In the midst of strategizing, we decide the outcome from a thousand miles away. Hello everyone, I am Lin Chao, a global financial market observer, focusing on cryptocurrency market analysis, bringing you the most in-depth trading information analysis and technical teaching.

Since yesterday, Lin Chao has received many private messages from fans inquiring about the market situation, some asking how to break even on their positions, others wanting to enter the market to hold spot during this downturn, and some thanking Lin Chao for previous reminders that helped them avoid this waterfall decline. First, I would like to thank everyone for their trust. Regarding how to operate after this rapid decline in the market, Lin Chao will provide a detailed breakdown today.

Since last week, Lin Chao has been continuously warning everyone. The small waterfall of BTC came as we expected. In the early hours, BTC briefly fell below $99,000, reaching a low of $98,188, marking a new low since May 12. The 24-hour decline exceeded 4.4%, and in the past 24 hours, the total liquidation amount across the network reached $634 million, with BTC liquidations at $231 million and ETH liquidations at $189 million, mostly from long positions, indicating a significant leverage washout. After the rapid decline, a recovery trend emerged, with BTC's price rebounding to $101,014, a daily increase of 0.67%. ETH fell to $2,111 today, with a maximum decline of over 10% in 24 hours, currently rebounding to $2,232.

The reasons have been mentioned by Lin Chao before. Firstly, there are geopolitical instability factors. The conflict between Iran and Israel is significantly affecting market liquidity. As we know, when the cannon fires, gold flows. Whenever there is a war in the world, it is accompanied by significant capital movement. I won't elaborate on the war here; interested friends can look up relevant information. Moreover, oil prices have risen over 40% due to the Iran-Israel conflict, leading market funds to flow into the oil market. If the fighting cannot be resolved in the short term, and with more countries getting involved, Bitcoin's price will continue to decline.

Secondly, the Federal Reserve has not announced any interest rate cuts to stimulate the economic market. Earlier speculative funds have chosen to temporarily withdraw, and some investors and institutions holding spot have decided to take profits at this time. In simple terms, the speculative funds that were lurking have exited, while also taking the opportunity to weaken leveraged retail investors. Additionally, since Bitcoin's price broke new highs, it has remained at a relatively high level, but there has been a clear divergence between market valuation and network activity. The number of transactions remains abnormally low, and non-token trading has sharply decreased, leading to a significant drop in miner fee income. Previously, the price was driven up by funds, creating an inflated market price, but miners' earnings did not increase with the rising price, which also led to the market price needing to align with actual market demand.

After breaking below the $100,000 mark yesterday, many people shouted to buy the dip and rushed into the market, but Lin Chao will not buy spot here. I believe the price is "in place" but not at a point I consider "worth entering." From a technical indicator perspective, there are no signs of oversold or bottom divergence; the order book has not provided any important signals that I consider significant. I will continue to wait for signals and for a pullback, as from a time dimension, this is not the best time to enter the spot market.

At the same time, Lin Chao can also see from on-chain data that many institutions are shorting the market. The European asset management giant Abraxas has a short position of up to $500 million, and the whale Spoofy has completed a spot liquidation of $3 billion in Bitcoin over the past few weeks, with no signs of re-entering the market. Therefore, from Lin Chao's perspective, institutions feel that the current market's risk of loss outweighs the potential gains, and the market is merely undergoing a tentative pullback. In the next 2-3 months, more negative factors will likely guide the market downward.

For those who have been following Lin Chao's contract users, you should have made a good profit in the past few days. Since $109,000, Lin Chao has been reminding everyone to position for shorting. Mid-term short users can recently take profits. Although the market may show a short-term upward recovery in the coming days, I do not recommend entering the market during this period, especially for users who are uncertain about entry points; it is better to stay in cash and wait.

Lin Chao believes that the cryptocurrency market in the second half of 2025 will be very interesting. Wall Street capital is already betting on a super interest rate cut cycle in the second half of next year, planning to buy all assets at low prices in the coming months. The reason is that Powell will step down in May next year. If Trump really intends to replace Powell, it is likely that he will announce the Federal Reserve chair candidate in advance, similar to Nixon, and push a trusted candidate to the public to undermine Powell's power. This is likely to happen in the second half of this year. If everyone has sufficient funds and enough patience, they can start positioning for the mid to long-term market from now until the end of the year.

Lin Chao's Summary

After experiencing a period of accelerated rise, with prices approaching $112,000, Bitcoin is showing signs of cooling down. Spot demand continues to grow, but the growth rate has slowed and is currently below historical trends. Moreover, from the perspectives of geopolitical conflict and fundamental policies, the cryptocurrency market is undergoing a turbulent downward cycle. The purchasing volume of Bitcoin by whales and ETFs has halved, and the demand from new investors is also declining. In the futures market, investors have recently chosen to take profits and begin establishing new short positions, leading to low market sentiment. If demand continues to weaken, Bitcoin may find support around $92,000, which corresponds to the actual on-chain cost price for traders, a typical support area during a bull market. If this support fails, the next support level may be around $81,000, close to the lower bound of the actual cost price for traders.

However, the good news is that this pullback cycle will provide ample space for everyone to position in the market. If you are still uncertain about entry points and position distribution, you can also message Lin Chao, and I will reply to each one after seeing them.

The market is always the market; the harsh reality will not change because of your losses, nor will it stop because of your tears and complaints. To change your fate, you must continuously learn investment skills and improve your own strength to truly stand firm. The biggest prison in the world is the consciousness of human thought. If you cannot earn money beyond your cognition, then learn to leverage.

The global market is ever-changing, and the world is a whole. Follow Lin Chao to gain a top-tier global financial perspective.

For real-time consultation, feel free to follow the public account: Lin Chao on Cryptocurrency.

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