Bitcoin plummeted again this morning, dropping to $110,680, and the funds that chased the rise last Friday night have all been trapped. This wave of Bitcoin has plundered a lot of liquidity, with the main reason for the plunder being chasing highs and lack of risk control, leading to very poor resistance to pressure. Without resistance, when risk strikes, the only outcome is liquidation! In the last 24 hours, a total of 144,567 people were liquidated globally, with a total liquidation amount of $666 million.

Reasons for the plunge

Mainly due to the selling by ancient whales who have switched from $BTC to $ETH after sleeping for seven years, once the whales finished selling BTC, they all went long on ETH, causing Bitcoin to plunge!

The selling pressure of Bitcoin is mainly concentrated in the hands of ancient whales, who reached their peak holdings around 2011. At that time, the price of Bitcoin was bought at $10 or lower. Now, for every BTC they sell, the market needs more than $110,000 in new funds to absorb it.

Whale liquidations have caused a large number of retail long positions to stop-loss; the $1000 spike below 111.6k was caused by these retail losses.

Market Analysis

Bitcoin

From the daily chart, the recent drop to around 11000 shows a long lower shadow, indicating a re-test of the support at 112000. After switching lines during the day, the market also dipped slightly; currently, the daily trend shows a bullish candle, and the 4-hour line has also formed a long lower shadow. Overall, the support has not been broken, and there are still opportunities for a rebound during the day. Here, we will take a long position and watch for a short-term high point breakthrough at 117397.

Suggested entry point: Enter at 113000, stop loss at 111000, target at 116000, and after reaching, focus on breaking 117397, manage your own entry opportunities; for short-term trading, control risks and manage profits and losses independently.

Ethereum

From the Ethereum daily chart, although a doji star was formed, it is a bullish doji star, indicating strong bullish signals. The weekly closing for Ethereum remains strong, and overall, there is still room above Ethereum, so the trading strategy remains bullish.

Suggested entry point: Around 4730, stop loss at 4650, target at 5000, 5100, manage your own entry opportunities; but pay attention to short-term trading, control risks.

In summary: Bitcoin and Ethereum both have rebound opportunities in the short term.

Altcoin

My intuition tells me that this round of rampant altcoin season is coming soon. A widespread altcoin season must involve large-scale external funds entering the market. For example, many friends around me, who were early movers into ETH stocks, have already started to enter and position in altcoins. Once ETH really pulls in FOMO, there will definitely be more traditional incremental funds entering the market. In my view, liquidity overflow is almost inevitable, but we need to wait for the three signals to resonate:

1) TOTAL3 weekly line breaks the previous high with increased volume.

2) Net increase rate of stablecoins > 3% per month.

3) ETH/BTC weekly > 0.06, while avoiding high unlock pseudo cash cows.

If you are considering switching to altcoins, take hold of those:

1. Having experienced at least one round of cycle restructuring.

2. The business is a major cash cow and is growing.

3) Altcoins that you can understand and use.

As long as Ethereum does not weaken, after the market lowers interest rates, the possibility of an explosive altcoin season is very high. High-quality altcoins like LTC, DOGE, UNI, AAVE, PEPE, SUI, IP, etc., can all be positioned.

Conclusion

  • Bitcoin: After a short-term dip, it rebounded; the support at $112,000 remains, and if it can break 117,397, it will open up upward space again.

  • Ethereum: The trend remains strong, aiming directly at the $5,000 mark.

  • Altcoin: If ETH maintains its strength, coupled with expectations of macroeconomic easing, the next round of explosive 'altcoin season' may already be on the way.

Risk Warning:

  • Whale selling remains a potential threat;

  • Short-term operations must have stop-losses in place;

  • Do not go all in; position control is always the top priority.