QUICK NOTE ABOUT TELEGRAM ADS
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Good morning everyone.
I’ve noticed Telegram is placing ads inside the channel for random things.
Please do not click them.
I cannot see the ads myself, and it looks like different people may be shown different adverts. But from what I understand, Telegram places these ads automatically unless the channel has enough boosts or pays to remove them.
So if you have Telegram Premium and you can boost the channel, that would be appreciated. It should help reduce or remove these annoying ads from the group.
My concern is simple: I do not know what adverts Telegram is showing you, and I do not trust that every advert will be properly vetted. Some of them could easily be scams.
So please be careful.
If you see an advert in this channel, assume it has nothing to do with me, nothing to do with the group, and do not click it.
Now, with that out of the way, I’m going to post today’s Bitcoin analysis breakdown.
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Good morning everyone.
I’ve noticed Telegram is placing ads inside the channel for random things.
Please do not click them.
I cannot see the ads myself, and it looks like different people may be shown different adverts. But from what I understand, Telegram places these ads automatically unless the channel has enough boosts or pays to remove them.
So if you have Telegram Premium and you can boost the channel, that would be appreciated. It should help reduce or remove these annoying ads from the group.
My concern is simple: I do not know what adverts Telegram is showing you, and I do not trust that every advert will be properly vetted. Some of them could easily be scams.
So please be careful.
If you see an advert in this channel, assume it has nothing to do with me, nothing to do with the group, and do not click it.
Now, with that out of the way, I’m going to post today’s Bitcoin analysis breakdown.
❤7🔥4
BITCOIN FUNDING RATE CHECK
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Starting today with the Bitcoin funding rates.
Looking at the funding data, we can see funding is starting to move back in the direction of green again. In yesterday’s data, there was a lot more white on the screen, which showed funding moving closer to neutral and slightly more positive.
Today, the green is starting to return, which tells us funding is shifting back towards the negative side again.
To be clear, funding is not negative across every exchange. That is not the main point here. What matters more is the direction of travel, and right now the direction is starting to lean back towards bearish pressure.
This gets especially interesting when we compare it to the period between February 3rd and February 8th, 2026.
On the Bitcoin open interest weighted funding rate chart, we can see that during that period, Bitcoin price was moving lower while open interest weighted funding first ran up aggressively, then dropped sharply afterwards.
That chop in funding matched the chop in price.
Now, we are seeing a similar setup again. Bitcoin open interest weighted funding is still dropping meaningfully, and the structure going into this looks very similar to the end of January, which I’ve highlighted on the chart.
At the end of January, funding had been thick and green for a while. Then it briefly dipped red, and during that period, Bitcoin dropped from around $86,500 down to about $81,000.
After that, the market was met with another aggressive wave of green, followed by more red, and price kept getting chopped up inside that range.
That is exactly what this current setup looks like it may be preparing for again.
So the read here is fairly simple.
If Bitcoin was going to close the CME gap quickly, we probably should have seen more strength by now. Instead, funding is starting to turn back towards the bearish side, open interest weighted funding is rolling over, and the structure is beginning to look like shorts are taking control again.
That does not mean price drops in a straight line. It means the market is starting to look choppy, heavy, and increasingly controlled by the bears.
For now, the funding data supports the idea that the short positions are starting to take back control.
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Starting today with the Bitcoin funding rates.
Looking at the funding data, we can see funding is starting to move back in the direction of green again. In yesterday’s data, there was a lot more white on the screen, which showed funding moving closer to neutral and slightly more positive.
Today, the green is starting to return, which tells us funding is shifting back towards the negative side again.
To be clear, funding is not negative across every exchange. That is not the main point here. What matters more is the direction of travel, and right now the direction is starting to lean back towards bearish pressure.
This gets especially interesting when we compare it to the period between February 3rd and February 8th, 2026.
On the Bitcoin open interest weighted funding rate chart, we can see that during that period, Bitcoin price was moving lower while open interest weighted funding first ran up aggressively, then dropped sharply afterwards.
That chop in funding matched the chop in price.
Now, we are seeing a similar setup again. Bitcoin open interest weighted funding is still dropping meaningfully, and the structure going into this looks very similar to the end of January, which I’ve highlighted on the chart.
At the end of January, funding had been thick and green for a while. Then it briefly dipped red, and during that period, Bitcoin dropped from around $86,500 down to about $81,000.
