The selling pressure is indeed fierce, but bottom fishers are genuinely buying.

Written by: Blockchain Knight

Bitcoin has dropped significantly this time, but the bears have put themselves in an awkward position.

ETF funds are continuously flowing out, miners are dumping coins into exchanges, and short-term traders are taking losses; three forces are pressing down simultaneously, with the price pinned near $63,000.

It has fallen 13% in the past week and 21% in a month, nearly halving from its historical high.

Interestingly, in this round of downswing, the bears have gotten overly excited; the market's short-to-long ratio has reached as high as 8 times, with nearly $100 billion in short positions piled above. What does this mean?

As long as the selling pressure eases even slightly, even if just temporarily, those betting on a decline will be forced to close their positions by buying back, leading to a mechanical short squeeze.

A similar structure appeared in November 2022, and Bitcoin rose by 24% in the following two weeks.

Of course, the reasons for the sell-off are quite tangible. Spot ETFs are bleeding continuously, with $5.4 billion flowing out over 20 days, setting a short-term record.

Short-term holders transferred 53,000 Bitcoin at a loss directly into exchanges within a day. Miners moved 24,000 Bitcoin to BN, marking a six-month high.

At the same time, AI-related tech stocks are still too enticing; the capital market has invested $400 billion in AI infrastructure development over the past six months, and institutions are reallocating their funds, withdrawing from Bitcoin ETFs to chase hotspots like SpaceX and Anthropic.

However, on the other side, data shows that experienced hands are also catching the falling knife. Long-term holders have increased their holdings by 200,000 Bitcoin within a month, totaling close to historical highs.

Since 2023, institutions and mining companies have absorbed 1.24 million Bitcoin, roughly equal to Satoshi Nakamoto's total holdings. Yet the price remains suppressed, indicating that selling pressure is indeed fierce, but bottom fishers are genuinely buying.

The current key watches two things. One is the range of $67,000 to $70,000, which is the peak of 2021 and the breakout point for 2024. If it can quickly recover, it indicates that this wave is merely a cleaning of leverage; if it cannot regain, then it will test the $60,000 and even $55,000 territories.

The other is the flow of ETF funds; the marginal buyer of Bitcoin right now is the ETF channel. If money continues to flow toward new targets like AI and SpaceX, Bitcoin will find it hard to take off on its own.

The market is currently clearly polarized, with the S&P 500 continuously reaching new highs driven by AI, while Bitcoin is getting hammered alone. DeFi hasn't been much help either; total locked value has dropped from $173 billion to $73.9 billion, and the engine of retail speculation has basically stalled.

If Bitcoin can build a bottom in the $60,000 to $58,000 range, ETF outflows will continue for a while, AI will keep attracting funds, and the price will repeatedly test support. It won't collapse, but rebounds will be very grindy.

There's also a less likely scenario where fund flows suddenly reverse, Bitcoin rallies back to $70,000, shorts get forced out, and it quickly bounces back above $76,000.

It must be said that the current spot selling pressure is genuinely present, but short positions are quite crowded. In the short term, who wins will depend on when the selling stops. Even just a pause will cause this compressed spring to snap back.

However, there's another issue that warrants caution: can the U.S. stock market really keep climbing? If the U.S. stock market experiences a brief pullback, how will Bitcoin react? Will it once again miss the chance to profit while being hit timely?

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。