Don't be lulled by the 'halving narrative'—five reasons why BTC is likely to drop next

Main text:

1. ETF capital inflow has shown signs of fatigue

Over the past two weeks, the spot ETF has continuously experienced net outflows, with BlackRock's IBIT daily trading volume shrinking by over 60% from its peak. Institutions are not perpetual motion machines; once marginal buying slows down, the market loses its strongest support.

2. Macro liquidity is reversing

The minutes from the June FOMC meeting clearly mentioned that 'if inflation proves to be more persistent than expected, further interest rate hikes cannot be ruled out.' The US dollar index DXY has rebounded 4% since April, and US Treasury yields have returned above 4.3%. A high-interest-rate environment is like a dull knife cutting through assets without cash flow.

3. Strong signals of 'large holders selling' in on-chain data

• In the past 30 days, the number of addresses holding 1k–10k BTC has decreased by 37,000.

• Net inflows to exchanges have been positive for 5 consecutive weeks, while retail investors are still bottom-fishing; smart money has begun 'front-running'.

• The MVRV indicator (market cap / realized value) has returned above 1.8, historical experience shows that the probability of a pullback of more than 20% in this area is > 70%

4. Derivative leverage remains crowded

The perpetual contract funding rate hovers around 0.03%–0.05%, with a long/short ratio of 2.3:1. Bulls are overly optimistic, and often just a 10% drop can trigger a series of liquidations, creating a negative feedback spiral.

5. Narrative fatigue: from 'halving' to 'selling the fact'

The halving market began to advance as early as October last year, with miners gradually moving coins to exchanges starting in March. Historically, a 'miner selling pressure + profit-taking' pullback occurring 3–6 months after halving is the norm (29% drop in 2016, 17% drop in 2020).

Trading plan (not investment advice):

• Spot: Currently in cash, waiting to consider laddered buybacks in the 48k–50k range.

• Derivatives: Small short positions are set at 60k–61k, stop loss at 63.5k, targets first look at 54k, then the psychological level of 50k.

• Risk control: Single transaction risk should not exceed 2% of capital, using options for tail protection to prevent macro black swan events.

Bull markets often have sharp declines, while bear markets usually have protracted downturns. Given the current situation of liquidity contraction, high leverage, and on-chain divergences, I choose to side with probability—shorts. If you also sense danger, it might be wise to bookmark this post and revisit it in two months, hoping we are not standing guard at the peak.