After that, the market was met with another aggressive wave of green, followed by more red, and price kept getting chopped up inside that range.
That is exactly what this current setup looks like it may be preparing for again.
So the read here is fairly simple.
If Bitcoin was going to close the CME gap quickly, we probably should have seen more strength by now. Instead, funding is starting to turn back towards the bearish side, open interest weighted funding is rolling over, and the structure is beginning to look like shorts are taking control again.
That does not mean price drops in a straight line. It means the market is starting to look choppy, heavy, and increasingly controlled by the bears.
For now, the funding data supports the idea that the short positions are starting to take back control.
👍10
BITCOIN LIQUIDATION HEAT MAP ANALYSIS
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Now let’s move on to the Bitcoin liquidation heat map for today.
Starting with the 24-hour heat map, we can see liquidity sitting both above and below the current Bitcoin price. There is a decent range above, but the more attractive level right now appears to be just below price, sitting slightly above the $76,500 area that I pointed out earlier.
If Bitcoin loses $76,500, I think the move lower could happen very quickly. That is why I’ve drawn the arrow straight down on the chart. If that level breaks, the market could flush hard into the next downside range.
Moving over to the 48-hour heat map, the picture is similar, but slightly different. The liquidity below price is not quite as thick as it looks on the 24-hour chart, but that is because it is newer liquidity. It has formed more recently, and the longer it sits there, the more attractive it becomes as a target.
The important thing here is timing.
On the 48-hour chart, the liquidity above current price started forming more than 24 hours ago. That tells us those upside levels have been sitting there for a while. But the downside liquidity has built more recently, especially as traders opened long positions during yesterday’s bounce.
You can see this clearly in the middle of the chart, where price was moving back up and longs started entering the market. As those long positions opened, the lower liquidation band started getting thicker. I’ve marked this with the arrow and my very crude “thicker” label on the chart.
The reason that matters is simple: when price goes up and traders open leveraged longs, those long positions create downside liquidation levels. If price starts reversing, those fresh high-leverage longs become very attractive targets for the market to take out.
That is why this lower range is important. It is fresh liquidity, it is likely highly leveraged, and if price starts moving into it, liquidations can happen quickly.
This is exactly what I mean when I say futures can determine short-term direction, but spot determines the longer-term trend.
Futures positioning can push price around over hours or days. But if spot demand is weak, those futures-led pumps tend not to last.
That is why the next thing we need to analyse is Bitcoin spot volume versus futures volume. We need to understand where the volume is actually coming from. If futures volume is strong but spot volume is dropping off again, then this pump becomes much harder to trust.
Now, moving to the one-week Bitcoin liquidation heat map, we can see major levels above and below price. There is a particularly important level around $76,500, and that level has been building aggressively since around the 19th. It is now the 22nd, so this liquidity has had roughly three days to develop.
That is not something to ignore.
A lot of that comes from fresh long positions opened during this range, and if Bitcoin starts breaking down, that level becomes an obvious target.
Above price, there is still liquidity, but a lot of the closer upside short liquidity has already been partly eaten by the recent move. So we have to ask whether the higher levels, including the area around $81,000 and the open CME gap above, are attractive enough to pull price higher before the downside liquidity gets taken.
That is the real question.
But we cannot draw a proper conclusion from the heat map alone. Before deciding anything, we need to analyse the spot data and understand whether real demand is entering the market, or whether this move is being driven mostly by futures positioning.
That is the point of doing this analysis every day.
Yes, we have open positions, but the goal is not to force the data to agree with the trade. The goal is to approach the market with a neutral slate, test both sides, and work out what the numbers are actually telling us.
If the data says we are wrong, we change.
If the data confirms the trade, we hold.
That is how you stay correct.
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Now let’s move on to the Bitcoin liquidation heat map for today.
Starting with the 24-hour heat map, we can see liquidity sitting both above and below the current Bitcoin price. There is a decent range above, but the more attractive level right now appears to be just below price, sitting slightly above the $76,500 area that I pointed out earlier.
If Bitcoin loses $76,500, I think the move lower could happen very quickly. That is why I’ve drawn the arrow straight down on the chart. If that level breaks, the market could flush hard into the next downside range.
