1. The underlying logic of the sell-off: resonance between macro and market behavior
This round of decline was triggered by dual factors, not a single negative news:
Macro sentiment cooling: weak U.S. wholesale price data has weakened market expectations for an 'earlier interest rate cut cycle', leading to a contraction in risk asset preferences; combined with the U.S. Treasury Secretary's statement of 'not planning to increase Bitcoin reserves', this directly undermines institutional allocation confidence, and funds that entered the market due to policy expectations have begun to exit in phases.
Chain liquidation under liquidity squeeze: on-chain data shows that when the price fell below $114,000, over $100 million in long positions were forcibly liquidated within one hour. This cycle of 'price drop → long liquidation → increased selling pressure' has amplified the pullback in the short term—essentially a normal clearing of leveraged funds after a rapid rebound.
It is worth noting that the sell-off has shown characteristics of 'differentiated transmission': the decline of mainstream coins like ETH has narrowed to 0.4%-5%, while altcoins like SOL, XRP, and meme coins like Dogecoin have seen more significant declines, indicating that funds have not fully withdrawn but have contracted towards high-certainty targets.
2. Technical warning: $107,000 is the line of life and death; the wedge pattern hides risks.
Two key technical signals have emerged in the current price trend, requiring high vigilance:
Key support level contention: $110,000 is a short-term psychological support, but the real technical defense line is at $107,000—this is the confirmation point after breaking through $100,000 earlier, and also the dense area of net fund inflows in the past 30 days. If this level is lost, it may trigger stop-loss sell orders from algorithmic trading, further opening up space for a drop to $94,000 (the lower boundary of the previous wedge pattern).
Ascending wedge pattern awaiting confirmation: the daily level has formed an ascending wedge with 'higher highs slowing down and higher lows narrowing', which is a typical potential reversal pattern. If it cannot quickly recover $118,000 (the upper resistance of the wedge), the target for a pullback may point to the $88,000-$94,000 range.
3. Not without opportunities: bullish logic still exists, but signals are needed
The market has not fallen into a completely bearish outlook; some core analysts still retain upward expectations:
Analyst BitQuant clearly pointed out that the probability of BTC breaking below $100,000 in this cycle is extremely low. The short-term pullback is seen as 'a buildup before the $145,000 target'—the logic is that the current spot ETF holdings are still net increasing, and there are no signs of withdrawal from long-term allocation funds.
However, one must be clear-eyed: this kind of bullish judgment is a 'cycle-level trend', not a 'quick fix' for short-term pullbacks. The current market needs 'signal confirmation'—either a daily 'large volume bullish candle recovers $118,000', or a 'long lower shadow + volume doubling' stabilization signal at the $107,000 support level. Until then, blindly bottom-fishing is not advisable.
4. Operational advice: do not panic sell, nor blindly bottom fish.
The core of the current stage is 'holding positions to withstand volatility, using signals to determine operations':
Holders: If the proportion of mainstream coins in your position exceeds 70% and there is no high leverage, there is no need to panic sell—if $107,000 holds, the pullback may end in the $110,000-$115,000 range; if the position is mainly in altcoins, consider reducing positions in batches to below 30% during rebounds to avoid liquidity contraction risks.
Observers: Bottom fishing requires waiting for two signals: either a stabilization K-line at $107,000 (such as a long lower shadow or a morning star), or the price recovers $118,000 with trading volume increasing to more than 1.5 times the recent average. The first target can be tried with a light position, not exceeding 20%.
Stop-loss red line: regardless of the size of long positions, $105,000 is the absolute stop-loss level—breaking below this level indicates that market logic has shifted from 'pullback' to 'trend reversal', necessitating decisive exit and observation.
Summary: The cooling period is precisely the time to gather strength; do not let emotions be led by the K-line.
This round of pullback is essentially a 'necessary cooling after a rapid surge'—the increase from $100,000 to $124,000 only took 12 days, and it is reasonable for short-term profit-taking and leveraged funds to clear.
What should be done now is to break out of the emotional trap of 'buying on the rise and selling on the fall': focus on the $107,000 support level and the $118,000 resistance level, and wait for the pattern to clarify before taking action. The cryptocurrency space has never been about 'who reacts faster', but rather 'who makes fewer mistakes amidst volatility'—maintaining principal during the pullback is essential to have ammunition when the trend arrives.
Blindly going solo will never bring opportunities. Follow Super Brother, and I will lead you to explore tenfold potential coins! Top-tier first-level resources!
