Let me start with a few signs I observed over the weekend, which I feel should be some kind of signal:
1. During the process of BTC's price declining from 97500 to 95000, there was no significant accumulation of bearish liquidity above the price, indicating that the price decline was not caused by futures shorts, but rather due to continuous supply in the spot market, which caused the spot premium index to continuously decline during this process;
2. There has been no significant increase in bullish liquidity nearby...
But don't forget the large amount of bullish liquidity mentioned in the quote that appeared when the price broke through 95500 last week. Curiously, the liquidation position of this batch of bullish liquidity appeared at 76000...
After this batch of bullish liquidity appeared, within less than 24 hours, the price of BTC has stagnated below 98000, especially when it could have continued to rise, but inexplicably stopped...
My guess is that this batch of newly added bullish liquidity was meant to capitalize on the liquidation above 98000, but unfortunately the amount of capital is quite large, leading to the funds that originally pushed the price up being reluctant to lift the burden...
The key is that the leverage of this batch of funds is relatively low, only 5x, and it can't be completely liquidated in the short term...
That's why the price is in a state of stagnation, to put it bluntly, it's like a big fat guy suddenly jumped onto the car, the driver is a bit unhappy, but it's awkward to kick him off, so he decides to find some bumpy roads to shake it up!
This is how the current fluctuating market came about;
3. The short-term bullish positions opened at 94500~95000 have already been liquidated, and further down is a significant liquidity gap. Therefore, if the price wants to continue to pull back to 93000 now, it needs some rebound fluctuations to allow the bulls to fill this liquidity gap.
So the focus during the day on Monday is whether this gap can be filled. If the bulls successfully hook in, then the price testing 93000 from Monday to Tuesday will be very easy!
Summary: As speculated in the quote, the reason the price did not continue to liquidate when it touched near 98000 is likely due to a lack of bearish liquidity, with a large number of shorts running away on the way up, while at the same time, there are large low-leverage bulls going long, causing the upward momentum to slow down significantly;
If the bears still dare not open positions next, while the bulls confidently try to bottom fish, then this rebound that has lasted for 3 weeks may come to a complete end. In the next week or two, we may face a pullback to 83000 or an extreme pullback to 76000 (that's right, regarding that batch of 5x long positions!);
In short, the reflexivity of the futures market is still dominating price behavior. The more people are bullish about reaching above 100k, the harder it is to reach 100k. The more people are bearish, the harder it is for the price to pull back. This is a prisoner’s dilemma on the emotional front, and there is not much we can quantify at present...
Therefore, I can only watch for short-term pullbacks followed by fluctuations, rather than anticipate a complete reversal of the bearish trend... After all, it is too early!
