Market shows a 'deep V' script, Bitcoin performs a textbook-level washout

In the past three days, the crypto market has experienced a thrilling 'roller coaster'行情. Bitcoin suddenly plummeted from a high of $118K, breaking through the key support at $110K, with over 110,000 investors liquidated within 24 hours, causing losses of over $369 million across the network. However, as market panic spread, Bitcoin stabilized around $112K and then violently surged above $115K, driving a collective rebound in altcoins. Behind this 'deep V' trend, is it a signal for the bull market's restart or a trap carefully designed by the main force?

Optimistic faction: $114K is the new starting point for the bull market

  1. Technical analysis shows a 'golden pit': Bitcoin has formed a 'double bottom' structure in the $110K-$112K range, with the 4-hour RSI indicator rebounding near 30, and the MACD histogram turning positive, indicating that bullish momentum is accumulating. More importantly, $112K is precisely the 'demand zone' at the weekly level, which has historically been the end point of bull market pullbacks.

  2. Institutions accelerate coin hoarding: On-chain data shows that 'whale' addresses holding 10-10,000 BTC have increased their holdings by 83,000 BTC in the past 30 days against the trend, and exchange balances have dropped to 2.44 million BTC (a six-year low), highlighting the main capital's reluctance to sell. Meanwhile, a Mexican hotel giant has invested $500 million to hoard coins, and Japan's Metaplanet has exceeded 2,200 BTC in holdings, showing no change in the trend of traditional industries entering the market.

  3. Macro environment favorable: U.S. July non-farm data was a shocker (only 73,000 new jobs added), and the probability of the Federal Reserve cutting rates in September soared to 80%, putting pressure on the dollar index and favoring risk assets. Additionally, Hong Kong's (stablecoin regulations) were officially implemented, and compliant stablecoins could attract over $20 billion in institutional capital inflow, providing long-term liquidity support for the market.

Cautious faction: Beware of the 'false breakout' trap

  1. Altcoins lack follow-through: Despite Bitcoin's rebound, mainstream altcoins like Ethereum and SOL are performing weakly. Ethereum is oscillating around $3,500, with nearly 560,000 ETH queued to exit the PoS network due to the staking unlock wave, with an average waiting time exceeding 9 days, and selling pressure remains.

  2. Main force 'enticing' suspicion: Market observers point out that during this round of rebound, individual investor sentiment quickly shifted from 'panic' to 'exuberance', while whale addresses took the opportunity to reduce holdings. For example, BitMEX founder Arthur Hayes recently sold 2,373 ETH, cashing out over $8 million. If retail investors blindly chase highs, a 'bag holder' scenario may repeat.

  3. Key resistance level not broken: Bitcoin's current price is still constrained by $114,200. If it cannot stabilize above $115,500, it may retest the $112K support. Additionally, August 8-9 is an important time window; if it breaks below $112K, it may trigger a cascading drop to $108K-110K.

How should retail investors respond?

  1. Short-term strategy:

    • Bullish: If Bitcoin stabilizes above $114,200, small positions can be taken on the long side, with a stop-loss set at $113,000, targeting $116,500.

    • Bearish: If it breaks below $113,000, short positions can be taken, with a stop-loss set at $115,600, targeting $111,500.

  2. Long-term strategy:

    • Dollar-cost averaging: If Bitcoin pulls back below $112,000, positions can be built in batches, targeting $145,665.

    • Hedging: Reserve 30% cash to guard against black swan events, such as Federal Reserve policy reversals or escalations in geopolitical conflicts.

The market always rises in 'doubt' and peaks in 'frenzy'

In the current market, investors need to maintain a clear mind: do not be blindly optimistic due to short-term rebounds, nor panic and cut losses due to pullbacks. Remember, the characteristic of a bull market is 'slow rise, sharp fall', while that of a bear market is 'sharp rise, slow fall'. Whether Bitcoin can break through the historic high of $120,000 depends on whether it can attract more institutional capital into the market, rather than the 'emotional speculation' of retail investors.

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