76000 USD is likely the mid-term bottom for Bitcoin

In the past week, the White House and the Federal Reserve have turned a blind eye to the sharp decline in U.S. stocks, and neither side seems willing to back down in this 'game of chicken.' Although the expectation of a recession is likely just a negotiation tactic by Trump to apply extreme pressure, the uncertainty of policy games has further stimulated the market's risk-averse sentiment.

However, as of now, the continuous decline in U.S. stocks appears more like a deliberate effort by the higher-ups to compress valuation bubbles rather than a precursor to a crisis spiral. A typical example is that during the process of the U.S. stock market issuing $5 trillion, A-shares, Hong Kong stocks, European stocks, and gold have all risen sharply, which is different from the collective collapse of global markets during past dollar liquidity crises (the circulation of dollars is the heart of global liquidity).

Although the crypto market has suffered from a liquidity backlash amid the contraction in U.S. stock valuations, Bitcoin's structural resistance capacity remains good, mainly reflected in three aspects:

1. According to Bloomberg terminal data, after the global liquidity crisis in March 2020, in the extreme scenario where the Nasdaq fell more than 15% in seven single months (calculated over 30 days), the adjustment of Bitcoin this time shows a significant convergence characteristic. It achieved volatility compression of 65.8% and 50.8% compared to the historical extremes of -53.6% in March 2020 and -37.2% in June 2022, respectively.

2. Unlike the extremely pessimistic expectations generated by previous rounds of significant declines, in this drop, the funding rate of Bitcoin perpetual contracts and the premium rate of Bitcoin quarterly contracts have remained stable, indicating that the will of the bullish main force has not been shaken by the decline.

3. This adjustment not only has a relatively gentle trend but has also almost never shown extreme spikes in intraday trading, indicating that the decline mainly stems from panic selling by small and medium-sized retail investors, while large whale investors continue to hold their positions.

Based on this analysis, I tend to believe that Bitcoin's current decline is merely a technical pullback after consecutive ATHs, and that the area around 76000 USD is likely to be the mid-term bottom.