There is leverage from lending BTC for income, but if holders fear counterparty risk and instead pull their coins off exchanges that will only squeeze the shorts and drive the price higher, potentially much higher. I don't think anyone really knows how much short leverage is out there.
If they fear counterparty risk, they will cause a stampede and cause counterparty defaults.
The slowdown in buying from n00bs, can cause the price to drop, which will cause the enriched shorts to pile on (cash out their initial investment and gamble the profits) overshooting to the lower low bottom.
V bottom on steriods. Buy the bottom same as in 2009.
2008 crash only took gold to 88% or so of it's normal price for a month before it went right back up higher than before. Let's say people did go all in on cash in hopes that would be the best move. You would have to be absolutely insane to have all of your wealth in the form of digital fiat in a bank when the crash occurs. There will be bank holidays, maybe you'll get Cyprused right on the spot. You would have to hold entirely physical cash. How do you "buy the dip" of anything with physical cash??? You have to go stuff your physical cash into a bank account afterwards to get on an exchange and then get Cyprused in the process!
What are you going to do? Walk around with a briefcase of physical cash shopping around for whatever bank is left standing? Probably all of them will implode anyway from cascading deflationary collapse of fractional reserve fiat. I don't understand the logistics of your plan here heh. Your plan seems to involve shoveling lots of fiat notes into a bank account on the eve of the greatest financial catastrophe in history...