This morning, BTC broke key support again, plunging to $108,666. Funds that chased the rise last Friday night have all been trapped. The single-day acceleration saw a 14% rise, ringing the death knell for bulls, with a drop of $4300! Yesterday, Sweet Dream warned of the crash risk in the article. Fans who read yesterday's article shouldn't have gotten liquidated on long positions! This morning, seeing ETH drop beyond expectations, I aimed for an oversold rebound; this round's plan is to take profits and exit. Under unstable market conditions, I suggest everyone take their profits and run.
Reasons for the crash
Whale sell-off: About 24,000 BTC were transferred to exchanges for large-scale selling, causing a sudden price drop within 20 minutes, breaking key technical support levels.
Chain liquidation: The downward trend triggered forced liquidations of high-leverage long positions, with the market's liquidation scale between $550 million and $840 million, exacerbating price drops and creating a vicious cycle.
ETF outflow: BTC ETF net inflow has turned negative, with some institutions starting to take a short-term bearish view on the crypto market.
ETH's collapse: Unified margin accounts led to forced liquidations of ETH longs when BTC plummeted. The apparent resilience of ETH during BTC's decline actually acted as a shield for BTC. Market makers reducing their BTC and ETH positions further exacerbated the drop in ETH.
BTC
Currently, Bitcoin's trend is very clear and bearish. I do not recommend buying the dip in spot. A volume increase in the decline suggests further retracement is possible.
BTC is crazily testing the weekly support line. In the chart below, the red line's body slightly piercing through is acceptable, and there's still a possibility of a rebound here. However, if the body of the candlestick breaks below, we might be looking at a bottom near 100,000.
The price has currently broken below the downward trend line and the previous high support line, confirming a downward trend on the daily chart. A short-term stabilization is expected. An increase in volume with limited height is anticipated. Consider going long at 109500, adding positions at 109000, with a stop-loss at 108500 and a target near 111500. Only trade short-term, avoid getting trapped.
Resistance around 112000; if it doesn’t hold, consider shorting. There's also a gap in the 114000-116000 range. If it reaches this level in the short term, it presents an excellent shorting opportunity. You can place orders around 115200-116000 with a stop-loss near 117000. This way, you generally won't get trapped and can realize significant gains.
ETH
ETH's new highs have triggered excessive speculation + double-top formation. ETH's movement largely aligns with Sweet Dream's expectations, but the lowest point is lower than anticipated. Currently, there may be a rebound in the smaller timeframe. The ideal long position for a good night's sleep is around 4100 or 3900.
After breaking the support at 4670, a common pullback occurred. If this pullback fails to rise, it’s a good position to enter short again.
Currently, there is an automatic rebound, but it is likely to continue dropping to around 4100. When buying the dip, it's advisable to diversify your entry. Set a stop-loss below 4000.
In the bigger trend, ETH remains in a bullish structure. Cherish the opportunity to buy on the dip again; the pullback is for preparing to break through 5000 and attack the 5550-5880 range.
Altcoin
During the decline, BTC's market share will rise again, and altcoins will fall faster than BTC. Today, all altcoins are seeing a surge; the altcoin season is actually an altcoin funeral.
However, Pepe estimates that there will be another wave of increase in altcoins before the expected interest rate cut in September. A genuine pullback will occur after the rate cut is implemented, which will be around October. There’s a basic consensus in this round of altcoins: small coins can't outperform large coins. Large coins are safer than small coins, so it's essential to consider leading assets. Although these leading assets have high market values, they truly appreciate, while small coins may not.
Is the bull gone and the bear back?
Every time the market drops, people say the bull market is over and the bear market has begun. The truth is that every drop sees institutions buying the dip. Yesterday, Ethereum spot ETF saw a net inflow of $443.9 million, while Bitcoin spot ETF saw a net inflow of $219.1 million. Therefore, I think it’s too early to talk about the market top. The sharp drop will continue to force old OGs to hand over their chips. This process can be understood as absorption and counteraction. Once the chips are sufficiently exchanged, the market will continue to rise.
Can we buy the dip?
Yes, you can buy the dip in altcoins: SOL, LTC, DOGE, PENDLE, OKB, PEPE, ADA, PENGU. This time, focus on short-term gains; if you profit, exit quickly.
