating outflows from major products like BlackRock’s IBIT. His tone struck many as unusually direct. But he doubled down when questioned. QwQiao is stating that the conditions for a painful capitulation phase are slowly forming.

Chris Burniske Says DAT Selling Has Only Just Started

Supporting QwQiao’s cautious outlook, Placeholder partner Chris Burniske added his own warning. He believes the “DAT era” of forced selling has only begun. DATs, Decentralized Autonomous Tokens tied to creator or attention-based economies, have surged this year. Burniske argues that their rapid rise will likely reverse in the same dramatic fashion.

He also noted that broader market signals look weak. Burniske previously stated that the “Friday massacre” in mid-October broke market momentum. That Bitcoin and Ethereum are still trading in elevated ranges that leave room for deeper corrections. His comments sparked further discussion, with analysts pointing to the rising liquidation risk among ETF holders. It overstretched leverage across perpetual futures markets.

Community Reaction Splits Between Caution and Optimism

The replies to QwQiao’s post showed a familiar divide. Some investors agreed that inexperienced newcomers often sell in panic once volatility picks up. Others pushed back, saying that calling people “dumb money” ignores the natural evolution of a maturing market.

A few users joked about catalysts. While others suggested that high-quality assets now hold a larger share of total market capital compared to previous cycles. Some also argued that DATs bring attention and fresh liquidity, especially to chains like Solana. Despite the mixed reactions, many acknowledged that the combination of ETF outflows. The macro uncertainty and fading retail euphoria could set the stage for a harsher correction.

A Broader Warning for the Cycle

QwQiao, known for early cycle calls and his work mentoring startups at Alliance DAO. He has increasingly flagged risks tied to overheated sentiment. His recent comments fit into a larger narrative shared by several experienced investors. This bull cycle is different, and the next bear phase may behave differently as well. Currently, the market remains on edge. Both warnings highlight a growing belief that before crypto can resume a long-term “supercycle.” It may first need to flush out excess leverage and retail speculation. Something the community may not be fully prepared for.