In-depth market analysis

On the surface, this round of decline was caused by the panic caused by the BTC selling of the German government and Mentougou, but in fact, there were many malicious short-selling behaviors behind it, aimed at clearing leverage and borrowing funds. On-chain data shows that in addition to Mentougou, there are other big players selling.

📈 The long-short ratio soared to more than 2.5, and the market sentiment was extreme, but the bulls still moved forward firmly.

My suggestion: avoid bottom-fishing for the time being, and the current risk of decline is high.

The reasons are as follows:

1️⃣ The German government and Mentougou sold BTC on a large scale. Can the market withstand it? More importantly, the short-selling force is far more than them.

2️⃣ Although the market is full of panic, there are still many bottom-fishing people pouring into the market.

3️⃣ The possibility of the Fed's interest rate cut in August is almost zero, and the market turning point has not yet appeared.

The essence of this round of decline is to clear the positions of big players, especially borrowers who use BTC and ETH as collateral. When liquidity is exhausted, extreme market conditions are prone to occur, and the German government and Mentougou incidents are just the fuse.

📉 My opinion: I am bearish, but I do not recommend shorting immediately. It is expected that BTC may have another 10% downside, but the risk is high, so it is not recommended to chase the rise. From 72,000 points to 54,000 points, the callback is more than 25%, but the depth of the wash is usually 30%-40%.