Dear friends, I am Sister Qinglan. The market situation in the early morning must have kept many friends awake all night. Bitcoin plunged sharply, breaking through the $77,000 threshold, with liquidations totaling $527 million within an hour, leaving bulls severely battered. At the same time, a whale sold $35.73 million in WBTC within three days, and still holds over $100 million in assets on-chain, exacerbating market panic. These two significant negative factors combined directly breached the psychological defense line of short-term bulls. At Qinglan Crypto Classroom, we have always emphasized that data does not lie, and panic emotions often accompany an acceleration in trends. Today we will use data to analyze whether this drop is a short-term shakeout or a trend reversal.

Current Price and Time

The current time is May 18th, 10:44, and the latest price of BTC is 76,862 USDT, with a 24-hour decline of 0.88%. The Fear and Greed Index has dropped to 27, indicating extreme fear. Is this position an opportunity or a trap? Let's take a look further.

Multi-Cycle Status Overview

First, let's look at the daily chart. Daily MA5=78,534, MA10=79,712, MA30=78,566, with the price of 76,862 falling below all these moving averages; the short-term moving average system has formed a bearish arrangement. Daily MACD bar -669.01, DIF and DEA have diverged after crossing, and RSI=39.39, is in the weak zone. On the daily level, the bearish trend is clear.

At the 4-hour level. 4-hour MA5=77,840, MA10=78,005, MA30=79,222, with the price of 76,862 well below all moving averages. MACD bar -105.29, DIF=-709.83, DEA=-604.55, in a dead cross, and DIF and DEA's gap is widening. RSI=22.42, has entered the oversold area. At the 4-hour level, bearish momentum remains strong, but the oversold signal indicates the short term has a demand for rebound.

At the 1-hour level. 1-hour MA5=77,327, MA10=77,809, MA30=78,025, with the price of 76,862 also below the moving averages. MACD bar -129.03, DIF=-279.28, DEA=-150.26, in a dead cross. RSI=20.20, extremely oversold. At the 1-hour level, the bears dominate, but the degree of overselling deepens, indicating that a technical rebound may occur at any time.

At the 15-minute level. 15-minute MA5=77,003, MA10=77,036, MA30=77,731, with the price of 76,862 hovering near MA5 and MA10, but still below MA30. MACD bar -25.13, DIF=-307.44, DEA=-282.31, dead cross but the bar is shortening, RSI=29.78, showing a slight recovery from the oversold area. At the 15-minute level, bearish momentum has weakened, showing signs of stabilization in the short term.

TPV Signal Verification

Now let's verify with the TPV system from Qinglan Crypto Classroom. 1-hour EMA55=78,438.71, and the current price of 76,862 is well below EMA55. In the past 8 1-hour candlesticks, the closing prices greater than EMA55 occurred 0 times, and the crossing occurred 0 times, with the absolute distance from EMA55 being 2.01%, not meeting the oscillation threshold, belonging to a unidirectional bearish trend.

Short Selling Condition Verification: First, the price is pressured below the 1-hour EMA55, with two consecutive 1-hour candlesticks closing below EMA55, meeting the conditions. Second, pressure meets resistance. During the sharp drop in the early morning, the price formed a long upper shadow near 77,000 before continuing downward, constituting an effective high-point pullback, fulfilling the conditions. Third, the rebound is weak; the MACD bar has shortened for two consecutive periods, but note that even though the MACD bar has shortened, DIF and DEA are still diverging downwards, and RSI has risen from 20.20 to 29.78, indicative of technical repair after overselling, not an increase in rebound momentum. Overall, bearish trend is confirmed, but the overselling signal suggests it's not advisable to short aggressively.

On-Chain/Fundamentals

In terms of on-chain data, the Fear and Greed Index is at 27, indicating extreme fear. BTC's market share is 58.3%, indicating that funds are still concentrating on BTC, but overall market sentiment is pessimistic. Bitcoin ETF saw a net outflow of 13,000 BTC last week, setting the worst record since February, as institutional funds continue to flow out. Whales selling WBTC still have significant holdings on-chain, with liquidation risk not alleviated. Geopolitical risks are intensifying with the U.S. and Israel restarting negotiations for military strikes against Iran, putting pressure on risk assets. These cumulative factors lead to a lack of confidence in bullish positions in the short term.

Key Attack and Defense Positions

The first resistance level above is at the 1-hour EMA55=78,438, which is the dividing line between bulls and bears. If the price rebounds to this level, it will face strong resistance. The second resistance level is at 4-hour MA5=77,840, which is the preliminary target for a short-term rebound. The first support level below is at 76,000, which is in the previous low area; if broken, the second support level is at the round number of 75,000. In extreme cases, if panic emotions spread, it may test 74,000.

Trading Strategy

Based on the TPV system, we are currently in a unidirectional bearish trend, but oversold levels are severe, making it inadvisable to short aggressively. The primary strategy is to short on rebounds, and avoid long positions.

Direction: Short.

Entry Conditions: Wait for the price to rebound to the vicinity of the 1-hour EMA55, specifically in the 78,400-78,500 range. If a long upper shadow or top fractal pattern appears, and the MACD bar expands again, a short entry can be made. If the price directly breaks below 76,000, abandon the rebound shorting strategy and wait for stabilization signals.

Stop Loss Level: Set above 79,000; if it breaks through EMA55 and stabilizes above it, the short position becomes invalid.

Target Levels: First target 76,000, second target 75,000. If the price shows large volume stalling or bottom fractals near 76,000, partial profit-taking can be considered.

Risk Warning

The current market is in extreme panic, with amplified volatility; all trades must rigorously control position sizes, and risk for a single trade should not exceed 2% of total funds.

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