BTC Concentration Index Analysis
From May 7 to May 14, BTC concentration dropped sharply from 15.5% to 8.2%, indicating that the price rally has left the concentrated area.
Typically, a continuous decline in concentration is often accompanied by an upward price movement. However, after May 14, this indicator stagnated around 8.2%, even showing signs of turning upward.
Two-way scenario analysis:
Scenario 1 (Price Correction): If the price falls back to the original concentration area, the concentration curve will quickly rebound, potentially triggering a volatility amplification effect similar to January 23, 2025;
Scenario 2 (Price Continuation): If the upward trend continues, the concentration curve may replicate the movement on November 3, 2024, briefly consolidating before continuing downward.
Current Market Signals:
The indicator's stagnation breaks the "smooth decline" trend, suggesting that the bull-bear game has entered a directional choice node. Relying solely on this indicator makes it difficult to predict price fluctuations, but one must be wary of rising volatility risks - if concentration further increases, positioning volatility strategies (such as straddle options) may be cost-effective.
⚠️ Note: This article is for technical communication only and does not constitute investment advice.