Moving over to the 48-hour heat map, the picture is similar, but slightly different. The liquidity below price is not quite as thick as it looks on the 24-hour chart, but that is because it is newer liquidity. It has formed more recently, and the longer it sits there, the more attractive it becomes as a target.
The important thing here is timing.
On the 48-hour chart, the liquidity above current price started forming more than 24 hours ago. That tells us those upside levels have been sitting there for a while. But the downside liquidity has built more recently, especially as traders opened long positions during yesterday’s bounce.
You can see this clearly in the middle of the chart, where price was moving back up and longs started entering the market. As those long positions opened, the lower liquidation band started getting thicker. I’ve marked this with the arrow and my very crude “thicker” label on the chart.
The reason that matters is simple: when price goes up and traders open leveraged longs, those long positions create downside liquidation levels. If price starts reversing, those fresh high-leverage longs become very attractive targets for the market to take out.
That is why this lower range is important. It is fresh liquidity, it is likely highly leveraged, and if price starts moving into it, liquidations can happen quickly.
This is exactly what I mean when I say futures can determine short-term direction, but spot determines the longer-term trend.
Futures positioning can push price around over hours or days. But if spot demand is weak, those futures-led pumps tend not to last.
That is why the next thing we need to analyse is Bitcoin spot volume versus futures volume. We need to understand where the volume is actually coming from. If futures volume is strong but spot volume is dropping off again, then this pump becomes much harder to trust.
Now, moving to the one-week Bitcoin liquidation heat map, we can see major levels above and below price. There is a particularly important level around $76,500, and that level has been building aggressively since around the 19th. It is now the 22nd, so this liquidity has had roughly three days to develop.
That is not something to ignore.
A lot of that comes from fresh long positions opened during this range, and if Bitcoin starts breaking down, that level becomes an obvious target.
Above price, there is still liquidity, but a lot of the closer upside short liquidity has already been partly eaten by the recent move. So we have to ask whether the higher levels, including the area around $81,000 and the open CME gap above, are attractive enough to pull price higher before the downside liquidity gets taken.
That is the real question.
But we cannot draw a proper conclusion from the heat map alone. Before deciding anything, we need to analyse the spot data and understand whether real demand is entering the market, or whether this move is being driven mostly by futures positioning.
That is the point of doing this analysis every day.
Yes, we have open positions, but the goal is not to force the data to agree with the trade. The goal is to approach the market with a neutral slate, test both sides, and work out what the numbers are actually telling us.
If the data says we are wrong, we change.
If the data confirms the trade, we hold.
That is how you stay correct.
👍7
Even yesterday, the analysis was right. I closed the trade because I needed to sleep, which is frustrating because the trade would have paid. But to be fair, I did actually reopen it before bed because I struggled to ignore the setup after waiting for it all day.
That is the reality of trading with conviction. When the analysis is strong and the setup is there, it becomes difficult to pass on the opportunity.
But we also have to be careful not to let conviction turn into overconfidence.
That is why we test the bias every day.
That is the reality of trading with conviction. When the analysis is strong and the setup is there, it becomes difficult to pass on the opportunity.
But we also have to be careful not to let conviction turn into overconfidence.
That is why we test the bias every day.
👍10
Forwarded from TMG CHAT
BITCOIN VOLUME OVERVIEW
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There is nothing bullish in the Bitcoin volume overview right now.
Futures volume is up 9.72%, but spot volume is down 4.09%.
That tells us people are not aggressively selling spot Bitcoin here, but they are also not buying it. There is no real spot demand for the dip, and there is no panic spot selling either.
This is no man’s land.
We have been talking about this since starting Chart Advantage. The market is stuck in that awkward zone where price is moving, but the underlying spot market is not giving strong conviction either way.
Now, futures volume being up 9.72% looks good on the surface, but you always have to ask: what side of the volume is increasing?
Looking at futures taker buy versus taker sell, the answer is clear. Sell-side taker volume is leading.
Over the past 24 hours, 50.65% of futures taker volume has been sell-side.
On spot, taker sell volume is also leading at around 50.5%.
So there is slightly more aggressive selling on futures than on spot, but both markets are leaning sell-side.
This is not a contradiction with what I’ve said before about longs being opened. You have to understand the difference between the overall market and taker volume.
Taker orders are market orders.
Maker orders are limit orders.
Right now, the traders hitting the market aggressively are leaning sell-side. They are not patiently placing limit orders; they are actively selling into the market.
That drags price down.
