The early session has started to plummet again, with increasing downward momentum on the 15-minute line. I do not recommend trying to catch the bottom. If you listened to me a few days ago about shorting Bitcoin around 110,000, you might be in for a big wave.

Why is it dropping? First, the favorable conditions have almost all been fulfilled, with only one major line remaining unfulfilled: interest rate cuts. However, it seems that at least three more months are needed for that to happen. Second, the bullish sentiment has risen, and it’s clear that many newcomers in the market are starting to FOMO crazily, thinking that a bull market has already arrived, and time will give you answers, suggesting that it will only be a perpetual bull market, like U.S. stocks and gold.

Let me briefly refute that. First of all, the bull market has already come once, from last September to this January, Bitcoin rose from a low of 50,000 to 110,000, which was a significant upward step, driven primarily by interest rate cuts. Last year, the first cut was a direct 50 basis points, followed by another cut of 25 basis points the next month. But what about now? There are no interest rate cuts, and the market’s rise is purely driven by institutions’ early positioning plus the plundering of short liquidity. As bullish sentiment warms up and shorts decrease, the main players will definitely turn downwards to seize liquidity below. For those FOMO-ing into buying, pay close attention to the important psychological resistance level at 100,000. If this level is confirmed to break down, it will directly look down to 94,000 and 85,000.

Secondly, why do I not believe Bitcoin will be in a perpetual bull market? Because Bitcoin is aimed at a high-leverage, high-risk, low-regulation cryptocurrency market. The main players can not only go long but also short. The nature of this industry dictates that Bitcoin will be highly volatile, and Wall Street giants will surely act according to the situation, going where the liquidity is, unlike gold which has a consensus among everyone, and central banks continuously increase their holdings. Therefore, the most important points when playing with Bitcoin are two: do not use too high leverage, below ten times leverage is sufficient; and also, be smart. When the price rises and everyone frantically seizes short liquidity, you should secretly fill in those liquidated short positions. Try not to chase highs and lows, and be smart about it.

In summary, I still believe that Bitcoin will experience a significant drop below 100,000. Where exactly it will go still needs to be seen, but during the process of Bitcoin fluctuating around 100,000, altcoins will definitely drop first, as Wall Street giants hardly buy altcoins, let alone support them.