Indicators show prices are 'overheated'; similar to catching a breath during a long run, a 20%-30% drop in the short term is considered a normal adjustment. There are too many people borrowing money to trade coins in the futures market, and a collective liquidation could trigger a flash crash at any moment.
On the day it surged to 110,000, over 30,000 Bitcoins worth more than 20 billion suddenly appeared on the exchange, clearly indicating large holders were unloading. Historically, there is a 68% probability of a correction at this level; if it can't hold, initially look at 103,000 support, and if broken, it may drop to 96,000.
Three solid reasons for a bullish outlook in the medium to long term.
Large institutions are still buying. Wall Street funds invested another 20 billion in Bitcoin last week, with BlackRock hoarding 300,000 Bitcoins worth 200 billion. They continue to issue bonds to buy coins, with their costs around 100,000. If it drops to this level, there will be strong support.
Old players are holding on without selling; 76% of Bitcoins have not moved for at least a year, far from the stage where retail investors were frantically selling during the peak of the previous bull market.
If global easing expectations cool inflation in June, the Fed may cut rates in September, making money less valuable, leading people to prefer buying Bitcoin as a hedge against inflation.
Three possible futures.
Probability of a 25% drop: sudden fund withdrawals + US stock market crash ➔ could drop to 90,000.
Probability of a 55% fluctuation: dull news + large holders not dumping ➔ will fluctuate between 100,000 and 115,000.
Probability of continuing to soar by 20%: if a country announces it is buying coins + Ethereum ETF gets approved ➔ surges to 150,000.
Short-term traders.:
Sell 30% to secure profits, set a stop-loss at 108,000.
If it drops to 96,000 and trading volume decreases, it can be bought back.Long-term players.:
Hold 60% of the base position, take out some money to buy insurance against dropping below 90,000.
If it drops to 87,000, consider adding positions in batches.Wealthy institutions.:
Use futures to hedge risks, while keeping an eye on arbitrage opportunities in Bitcoin-related stocks.
This wave of correction is like drinking water during a marathon; after resting, you will continue to run. Don't be scared away by short-term fluctuations, focus on the key points.
Can it hold above 105,000 for three consecutive days? Whether the Fed really cuts interest rates in September, keep 30% cash to guard against unexpected events.
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