Investing Updates: Can ChatGPT really predict the next crypto market crash?

Source:

https://cointelegraph.com/news/can-chatgpt-really-predict-the-next-crypto-market-crash?utm_source=rss_feed&utm_medium=rss&utm_campaign=rss_partner_inbound

ChatGPT:

ChatGPT cannot predict crypto market crashes with precise timing but excels at identifying early warning signs. By combining on-chain, derivatives, and sentiment data, it can reveal risk clusters before a breakdown occurs. During the October 2025 tariff-induced crash that erased over $19 billion in leveraged positions, Bitcoin plunged from $126,000 to $104,000. Although ChatGPT could not foresee the exact event, it could have detected warning indicators like record leverage, negative funding rates, and extreme sentiment swings.

The article outlines a six-step workflow for using ChatGPT as a risk detection tool: (1) collecting real-time market, on-chain, and textual data; (2) cleaning and labeling it; (3) synthesizing it into structured summaries; (4) assigning risk levels; (5) verifying outputs with trusted data sources; and (6) refining signals after volatility events. This structured process turns scattered information into a daily risk map.

ChatGPT’s key strengths include synthesizing massive data, detecting shifts in crowd psychology, and recognizing complex stress patterns—such as high leverage plus negative sentiment plus thinning liquidity. However, it remains probabilistic, not predictive: its insights depend on timely, accurate data and cannot anticipate unprecedented macro shocks or exchange microstructure failures.

Had this AI-driven workflow been running before the October crash, it likely would have raised its risk level to “Alert” due to excessive leverage, rising volatility, and worsening sentiment. Still, the model would not have predicted the exact crash date. Ultimately, ChatGPT serves as an advanced “risk radar,” enhancing trader awareness and discipline—but not as a crystal ball for market timing.