1. Suppression from short sellers

We previously analyzed that the operating range of BTC should be between US$25,000 and US$26,800.

The same is true for the development in the past week.

The highest point of the market runs on the middle track of this operating range, which happens to be the position where 20MA and 10MA are suppressed.

Judging from the market sentiment and market situation, the market is bearish and will continue to move downward.

1. Financial market environment

DXY moved higher, reaching 104, the highest level in 6 months, and is testing the upper pressure level, with the possibility of a breakthrough.

Correspondingly, the US stock market, which has an inverse relationship with it, fell after reopening. There is a market saying that the US stock market has reached its peak. Will it further bring down BTC? We will also talk about this topic tomorrow. If it really reaches its peak, it will have a great impact on personal investment plans in the next six months. Please pay attention to subscribe and don’t miss tomorrow’s in-depth analysis.

2. Historical experience of BTC false breakthroughs

After the false breakthrough of BTC, according to experience, the selling pressure from above is extremely high, which is a confirmed fact.

Generally, this kind of market situation is more likely to go into a downward trend, and there is historical experience of this.

In September 2022, after a false breakthrough, the market went through a relay period of about 20 days before further plummeting.

In May 2022, after the first false breakthrough, there was another false breakthrough a week later, and then the market plummeted directly.

From the 4-hour level, we can also see that BTC’s recent highs are constantly decreasing.

Historically, September is not a harvest season, but a harvest season, the season for harvesting leeks.

2. Supporting Bullish Forces

But why didn't it fall?

This requires analysis of the other side, the support of the market.

1. BTC net outflow from exchanges

First, looking at the on-chain data, BTC has experienced net outflows for several consecutive days, although the volume is not large.

So does this mean that people are hoarding Bitcoin?

2. Stablecoins continue to rise

We further see that the stablecoins with on-chain data have risen slightly for several consecutive days.

This USDT contributed more than 50 million US dollars.

This means that European and Asian bookmakers who mainly use USDT are willing to hoard coins, because $25,000 is a key support-resistance swap level, and is also close to the shutdown price of most machines.

3. The number of whale addresses hit the bottom, and the willingness of big investors to buy at the bottom became stronger

Furthermore, we can see that the number of whale accounts with more than 1,000 bitcoins has bottomed out, which is almost the lowest point in the past three years, and the price has also reached a low point. Historical evidence shows that whales generally accumulate funds here, and the subsequent price will stabilize or even rebound.

The number of whale addresses has decreased in the past two years. There is also a need for large investors to diversify their holdings. As quantitative asset management matures, I will see a decrease in whale addresses overall. But on the other hand, if there is no major negative news and a recent price low is reached in a short period of time, the number of addresses will rebound. Conversely, if the price is at a high point, the number of whale addresses may fall further because whales will adopt arbitrage strategies.

The fact that the number of addresses with more than 10 bitcoins continues to rise actually means that as the price approaches 25,000 US dollars, many big investors are beginning to want to buy at the bottom.

3. Summary: Currently long vs short = long term vs short term

The bulls are not speculating on the trend, but are hoarding coins for the long term. The current price is very low for the halving next year. If you don’t want to do tedious analysis every day, you can start regular investment now.

As for the bears, from a short-term analysis, if the price falls below 25,000, there will be lower chips, so they would rather sell out first when the price rebounds to a higher level, keeping more bullets in order to get a better bargaining price.

At the same time, the price has fallen below the 60-day moving average, 30-day and 10-day moving averages for a long time, which means that in the past two months, the past 30 days, and the past 10 days, most of the people who participated in BTC transactions have suffered losses. Within this period of time, everyone has not played dead and has a strong desire to get out of the predicament.

4. Market outlook:

If it is to fall below 25,000, it must fall within a month, otherwise it will not fall for a long time and may become the bottom. Because the high-level distribution range above 25,000 is 52 days, then the relay above 25,000 has been going on for more than 20 days, and it should also take about 20 days to give an answer.

Of course, if it eventually breaks, there will be a retest between 26,500 and 27,200 USD before that. The relay plunges after the two false breakthroughs mentioned above had at least one rebound test in the middle, which still gave short-term operators a chance to get out of the trap.

The better market trend I anticipate is that the pin falls below 25,000, quickly recovers, and tests the vacuum zone again, and the pressure level that exchanges positions with the support resistance: 26,400 US dollars. After filling the vacuum zone of 27,000 US dollars upwards, a sharp drop in the market will begin.

Of course, if after consolidation for many days, there is still no sharp drop in the market, then a B-wave rebound may begin.

Just like after the previous rising market, it consolidated for many days and was unable to achieve a larger increase, and eventually turned into a bear market.

5. Operational Suggestions

The overall market situation is not so hopeless. As long as you have enough bullets in your hand, you are not afraid of the plummeting market. If you don’t want to miss the B-wave rebound, you can buy at a 5% position near 25,200 US dollars. If it really falls below 25,000 US dollars, hold it for a long time; if there is a small rebound, you can directly earn swing profits.

But be sure not to hold large positions and contracts. The sustainability and space of the subsequent B-wave rebound will not be particularly large. After all, we are in a trend that is still bearish, and the most important thing is to protect the principal.