When a range gathers many investors, it is often a signal. Whether it is good or bad, if the investors in this range take consistent actions, it will have a great impact on the price. But if the investors in this dense area have almost no reaction to the current price, whether they are long or short, it means that the investors in this range have reached a certain consensus.
In layman's terms, when there are more than 3.8 million BTC in a price range of $5,000, if these 3.8 million BTC decide to leave the market at the same time because of good or bad news, let alone half, even if only one-tenth of them decide to leave the market at the same time, what impact will it have on the market? Germany's sales of only 50,000 BTC can cause such a situation. Mentougou's sales of 141,000 BTC, which is twice the total amount of BTC in Germany and Mentougou, will choose to leave the market at the same time.
But what if this part of the chips remains stationary, or the number of daily exits remains at a very low level? Although there may be some impact on the price, this impact will be very small, because most holders have not taken action, even earlier investors have not moved, so the short-term decline is the result of lack of liquidity and insufficient purchasing power. This behavior is reversible because there are not many chips actually involved in circulation.
Of course, in my opinion, it is not enough to only focus on this data. It is also necessary to look at it together with the stock of the exchange. If the high-speed pull-up can cause the stock of the exchange to decline, it means that the selling sentiment may be coming to an end.
