Old followers should know that in the last live stream, I briefly explained the basic logic of chip distribution. Many friends said they didn't hear enough and wanted to know how to apply it to real trading. So today's session is specially designed for advanced breakdowns, full of practical cases that can be directly used after listening. You can also imagine various shapes in your mind in your daily life, so that you have images in your mind.

The first is the already implemented interest rate hike in Japan. Don't think that Japan's policies have nothing to do with us, as it directly affects yen arbitrage -- many large funds borrow low-interest yen to buy high-yield assets like US stocks, gold, and Bitcoin. If Japan continues to raise interest rates, the arbitrage space will shrink, and these funds will sell assets to exchange for yen, putting selling pressure on the market. Not to mention the past, on August 24th, when Japan raised interest rates for the second time and officially ended the zero-interest rate policy, Bitcoin dropped 16% in a single day, and the impact can be imagined. If any related news comes out later, everyone should be vigilant.

The second is the Federal Reserve's interest rate decision in the early hours of Thursday. This is the first interest rate decision since Wo Shen took office, worthy of close attention. Currently, due to the US-Iran conflict raising oil prices, US inflation has rebounded somewhat, but there is no reason for a rate hike or a rate cut in the short term, and it is likely to maintain interest rates. What really affects the market is the press conference at 2:30 AM, where hawkish or dovish signals released are much more important than the decision itself.

The third is the US-Iran negotiations on Friday. The fact that the market can rally essentially reflects the good expectations for alleviating the conflict -- even if initially it was a false message from Trump, the market can still rise. Whether a formal agreement is signed on Friday or if there are any changes afterward will directly affect market fluctuations.

To be honest, no matter how accurate technical analysis is, it cannot overcome sudden news. But it's impossible to watch out for news every day. When we trade, we still have to rely on technical tools as the foundation, combined with quick news to monitor directions, making it less likely to be suddenly thrown off track. Moreover, everyone has also figured out some patterns: the signals released from Trump's side are mostly positive signals, and when seen, there are short-term long opportunities; on the Iranian side, when they come out to refute rumors, the market tends to retreat; just pay attention to the movements from both sides. Recently, the market's pattern has basically been back and forth between the two sides, with Trump releasing good news resulting in a rise, and Iran coming out to clarify causing a drop, repeatedly happening several times. Although every time it feels like "the wolf is coming," we must acknowledge the influence that they have, and stay vigilant.

We've discussed enough about the news, let's officially enter today's core topic — how to use chip distribution. First, let me give new friends some basic knowledge: you can search or directly find chip distribution charts, and I believe most of you have used this function before.

When we usually look at candlesticks, we can only see where the price has moved, what the highs and lows are, and what shape it has taken; but chip distribution can tell you how much volume has been traded at each price point, that is, where the total market investor's holding cost is distributed. The longer the bar, the more chips are piled up at that price level, and the stronger the market consensus is. The system defaults to blue and orange color, where blue represents buying transactions and orange represents selling transactions; I changed it to red and green for a more intuitive view. This indicator is suitable for any trading mode, whether it's spot, contracts, or short-term fluctuation, you can just use the default parameters without blindly adjusting.

First Trick: Find Chip Peaks, Accurately Locate Support and Resistance

Using chips to watch the market, the most practical first usage is to find chip peaks to judge support and resistance levels. What is a chip peak? It is the longest bar among a row of bars, professionally known as POC, or the price point with the most trading volume and strongest market consensus.

Here's a small question for everyone: Do you think chip density is important, or is dispersion important?

Currently, on Bitcoin's chart, the longest chip peak is around 65733, which happens to be below the current price, making it a strong support. When the price drops to this level, there will be a lot of holding costs supporting the market, making it difficult to break down directly, whether it bounces back or consolidates. Conversely, if the chip peak is above the current price, then it becomes strong resistance. For example, the peak around 66943 above—if the price rises to this level, the funds that were previously trapped at this position will concentrate on selling, forming selling pressure, and without enough capital, it will be tough to break through.

I previously mentioned why Bitcoin is hard to drop below 50,000—it's because a massive amount of chips is piled up below, making it a consensus cost area for the whole market, including Tesla and many institutional positions that are in this range, with very dense chips providing strong support. Looking at a longer cycle, since 2019, most chips have concentrated below 43000, the lower you go, the stronger the support, making it not so easy to break down.

In addition to individual peaks, you should also look at the value area of the chips — the range where 70% of chips are concentrated. The upper edge of the range represents resistance, while the lower edge represents support. When the price oscillates in this range, it is suitable for high selling and low buying; when it effectively breaks through this range, it indicates that the market will move in a single direction, and the remaining 30% of chip distribution is sparse, making it easy to surge.

Many friends ask what time period to look at; in fact, there's no need to get tangled. Just pull up the corresponding K-line for the trading cycle you usually engage with. If you're doing ultra-short trading, look at the chip data within 24 hours; if you're doing swings, check one to two weeks; and for long-term trades, pull up the K-line for a few months or even a year. The core is that the selected K-line range should contain a complete set of highs and lows so that judging support and resistance will be accurate. In my last live stream, I mentioned that the first resistance level for this wave of rebound was near 67000, which was derived from chip distribution. Yesterday, the market reached 67200 and then fell back, exactly at this position. If it effectively breaks through 67000 later, the next target will be 69700, which is the upper edge of the larger cycle value area.

