In this life, we stubbornly exist in the way we like, and we long for those who walk alongside us to interpret the rhythm of life in the same way. However, for the sake of livelihood, love, and dreams, we slowly change and lose our original selves through countless frictions and collisions, thus missing out on many beautiful moments like fireworks!
The market yesterday was expected to definitely decline; in fact, what we hoped to see was a fluctuating decline, but unexpectedly, a direct downward trend appeared. Currently, the market low has reached around 108600, very close to the previous pullback cycle low. Following this trend, we may need to adjust our targets for the upcoming market. There’s not much to say about operations; we made profits from shorting, but a short position placed below 110000 was directly stopped out. The last two times, short positions were also stopped out, indicating that market sentiment has indeed changed, and going long has become relatively riskier.
Returning to today’s market, the old rule is to first observe the distribution of liquidity. Recently, the market seems to be deviating from the usual liquidity patterns, leaning towards a short-term unilateral liquidation model. Today, there has been some change in liquidity; after a quick drop, a large amount of bullish liquidity has started to gather below, suggesting that bulls are entering near the previous low. However, according to the previous upward phase of the market, such behavior is likely to serve as fuel in a trending market, so we will wait and see. Currently, the bullish liquidity is mainly located near the previous pullback low of 107600. If the downward liquidation continues, it could reach around 106000. Meanwhile, the newly appeared short-term high leverage short liquidity is around 110500 and 111500, which could be the most likely positions to be liquidated if a short-term fluctuation occurs and rebounds upwards. Regarding spot premiums, the negative premium that appeared yesterday should serve as a market warning because at the same price level yesterday, the previous time it reached that point, the premium did not significantly drop and remained positive. However, yesterday it began to show a negative premium, indicating increased market selling, and the market ultimately experienced a direct decline. Currently, the premium has returned to positive, and with the proximity to the previous low, it is clear that some funds are using this as support to enter the market. However, in terms of price, the rebound lacks strength, so it is likely that we will continue to see a pullback.
On the technical side, a large bearish candlestick was formed on the daily chart. We have been saying that the daily cycle is in a bearish structure, and with another large bearish candlestick appearing in this structure, if it breaks the previous pullback cycle low, it can basically confirm that we are in the third wave pullback from the high. The subsequent focus will be on confirming the low of this wave, with the ideal situation being to maintain above 104000. The technical indicators are similar to yesterday, with not much to observe.
On the four-hour chart, the market has shown signs of bottoming out. However, from the chart, there is an expectation of a bottom divergence forming on the short-term MACD, provided that the market does not continue to decline in the short term, but instead fluctuates or has a small rebound to complete the MACD cycle of this bearish period. Then, there will be a process of indicator recovery for the bottom divergence. Currently, at this position, any movement seems reasonable.
In terms of operations, it’s a bit tricky in the short term. Personally, I hope for a rebound at this position, so that after the indicators are repaired and the short liquidity is liquidated, we can see more bullish liquidity below, which also aligns with the larger bearish structure. After all, there is buying power to bottom out after this decline, so a rebound followed by another decline would be more appropriate. If there is another decline here, it will be difficult to judge the short-term bottom. Therefore, in terms of operations, if there is a rebound above 110500, we can consider shorting, and at 111500, we can add to our position. After the rebound, if it declines again, we will look for lower targets. For going long, if it continues to decline from this position, we can consider around 108000 in the short term, but the relative risk will be higher.
【The above analysis and strategies are for reference only. Please bear the risk yourself. The article is subject to review and publication, and market conditions change in real-time. The information may be outdated, and specific operations should follow real-time strategies. Feel free to contact us for market discussions.】
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