Yesterday, the market's focus was mainly on precious metals, with gold and silver experiencing a very rare sharp decline in a short period. Such a level of rapid pullback is uncommon in the precious metals market.
Recently, many friends have been paying attention to, and even participating in, spot and futures trading of gold and silver, and many have asked me to share my views on this market movement.
- Current Status of Bitcoin
After a significant drop in the past two days, Bitcoin has shown some rebound at the bottom, but structurally, there is no clear support formed, and there is no obvious demand emerging below. Therefore, my overall view on Bitcoin remains bearish.
Recently, I have also showcased some medium to long-term short positions in the channel, such as Ethereum at the key resistance level around 3,050, with the corresponding entry price at 3,047.96, which is exactly the high point of the previous rebound.
For Bitcoin, there are also short positions laid out around 88,000–89,000 and near 97,000. The position near 97,000 is very close to the top, as the highest point is over 97,900, with the entry price at 97,500, which is already very extreme.
The short position around 95,000 is relatively more reasonable, as once the rebound breaks through the previous high of 94,000, it will significantly increase the risk of a pullback.
- Take Profit and Position Management
Regarding this round of decline, my advice remains to take profit in batches and exit in stages. In such a market where fluctuations can reach thousands of points, the profit space is already relatively ample.
After taking some profit, the remaining position needs to lower the stop-loss instead of continuing to place the stop-loss at the opening price. As long as the stop-loss position is below the opening price, even if it gets hit, the overall result will still be profitable, just with a smaller profit.
This method is more beneficial for reducing profit retracement and risk exposure while betting on a larger downward space.
- Subsequent Structural Judgment of Bitcoin
From a structural perspective, my judgment on the trend has not changed. The key low point ahead at 80,500 has not been effectively broken, and in the futures market, such a low point, if not breached, often indicates that there is still room for further downward movement.
Therefore, I believe the probability of this position being broken next week is relatively high. As for whether it will continue the bearish trend after breaking or rebound and then adjust, it is currently uncertain, and we can only wait for the market to unfold.
From past trends, there have been multiple instances where a low point was breached, leading to liquidation before a rebound occurred. If a more thorough liquidation of the bulls is to take place, it usually requires setting a new low first.
- How to Judge Whether a Rebound Constitutes a Reversal
What really needs attention is the strength of the rebound after the low point is breached.
I usually observe the 0.5–0.618 range of the entire downward segment, which can be seen as the structural midpoint:
If the rebound can effectively break through and stabilize in this area, the probability of the trend strengthening or even reversing will significantly increase;
If it cannot break through, this range is likely to remain resistance, and the market may continue downward.
Assuming the low point of this round of decline is around 79,000, then if the subsequent rebound is blocked and falls back in the 0.5–0.618 range, it may instead become an entry opportunity for the next bearish phase; if it effectively breaks through, it will then provide conditions for right-sided bulls.
- Views on Gold and Silver
The decline in gold and silver yesterday was indeed very unusual. Personally, my position in silver's spot market is relatively small and currently still in a floating profit state, so the impact is relatively limited.
From a technical perspective, I tend to believe that this rapid decline is mainly a liquidation of leverage in the futures market, rather than a typical behavior of the main force offloading. True main force exits usually unfold in a gradual decline rather than triggering panic with a sharp drop.
Of course, we cannot completely rule out the possibility of a subsequent gradual decline, but at present, the probability of a main force exit is not high.
- Differences Between Gold and Silver
Gold's decline in this round is over 10%, which is still within an acceptable range; while silver's decline exceeds 30%, which has a significantly greater impact on market sentiment.
This means that the sentiment recovery period for silver will be longer. Even if gold sets a new high later, the pace of silver's rise may be significantly lagged, and it is more likely to repair market confidence through prolonged consolidation.
- Summary
In summary, whether it is Bitcoin, gold, or silver, there are currently no typical characteristics of main force offloading. The sharp drop is more a release of emotions and leverage, and does not necessarily mean that the trend has completely reversed.
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