Current situation
Bitcoin just recorded a surprising slowdown from around $111,800 to nearly $107,000 in less than 30 minutes – a widespread long liquidation “flush”. This is not just normal shaking, but could be the first signal of a deeper correction.
Signs of starting a downtrend
1. High leverage liquidation: Total OI (Open Interest) in the entire market reached a record high – exceeding $80 billion, demonstrating that a large amount of long positions are being 'stuck'. This is bait for sharks to 'kill longs' to gather stocks from lower levels.
2. Breaking the technical pattern: BTC just broke down from a rising wedge pattern – which typically signals a short-term trend reversal if it does not recover quickly above $110K.
3. Volume decreases as price rises: In the recent upward movement, trading volume did not align – a sign of weakness in real buying power.
4. Market sentiment is overly enthusiastic: The Greed Index is at a high level (72), a warning zone for sudden sell-offs.
Advice for investors
• If holding Long: Consider taking some profits or raising SL close to the $107,000 area. Do not average down without clear signs of a bottom formation.
• If on the sidelines: Patiently observe reactions around the $106,000–$107,000 range. If it breaks $106K with large volume, the downtrend could pull back to $102K–$100K.
• Do not FOMO buy back at this time: The recent drop may not be over. Wait for a solid recovery confirmation above $110K with strong volume to consider buying back.
Short-term trading scenario
• Priority strategy: Short when BTC rebounds to the $110,000–$111,000 range without breaking through.
• Support to watch: $107,000 – if broken, the short-term target could be $102,500–$100,000.
• Rebound scenario: A strong recovery above $111,000 with large liquidity will negate the current downtrend.
Conclusion
The drop from $111K to $107K is an early warning that the market is overleveraged. In the short term, investors should shift from a 'top-chasing' mindset to a defensive mindset, waiting for confirmation signals before acting. Maintain discipline, do not let emotions dictate trades.