After yesterday's sharp decline, market sentiment has plunged into extreme fear, with the long-short ratio approaching historical highs. Institutional buying has weakened, and options support is precarious. Key data suggests the market may be facing a significant decision: will the next step be a plunge into the abyss or a rebound? Let's delve into the logic behind the data.

1. Bullish confidence remains, but the main players lean towards shorting

OKX BTC long-short ratio: 3.45, at the highest level in nearly 5 years

• Data Interpretation: Currently, the number of long positions far exceeds short positions, while the main funds, representing a minority, are bearish.

• Risk Point: The sentiment among major players is bearish, and since they often hold market dominance, this can easily lead to a sharp reversal in trends.

• Historical Comparison: Last September, when this indicator broke 3, BTC experienced a brief pullback before entering a bull market. Therefore, the current high long-short ratio may indicate a need for short-term market adjustment, but it does not signify a trend reversal.

2. Fear and Greed Index plummets, market panic is released

Fear and Greed Index: 21, a new low since mid-August 2024 (Extreme Fear)

• Data Interpretation: This index reflects market sentiment, and the current value indicates that investor sentiment is extremely pessimistic, suggesting the market may be in a phase of panic selling.

• Historical Comparison: In August and September of last year, when this index fell below 25, BTC saw gains of over 20%, indicating that extreme fear often presents an opportunity for long-term investors to position themselves.

• Key Point: Although short-term fluctuations may still occur, historical data shows that extreme fear is often a precursor to market bottoming.

3. CME futures gap remains unfilled, may become support below

CME unfilled gap: $77,110~$80,670

• Data Interpretation: Price gaps in the CME futures market typically provide technical support or resistance for BTC, and the range of $77,110~$80,670 remains unfilled.

• Importance: This area not only contains the CME futures gap but also coincides with the 50% Fibonacci retracement level for BTC, overlapping with a significant range of monthly put options.

• Risk Point: If BTC price falls below the critical support of $85,000, it is likely to continue seeking support in the $77,000~$80,000 range.

4. Weakening buying power in the US market, institutional demand declines

Coinbase BTC premium: -0.0011, a new low since January 20

• Data Interpretation: The Coinbase premium reflects the buying strength in the US market, and the current negative premium indicates a decline in demand for BTC among US investors.

• Underlying Reasons:

1. Rising inflation expectations in the US have increased risk aversion, leading funds to flow into traditional safe-haven assets like gold and US Treasuries.
2. Slowing inflows into Bitcoin spot ETFs suggest that institutional investors are taking a cautious stance in the short term.

• Impact: The weakening buying power in the US market may limit the strength of BTC's rebound, and the market will need time to digest selling pressure in the short term.

5. MVRV enters a critical range, long-term funds may step in

MVRV ratio: 2.0451, a new low since November 6 last year

• Data Interpretation: MVRV reflects the deviation of BTC's current market value compared to its realized value on-chain, and the current MVRV level indicates that BTC has entered a value regression range.

• Historical Comparison:

1. When MVRV fell below 1 (from November 2022 to January 2023), BTC was at the bottom of a bear market.
2. Historically, when MVRV fell below 1.8, BTC often entered favorable buying zones.

• Market Signal: If MVRV continues to decline, it may trigger long-term funds to gradually accumulate, providing relatively solid mid-term support for the market.

6. Exchange BTC balances rise, selling pressure increases

Changes in exchange BTC wallet balances (in recent days):

• Binance: +14,220 BTC
• OKX: +2,707 BTC
• Bitfinex: +5,322 BTC
• Kraken: +4,860 BTC

• Data Interpretation: An increase in exchange BTC balances indicates rising selling pressure in the market, which may further suppress BTC prices in the short term.

• Market Logic: Typically, when BTC flows out of exchanges (decreases), it signifies that investors are transferring assets to cold wallets, indicating increased bullish confidence. Conversely, an increase in exchange BTC may suggest that investors are willing to sell, leading to heightened market selling pressure.

• Short-term Impact: If BTC balances continue to rise, the market may still face certain selling pressure, and attention should be paid to the flow of funds in the coming days.

7. Conclusion: Short-term still carries adjustment risks, but may present mid- to long-term layout opportunities

Based on the analysis of the above key indicators, we can draw the following conclusions:

1. Market sentiment is low, and short-term fluctuations may still occur;
2. US market demand is declining, and institutional buying power is weakening;
3. CME futures gap remains unfilled;
4. Short-term selling pressure in the market is increasing, with bearish sentiment still prevailing;
5. Long-term funds may find buying opportunities;
6. Market leaders are shorting, and short-term volatility may intensify.

📉 Short-term Outlook: There is still a risk of further adjustments; pay attention to the breakout of the 45-minute custom cycle moving average. If it fails to hold, watch for support at $88,000 and $86,000. If it breaks through, focus on $90,230 (EMA52 moving average resistance).

📈 Mid- to Long-term Outlook: The release of extreme fear sentiment and MVRV approaching historically favorable buying zones may present an opportunity for institutional funds to gradually position themselves if BTC enters the $80,000 range.

Recommended Reading

“Investor Sentiment: Interpretation of Long-Short Positions”

“Coinbase Premium Insights into US Market Funds”

CME gap tracking: https://www.aicoin.com/link/script-share/details?shareHash=8ZNanNA77A45gM9b

The above content is for sharing and reference only and does not constitute any investment advice. If you have any questions, feel free to join the 【PRO CLUB】 group to discuss with the editor~

Please recognize AiCoin's official website: www.aicoin.com

Telegram: t.me/aicoincn

Twitter: x.com/AiCoinzh

Email: support@aicoin.com

Group chat: Customer Service Yingying, Customer Service KK

免责声明：本文章仅代表作者个人观点，不代表本平台的立场和观点。本文章仅供信息分享，不构成对任何人的任何投资建议。用户与作者之间的任何争议，与本平台无关。如网页中刊载的文章或图片涉及侵权，请提供相关的权利证明和身份证明发送邮件到support@aicoin.com，本平台相关工作人员将会进行核查。