BTC has rebounded from the low point of $76,000 to $87,000. Panic sentiment is gradually easing, and the market seems to be rekindling hope. At this point, we can't help but wonder whether this is a short-term rebound or a trend reversal. My personal view leans towards the former, as the various data do not seem to meet the conditions for a complete reversal; let me illustrate this with some examples.

Figure 1

As shown in Figure 1, in January 2025, American investors began to exit early, while Asian investors stepped in, marking the end of the market (Label 1). On March 2, 2025, Trump announced on social media plans to establish a national-level cryptocurrency strategic reserve, which briefly lifted the sentiment of American investors (Label 2), but it fell flat again within three seconds.

This demonstrates that RMMPC can help us observe the sentiment performance of the three major mainstream markets (the US, Europe, and Asia) and its dominance over BTC prices. From the indicators, the current rebound is mainly driven by the sentiment of Asian investors, followed by Europe, while American investors appear more cautious.

Based on past experience, Asian funds usually focus on short-term strategies. If American investors do not continue to follow up, when the Asian market begins to retreat, the rebound may not be sustainable.

Figure 2

Figure 2 shows the adjusted on-chain settlement volume, which excludes transfers within address sets controlled by the same entity. We can clearly see that during the period from June to August 2024, as the BTC price oscillated downward, the overall on-chain settlement volume began to rise, creating a 'divergence' phenomenon; this is usually a sign of fund entry.

When prices continue to decline and market sentiment is low, liquidity should linger at the bottom, but instead it is increasing, which is an 'abnormal' situation. Currently, we see that as the BTC price begins to recover, the settlement volume continues to decline, not rising with the price, which is also an 'abnormal' phenomenon.

This indicates that the current market is still under low liquidity, driven by the alleviation of previously suppressed sentiment, but it lacks support from large-scale funds.

Figure 3

Figure 3 shows the on-chain settlement volume categorized by scale; if we selectively filter the data greater than 10 million USD, we can see a significant increase in settlement volume from June to August 2024, mainly due to the participation of large funds. The proportion of amounts greater than 10 million USD rose to 59%.

After reaching a peak in November 2024, it began to gradually decline from 62% to 37%, indicating that the exit of large funds from liquidity has a decisive impact on the BTC market. Conversely, a large-scale trend initiation also requires the reintegration of large funds into liquidity. The data from July to August 2024 reflects the broad involvement of capital at that time.

Figure 4

Figure 4 shows the net position data of stablecoins on exchanges. Although this only includes the net inflow/outflow of ERC20 stablecoins on exchanges, it can reflect the current enthusiasm of on-site funds indirectly.

Whenever a trend market enters a sprint phase, it is accompanied by a significant increase in net inflows. As labeled in the figure, 1 and 3 correspond to March-April and November-December 2024, respectively. Especially after Trump's victory, the market was driven by a collective FOMO sentiment, leading to an influx of massive on-site funds into exchanges (we have previously analyzed that these funds not only bought BTC but also a lot of other 'US-based' altcoins).

Afterwards, the net inflow of stablecoins rapidly declined. By January 2025, although it still maintained a net inflow status, it was far from the peak in December 2024 (Label 4), which is also a signal that the market is nearing its end.

In addition, we saw a noticeable increase in net inflows during August-September 2024 (Label 2), indicating that funds began to become more active. However, the current data does not reflect this; overall, it remains in a state of continuous net outflows, indicating that the price recovery has not led to a more optimistic change in sentiment, and funds remain cautious about macroeconomic uncertainties.

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From the four perspectives of sentiment dominance, liquidity changes, participation of large funds, and net inflows of stablecoins on exchanges, we analyze and compare to conclude that the more likely scenario is a 'rebound' rather than a 'reversal.'

Personally, I believe that every rebound is like a drill, often repeating several times. When everyone becomes numb, the drill suddenly turns into a real battle (clarifying direction, forming a trend).

Therefore, it is often difficult to determine whether a rebound will change into a trend during the rising phase. However, when the rebound ends and begins to pull back, we can use the data formed during this period to compare with earlier data to find more clues and guidance.