Second Trick: Look at Chip Structure, Assess Market Consensus Strength

The second usage is to observe the structure of chips, that is, whether it is a single peak, double peak, or multiple peaks, which can directly determine the strength of market consensus.

If all chips are basically concentrated in a narrow range, with only one obvious peak, this is a single-peak structure. A single peak indicates that market consensus is highly unified, either indicating sufficient accumulation at the bottom or concentrated selling at the top; once this range is effectively broken, the market’s explosive power will be particularly strong. If there are two obvious peaks, one above and one below, this is a double-peak structure, indicating that the market is divided into two factions—high positions are all locked in while low positions are concentrated; the intermediate gap is a vacuum area that is prone to rapid fluctuation. If several peaks are densely packed, this is a multi-peak structure, indicating substantial market divergence. When prices rise, each peak acts as a resistance level, and when prices fall, each peak serves as a support level, resulting in pauses at intervals.

Simply put: single peaks are likely to trend in one direction, double peaks have gaps in between, and multiple peaks are likely to consolidate. Looking at your own position, you can roughly gauge the upcoming market rhythm.

Third Trick: Observe Chip Center of Gravity to Grasp the Major Trend Direction

Alright, let's move on to the third usage, which is the most effective for judging the major trend — observing the movement direction of the chip center of gravity. The chip center of gravity is what we call POC, which is the position of the longest chip peak. If the POC is gradually moving upwards, while the entire value area is also following the upward trend, this is a very clear bullish signal.

At the end of May during Bitcoin's trend, the POC was still around 62900. After a period of horizon consolidation, the POC slowly moved to 63900, then to the current 65700, with the center of gravity gradually rising, indicating that funds are constantly accumulating at higher levels, naturally leading to price increases. A typical example is the previous BNB's case, where between 2024 to 2025 during the range consolidation, the chip peak continued to slowly rise, and anyone with discerning eyes could see that the main force was quietly accumulating, later surging to 1300 in a natural progression.

Conversely, if the POC keeps falling and the value area also descends, this is a standard bearish signal. At the end of May this year during the downturn, Bitcoin's POC dropped from 80800 all the way down to 76500, with the center of gravity pressured lower, so further price dips were not surprising.

Everyone should remember: the upward movement of the center of gravity indicates bullishness, while downward movement indicates bearishness. Combining this view with the value area will significantly increase the accuracy of trend predictions.

In fact, chip distribution can be very accurate on its own, and when combined with Pro’s full depth and large transaction functions, grasping short-term opportunities can yield better results. Last Friday, when SPCX was falling, I mentioned that a lot of sell orders were piled up at 198, indicating not to rush to short but to wait for a breakthrough before considering bullishness. Why was I able to judge this so accurately? It came from the chip distribution and market depth — there were large sell orders placed at the 198 position by the main force, indicating that even if you set stop-losses for your long positions here, you could firmly capture an 18% rise.

On June 16th, concerning the market, there were 968 sell orders of Bitcoin around 66550, accounting for over 60 million USD. Nearby, large accounts also placed more than 600 orders at a similar level, adding up to about 30 million. This position coincided exactly with our chip peak resistance level, so the market retreated upon reaching it, which is not surprising.

Let me share a useful tip: if you see concentrated large active buy orders consuming sell orders regardless of cost, that is a typical signal for seizing chips, and the probability of rising afterward is especially high; conversely, a concentration of large active sell orders smashing down indicates selling pressure is coming, so one should act to mitigate risk. For instance, during the previous surge of SPCX, there were numerous active buy orders densely packed at the bottom, robbing chips very urgently, and the subsequent substantial rise was already foreshadowed. Not only for cryptocurrencies but gold exhibits similar behavior. Last week I sent out a quick news alert noting that there were sell orders from the main forces at the position of 4228, and indeed the price encountered resistance and fell back at this level. These signals are not random guesses; they can be realistically seen from the market depth and chip distribution.

Today's core content is about finished; let me wrap it up with three key points: Find chip peaks, where below acts as support and above as resistance; observe the structure — single peaks lead to trend, while multiple peaks indicate divergence; and check the center of gravity — an upward move indicates bullishness while a downward move indicates bearishness. Master these three points, and you will generally have enough for watching the market for support and resistance, as well as judging trends.

Still, I want to remind everyone: indicators are only auxiliary tools, and the final trading decisions should also consider news events and position management to decide on your own—there are no indicators that are 100% accurate.

If there are any questions you don’t understand, feel free to join the "Q&A Growth Community" group to ask me. I will also share market analysis and indicator usage in the group. That wraps up today's live stream; I'll see you again next Tuesday afternoon. Other AiCoin buddies will also be live streaming daily, so remember to keep an eye out 👇:
https://www.aicoin.com/zh-Hans/live/list?tab=upcoming

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