Abstract

BTC fell below the key position, falling as low as $74,000.

Although the increased trading volume seems lively, many people are actually fleeing in panic.

Now, regardless of spot or contract, market sentiment has fully shifted into "defensive mode".

One minute highlights

• Bulls are completely discouraged: BTC fell below the November low and retreated to US$74,000. The RSI indicator that measures the strength of the increase directly "lay flat". The bulls have been stunned and it will be difficult to organize an effective counterattack in the short term.

• Not buying the bottom: The rising trading volume shows that this is more of a panic market "cutting each other" and cutting flesh, rather than the main funds firmly accumulating funds at the bottom.

• Institutions are still "running away": ETFs are still bleeding out $1.5 billion a week. The smashing force in the spot market still crushes buying orders, and there is no sign of big funds entering the market to protect the market.

• Leveraged funds defected: Not only did people who played contracts dare not borrow money to bet on the rise, but a group of radical funds were actively shorting and smashing the market, exacerbating the decline.

• The entire network is being tricked: Only 60% of the money-making chips in the market are left. The entire network is already at a huge loss when calculating the general ledger. The mentality of currency holders is being tested to the limit.

A complete "discouragement"

As BTC prices failed to hold the November low, the market's upward momentum has completely collapsed. The most intuitive manifestation is the plunge of the RSI indicator.

RSI represents the enthusiasm of the market, which means that the power of bulls has been exhausted in the short term.

Although the BTC spot trading volume seems to have increased, this is not because everyone is actively buying the bottom, but because of the false prosperity caused by panic stops and passive changes of hands during the price decline.

• Price Momentum (RSI): The 14-day RSI indicator fell off a cliff from 40.7 to 15.5 (a drop of 61.8%). This is a measure of pricefading momentum.

  Just like a car suddenly running out of gas while climbing a hill, the value falling to 15.5 indicates that the bulls have completely exhausted their strength and the market has entered an extremely oversold state.

  Unless the sellers run out of steam, it's hard to see a decent rally.

  Price Momentum RSI

• Spot trading volume: Trading volume increased from $9.28 billion to $12.28 billion (up 33.4%).

  This representsmarket activity.

  In this market situation, an increase in volume and a decrease in price usually means "panic selling", that is, sellers sell the market regardless of the cost in order to leave the market.

  This is usually not a good thing. It means that although the changes of hands are positive, they are all leaving the market at a low position.

  Spot trading volume

Who is going crazy?

The situation in the spot market remains ugly.

The most critical "spot CVD" indicator (how many real BTC were bought and sold during this period) hit a new low, which is a direct confirmationThe current decline is completely led by sellers.

Although the outflow rate of ETF funds has slowed down a little, the overall flow is still "outflowing", and institutional funds have not stopped retreating.

Even if trading volume is increasing, it is more of a rotation of risk assets rather than a firm buy signal.

• Spot CVD (net difference between purchases and sales): This indicator further deteriorated from negative $144 million to negative $286 million.

  This indicator measuresbuying and selling initiative. The greater the negative value, it means that sellers are much more powerful in smashing orders than buyers are in placing orders, and short sellers have the absolute right to speak.

  Spot CVD

• Net flow of ETF funds: Weekly net outflow was slightly revised from $1.57 billion to $1.50 billion.

  This reflectsthe attitude of traditional institutional funds. Although the outflow amount is a little less than last week, the continuous large blood loss shows that big funds are still withdrawing from safety.

  Net flow of ETF funds

• ETF position MVRV: dropped from 1.59 to 1.33. This is a measure of the average profit level for ETF investors.

  The decline in the numerical value shows that the profits of this group of "regular troops" are being rapidly eroded, and the pressure on holding positions is increasing.

• Points worth paying attention to:

  The Binance SAFU fund address quietly bought 1,315 BTC worth US$1.3 billion on February 2, quietly buying the bottom while everyone was panicking.

  Binance purchased 1,315 BTC

Bulls collectively "give in"

Contract players are very careful now and are undergoingdeleveragingoperations.

No one is willing to borrow money to bet on a rebound, and interest costs are also falling.

In particular, the selling pressure on perpetual contracts is increasing, which shows that leveraged funds are not only retreating, but some people are even shorting backhand.

• Futures open interest: fell to $29.2 billion from $29.8 billion (down 2.3%).

  This representsmarket leverage. The decline in open interest indicates that everyone is liquidating their positions, and there is less money in the market that has not yet been settled, so no one dares to play too enthusiastically.

  Futures positions

• Perpetual Contract CVD: Expanded from negative $831 million to negative 983 million .

  This is the position interest paid by longs to shorts in order to maintain their positions.

  The decline in interest rates shows that everyone is less willing to be bullish and no longer willing to spend big money to bet on rising prices.