This supply data should have favored the bulls, but the result was....
Crypto AI is also evolving significantly, thinking, conversing, and communicating.
You need to carefully read the content below; it is quite important.
Methodology for identifying "distribution signs" (i.e., signals that large holders or institutions are starting to sell assets) in the cryptocurrency market.
Take Bitcoin as an example,
One should not only focus on asset supply but also track the speed of capital flow (frequency and speed of circulation) and closely observe the collapse of the "deployment ratio" (i.e., the proportion of funds transitioning from idle to actual investment).
This is a more dynamic analytical approach that can reveal the true pressures and trends in the market.
First, those who observe a 2.3 times turnover rate at a scale of $270 billion will view this capital as "parked" (i.e., temporarily set aside and not acted upon), rather than "dry powder" (i.e., idle funds ready for deployment at any time).
This means that capital appears abundant but actually lacks momentum, which could be early signs of distribution.
Second, for those who believe that maintaining a bull market requires a monthly influx of $1.3 trillion, if the actual inflow has a $620 billion gap compared to expectations, this constitutes a clear "shorting signal" (i.e., an opportunity to sell or bet against the market).
This gap is not a random phenomenon, but rather the accumulation of mathematics at work, indicating that the market may be turning towards a bear market.
Market analysis should not remain at static data levels; it should capture real signals through dynamic indicators such as flow speed and gaps, thus avoiding being misled by appearances and achieving more precise trading decisions.
There are many third parties providing specific data queries; I will gradually write them out later.
Dynamically track the speed of capital flow and deployment ratio, rather than static supply levels, to identify market distribution signs and shorting opportunities.
This perspective can help investors glean bear market signals from the "parking lot" status of capital and inflow gaps, avoiding blind optimism.
For example
Hypothetically, if the total supply of Bitcoin remains stable at 21 million coins, but we observe that the turnover speed of stablecoins (like USDT) reaches 2.3 times at a scale of $270 billion, this means that this capital is not actively buying Bitcoin (i.e., in "dry powder" state),
Rather, it is idled like vehicles parked in a parking lot. At this time, if the bull market expectation requires a monthly influx of $1.3 trillion to drive prices up, but only $700 billion actually flows in, resulting in a $620 billion gap, it is akin to "a leaking gas tank" — the market cannot maintain upward momentum.
At this point, smart investors will see this as a shorting signal, choosing to sell Bitcoin futures or options in anticipation of a bear market.
Don't just stare at the pile of ammunition in the warehouse (supply), watch the speed of the bullets flying (flow speed)! $2.3 billion turnover is like a parking lot, not an armory.
A bull market requires a monthly boost of $1.3 trillion; a shortfall of $620 billion is like the brake pads — it's time to brake (short)!
Finally, let me explain this $270 billion issue again,
Background: $270 billion may be a subset of BTC market value, exchange holdings, or TVL (total value locked), and 2.3x is inferred from the trading volume/holding ratio.
Summarize it in one sentence:
Dynamically observing rather than statically hoarding, so one cannot solely rely on data indicating supply shortages to determine direction; of course, in the long run, it is still effective, for example, the upward trend of ETH is still promising.
