Event Review 🔍

Recently, the BTC market experienced a significant fluctuation. Starting from the support signal at 11:31 AM, the price suddenly jumped at noon and then retraced profits in the afternoon, all accompanied by multiple news impacts and technical liquidations. Investors witnessed long-term holders insisting that "BTC will never be liquidated," while also observing panic selling triggered by institutional positions being forced to liquidate. The exposure of large leveraged positions, the impact of ETF fund outflows, and the chain reaction of automatic liquidations led the market to complete a full cycle from stagnation to rapid rebound and then a swift correction in a short period.

Timeline 🕒

• 11:31: The market first received positive support signals, with long-term views stating, "Bitcoin won't be liquidated even if it drops to $8,000," injecting confidence into subsequent holders.
• 11:32: Reports indicated that the leverage level of BTC-USDT perpetual contracts was cooling down, suggesting that excessive leverage pressure was gradually easing.
• 11:36: Local market sentiment turned sharply, with multiple messages indicating that while the bottom had not fully formed, institutional positions were being liquidated on a large scale, and long positions were continuously turning into short positions, spreading panic sentiment.
• 11:46: Industry experts mentioned that BTC's price was around $65,000, and for some investors, it was currently a long-term buying window, hinting at a bottom-fishing opportunity.
• 11:56: Market technical analysis suggested that at the 250-week moving average, every $5,000 drop could be considered for increasing positions; simultaneously, data indicated that the BTC holding index had entered a bottom-fishing range not seen in nearly three years.
• 12:00: The volatility period officially began. In the approximately $64,000 range, bottom-fishing funds and systemic liquidation actions intertwined, sowing the seeds for severe fluctuations.
• 12:02: Reports emerged that BTC experienced the fourth-largest sell-off in nearly a decade, triggering automatic liquidation effects that impacted the market.
• 12:00–13:45: Within 111 minutes, BTC's price surged from about $63,925 to $66,750–$66,783, an increase of over 4%, indicating a rapid influx of bottom-fishing funds and some institutional capital, leading to a brief surge in sentiment.
• 13:45: The rebound reached a short-term peak, with prices touching approximately $66,783, at which point market sentiment had reached an extremely optimistic state, but also hinted that the rebound might be overheating.
• 14:15: The price adjusted again, dropping to $65,825.1, as profit-taking and investors repositioning led the market into a phase of adjustment.

Reason Analysis ⚙️

Combining macro and internal market factors, the recent severe fluctuation in BTC was mainly driven by the following two factors:

Macroeconomic Policies and International Political Uncertainty

• The U.S. Congress's funding, government shutdown risks, and repeated statements regarding Federal Reserve policies and interest rate cut expectations have increased liquidity concerns in global markets.
• Frequent changes in international political situations, such as related policies from the UK, Europe, and Japan's central banks, further triggered drastic adjustments in capital flows, increasing overall market uncertainty.

Internal Leverage Positions and On-Chain Liquidation Effects

• Multiple reports indicated that issues of high-leverage trading and concentrated institutional positions were gradually being exposed, with large orders and automatic liquidations triggering panic selling pressure.
• The net outflow of ETF funds and the imbalance of long and short position indicators exacerbated market liquidity tension, creating a chain liquidation effect.
• This automatic stop-loss and liquidation behavior triggered by high-leverage trading quickly weakened long positions in a short time, leading to a rapid shift in the market towards alternating selling pressure and rebounds.

Technical Analysis 📊

Based on the 45-minute candlestick data of Binance's USDT perpetual contracts, the current technical characteristics of BTC are as follows:

• Indicator Observation
• The KDJ indicator is in the overbought zone and has begun to converge, suggesting a possible pullback in the short term.
• The OBV indicator has turned negative, indicating a shift in market sentiment towards pessimism.
• Moving Average System
• Trading volume has decreased compared to previous periods, with both the 10-day and 20-day moving averages showing reduced activity;
• The MA20 and EMA120 moving averages are both trending downward, indicating a bearish outlook in the medium to long term.
• Short, Medium, and Long-Term Trends
• The price is below the EMA24/EMA52 moving averages, and both are showing a downward arrangement, indicating an overall bearish trend;
• Although the MACD histogram shows increased upward momentum, signals such as TD price reversals have begun to issue bearish warnings.
• Large Orders and Significant Transactions
• In the past hour, the total amount of liquidations across the network was approximately $4 million, with short positions accounting for 75%, indicating that a large amount of capital was forced to liquidate;
• Although there was a net inflow of $40 million in main capital, it still appeared insufficient compared to the overall selling pressure.

Market Outlook 🔮

In the short term, BTC's price may fluctuate around $65,000. After experiencing adjustments and slight rebounds, investors should pay attention to the following directions:

• Market Sentiment and Liquidation Effects
• If leverage position pressure continues to be released, and some institutional funds position themselves at lower prices, the market may see a brief rebound;
• However, if macro uncertainties persist, panic among funds and automatic liquidation effects may continue to escalate, further lowering prices.
• Key Technical Support and Resistance
• From a technical perspective, bulls should focus on the historical support near the 250-week moving average (around $55,000). If the price forms solid support in this area, it may attract bottom-buying;
• Conversely, if the price breaks below key support levels, market panic may escalate, increasing the risk of further declines.
• Medium to Long-Term Trend Observation
• From the perspective of institutional funds, leverage positions, and overall technical indicators, the long-term trend still needs to observe whether funds will be further released and the direction of macro policies;
• Investors should operate cautiously, maintain appropriate positions, and pay attention to the impact of subsequent macro policies and international political events on market liquidity.

Overall, the recent severe fluctuations in BTC reflect both the internal competition for funds in the market and the impact of increasing macroeconomic uncertainty on the crypto market. Investors should focus on risk control in their operations, monitor changes in technical aspects and capital flows, and cautiously position themselves to respond to potential future volatility.

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