🔍 Event Review

Recently, the BTC market experienced a round of intense fluctuations. Starting from 22:35, due to macro policy uncertainties (such as the U.S. government funding disputes, Trump's announcement of a new Federal Reserve chair candidate, etc.) and the concentration of high-leverage long positions at key price levels, investor risk aversion sharply increased, triggering a wave of cascading liquidations. Whales and liquidated assets were forced to sell off as prices fell, continuously pushing down the BTC price. Data shows that within just 51 minutes, the BTC price plummeted from about $70,849 to $66,710, a drop of 5.88%. Another set of data indicates that from 22:35 to 23:30, the BTC price fell from $70,370 to $66,666, a decrease of about 5.26%. After the sharp decline, some funds began to push the price back up to around $68,012 around 00:35, but the market overall remained in a state of oscillation and significant risk pressure.

⏰ Timeline Review

• 22:35: Market panic begins. Reports indicate that with the U.S. government funding disputes and Trump's announcement of a new Federal Reserve chair candidate, along with the risks of concentrated high-leverage positions in the market, the BTC price temporarily reported $70,849, showing initial signs of decline.
• 22:35–23:26 (within 51 minutes): The BTC price plummeted from $70,849 to $66,710, a drop of 5.88%. This process was accompanied by a large number of automatic liquidations, exacerbating capital withdrawal and liquidity exhaustion.
• 22:35–23:30: Another data set shows that the BTC price fell from $70,370 to $66,666, a decrease of about 5.26%, with key support levels being consecutively breached, leading to a sharp rise in market pessimism.
• 00:35: After the intense fluctuations, some funds began to intervene, pushing the BTC price back up to $68,012, but overall risks still exist, and market expectations have not fully returned to rationality.

🔎 Cause Analysis

1. Surge in Macroeconomic and Policy Uncertainty

• Internal funding disputes within the U.S. government and news of potential department shutdowns, combined with Trump's announcement of a new Federal Reserve chair candidate and unclear interest rate cut expectations, have raised concerns in the market about the future direction of monetary policy. The surge in risk aversion has led funds to flow into safe assets, resulting in the sell-off of crypto assets.

1. High Leverage Risks Triggering Cascading Liquidations

• A large number of high-leverage long positions in the market are concentrated at key price levels. Once prices begin to decline, a series of automatic liquidation mechanisms are triggered, forcing whales and liquidated assets to sell off, further diluting market liquidity and accelerating the price decline.

📊 Technical Analysis (Based on Binance USDT Perpetual 45-Minute K-Line)

• Price and Moving Averages:

• The current BTC price is operating along the lower Bollinger Band, in a clearly weak zone. The price is also below the MA5, MA10, MA20, and MA50, with multiple moving averages in a bearish arrangement, indicating that the short to medium-term trend is in a downward channel.

• At the same time, EMA5, EMA10, EMA20, EMA50, and EMA120 are all arranged downward, with their slopes showing extremely strong downward momentum (for example, the slope of EMA20 is -1.37%, and EMA120 is -0.62%), suggesting that both long-term and medium-term trends remain bearish.

• Technical Indicators and Volume:

• The KDJ indicator shows signs of divergence, and the OBV indicator has fallen below previous lows, reflecting a gradual increase in selling pressure.

• Trading volume has significantly increased—trading volume in the last hour rose by 43.38%, the 10-day average volume increased by 105.21%, and the 20-day average volume rose by 55.14%, indicating heightened market activity, but more reflected in the sell-off sentiment and automatic liquidations.

• The RSI is in the oversold region, and some technical indicators suggest that there may be short-term rebound opportunities in the market. The TD Sequential shows a bullish Setup (9), indicating a potential local reversal, but the overall environment remains unstable.

🔮 Market Outlook

Although the BTC price has seen some rebound after a sharp decline, it remains in an extremely weak state. The market outlook needs to consider the following points:

• Risk Warning: In the context of macro policy uncertainty and market panic triggered by high-leverage cascading liquidations, the market may still face further downside risks in the short term. Investors must pay attention to whether key support levels (such as around 68K) can hold firm.

• Technical Reversal Signals: Although indicators like RSI and TD Sequential show oversold conditions and potential technical reversal signals, market sentiment and liquidity risks are high. If buying pressure does not sustain, the rebound may only be a temporary correction.

• Liquidity and Capital Situation: Statistics on liquidations show that in the last hour, the total liquidation amount across the network reached $8 million, with long positions accounting for 46%, and a net outflow of about $90 million from major players, indicating that the current market capital situation remains tight. Capital replenishment and more buying intervention are key variables.

• Recommended Strategy: For short-term traders, it is advisable to remain cautious and closely monitor the support status at key positions in the market, avoiding excessive leverage operations; for long-term investors, it is possible to accumulate positions at lower prices, but one should control positions and manage risks, waiting for a turnaround in the market fundamentals and policy aspects.

Overall, the current BTC market is under the dual impact of extreme panic and cascading liquidations, technically showing short-term oversold reversal signals, but macro policy and capital risks still exist. Investors should remain calm, closely monitor market dynamics, and avoid making hasty decisions due to short-term fluctuations.

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