Would you give up a subsequent 500% opportunity for a 5% pullback? On May 19, Bitcoin surged to $109,600 but quickly fell, triggering the liquidation of $800 million in long positions and causing sentiment to plummet from 'euphoria' to 'freezing point'. But is this really the top? Or is it a long-planned 'cleaning' preparing for the next main upward wave?
1. A surge followed by a decline does not equal the end of the market; is it a bait or a washout?
Let's first look at the two core inducements of this major pullback:
Technical signals are weak: When Bitcoin challenged $109,600, the volume-price divergence was obvious, and the MACD showed a death cross at a high level, typical of a 'bait and washout' structure. Short-term technical indicators are overheated, making high-level oscillations easy to trigger.
Fundamental expectations have been fulfilled + profit-taking pressure has been released: This round of rebound has accumulated a rise of over 45% from the low point, and the 'tariff war' benefits that previously boosted the market are gradually being realized, naturally leading to profit-taking behaviors.
But the key issue is: Is this really a signal for the end of the market? Or just a small ripple in a 'healthy adjustment'?
2. Is a supply crisis brewing, with the main upward wave approaching further?
We look at the further logic from the changes in supply and demand structure.
🔹 Continuous tightening on the supply side: From November 2024 to now, Bitcoin balances on major exchanges have plummeted from 2.44 million to 2.15 million, a reduction of 290,000 over six months. If this trend continues, it is expected that by early 2026, the supply of Bitcoin on centralized exchanges will drop below 1.5 million.
What does this mean? The 'circulating Bitcoin' in the market is drying up, and once the FOMO effect starts, it will inevitably lead to sharp price fluctuations.
🔹 The institutional 'golden eater' is taking shape: Since April 2025, 21 institutions have announced the inclusion of Bitcoin in their balance sheets, nearing the total from the first quarter. The most representative is Twenty One, jointly invested by Tether, Bitfinex, and SoftBank—this company quickly accumulated 42,000 Bitcoins through a reverse merger and plans to refinance $1.17 billion for further increases, a level of ambition that draws attention.
More importantly, this trend is spreading from Europe and America to Asia. For example, Indonesia's DigiAsia has announced plans to raise $100 million specifically for Bitcoin investments, indicating that this round of institutional layout is still in the 'early stages'.
Mlion.ai's AI research report system has already identified that 'whale-like buyers' similar to Twenty One are becoming increasingly active, and on-chain data shows abnormal behavior of concentrated buying. For ordinary investors, this is a golden window to 'eat meat' by following this trend.
3. The U.S. debt crisis is just the fuse; will the dollar give way to Bitcoin?
From a macro perspective, the forces of bulls and bears are quietly tilting.
The U.S. debt crisis catalyzes a new round of increases in risk assets: Moody's downgraded the U.S. sovereign rating, causing long-term bond yields to soar, and in June, the U.S. will face $6.5 trillion in 'borrowing new to pay old' pressure. Behind this is a deep impact on dollar credit.
The Federal Reserve is 'honestly' acting: Although it emphasizes balance sheet reduction, it quietly purchased $8.8 billion in long-term U.S. bonds on May 8, accumulating a total of $43.6 billion in a month. This type of 'reinvestment' behavior seems like a technical adjustment but actually releases a clear signal of 'stabilizing liquidity'.
During this period, assets sensitive to liquidity, such as Ethereum, altcoins, and the Russell 2000, have rebounded rapidly, and smart money has begun to position itself ahead of the next main upward wave.
Mlion.ai's liquidity analysis section has recently also signaled a trend of marginal recovery in funds, combined with cryptocurrency price structure analysis, indicating that the current oscillation is more like a 'capacity-building period' before the rise, rather than a market turning point.
4. The concession of dollar credit may lead Bitcoin to become a new 'anchor asset'?
Bloomberg data shows that the one-year dollar risk reversal indicator has fallen to -27 basis points, a new low since 2011. The market's bet on a significant devaluation of the dollar has become mainstream awareness. In this context, the political and business circles in the U.S. are beginning to promote Bitcoin as a strategic asset, with both the federal government and local state legislatures 'testing the waters'.
This trend is similar to Japan's 'yen for assets' operations in recent years. From 2020 to 2024, the yen depreciated by over 54%, but the Nikkei index surged by 140%, with both Japan's manufacturing and consumption recovering. If the dollar follows in the footsteps of the yen, Bitcoin will become a 'dual attribute' asset for risk aversion and value appreciation.
5. Operational advice: Getting off the train equates to missing out; volatility is the best opportunity to board.
Currently, although Bitcoin's technical pattern is oscillating at a high level, multiple factors such as supply-side tightening, accelerated institutional positions, marginal weakening of the dollar, and moderate liquidity recovery are overlapping, making the next main upward wave still highly explosive.
Advice for investors:
Before Bitcoin's main upward wave arrives, do not easily get off the train.
Use every decline to accumulate positions at low levels, pay attention to Mlion.ai's on-chain address monitoring and cryptocurrency price prediction functions to identify whale behavior and the movements of main funds.
In terms of altcoins, during the window of marginal liquidity improvement, stage a phased increase in leading cryptocurrencies to obtain beta returns.
Especially through Mlion.ai's AI strategy diagrams and cryptocurrency comparison tools, investors can effectively uncover 'golden buying points' in trend confirmations, avoiding blind chasing of highs or panic selling.
Disclaimer: The above content is for information sharing only and does not constitute any investment advice!