And on spot volume, taker sell pressure is one of the most important metrics because it shows whether people are actually buying the underlying asset or dumping it.
Right now, spot is not giving us strong demand.
The Bitcoin price versus volume history chart makes this clearer.
When spot volume recently dropped this low, there are two useful comparisons. Around May 9th and 10th, we had an uptick in volume and an uptick in price. That is the exception.
The better comparison is the period where Bitcoin dropped from around $79,000 to $78,000. During that move, volume spiked, then started falling again. That looks much more similar to what we are seeing now.
The key point is this: recently, most major volume spikes have come with price moving down, not up.
A big spike in volume has generally meant a big move lower. I’ve highlighted those examples in blue on the chart. The light blue one is the main exception where volume moved up with price.
This is why trading is probabilities, not certainty.
But based on the recent pattern, if we see another volume surge soon, I would not automatically assume it is bullish. More often than not recently, volume spikes have been linked to downside moves.
So from the volume history, this does not look bullish. It looks bearish.
Now moving to Bitcoin volume distribution, spot currently makes up around 6.8% of total Bitcoin volume, while futures make up 93.2%.
Earlier this month, spot was above 7%. Now it is down to 6.8%.
That tells us spot participation is fading relative to futures.
Futures drive the market short term.
Spot drives the market long term.
From this, nothing is getting better. Nothing is collapsing either, but there is still no evidence of strong spot demand returning.
The final chart is Bitcoin price with aggregated open interest underneath.
This one is very clear.
Open interest is going down while price is going up.
When price rises and open interest falls, it usually means shorts are closing and taking profit. That can push price up, but it is not the same as fresh long exposure entering the market.
So this muddies the water.
The move up may not be genuine bullish demand. It may just be short covering.
before we can be properly confident in the next trade, we need to compare this with Ethereum data, then map the Bitcoin levels above and below.
The market is not giving a clean answer yet.
Spot demand is weak. Futures are still dominant. Taker volume is leaning sell-side. Open interest is falling while price rises.
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There is nothing bullish in the Bitcoin volume overview right now.
Futures volume is up 9.72%, but spot volume is down 4.09%.
That tells us people are not aggressively selling spot Bitcoin here, but they are also not buying it. There is no real spot demand for the dip, and there is no panic spot selling either.
This is no man’s land.
We have been talking about this since starting Chart Advantage. The market is stuck in that awkward zone where price is moving, but the underlying spot market is not giving strong conviction either way.
Now, futures volume being up 9.72% looks good on the surface, but you always have to ask: what side of the volume is increasing?
Looking at futures taker buy versus taker sell, the answer is clear. Sell-side taker volume is leading.
Over the past 24 hours, 50.65% of futures taker volume has been sell-side.
On spot, taker sell volume is also leading at around 50.5%.
So there is slightly more aggressive selling on futures than on spot, but both markets are leaning sell-side.
This is not a contradiction with what I’ve said before about longs being opened. You have to understand the difference between the overall market and taker volume.
Taker orders are market orders.
Maker orders are limit orders.
Right now, the traders hitting the market aggressively are leaning sell-side. They are not patiently placing limit orders; they are actively selling into the market.
That drags price down.
And on spot volume, taker sell pressure is one of the most important metrics because it shows whether people are actually buying the underlying asset or dumping it.
Right now, spot is not giving us strong demand.
The Bitcoin price versus volume history chart makes this clearer.
When spot volume recently dropped this low, there are two useful comparisons. Around May 9th and 10th, we had an uptick in volume and an uptick in price. That is the exception.
The better comparison is the period where Bitcoin dropped from around $79,000 to $78,000. During that move, volume spiked, then started falling again. That looks much more similar to what we are seeing now.
The key point is this: recently, most major volume spikes have come with price moving down, not up.
A big spike in volume has generally meant a big move lower. I’ve highlighted those examples in blue on the chart. The light blue one is the main exception where volume moved up with price.
This is why trading is probabilities, not certainty.
But based on the recent pattern, if we see another volume surge soon, I would not automatically assume it is bullish. More often than not recently, volume spikes have been linked to downside moves.
So from the volume history, this does not look bullish. It looks bearish.
Now moving to Bitcoin volume distribution, spot currently makes up around 6.8% of total Bitcoin volume, while futures make up 93.2%.
Earlier this month, spot was above 7%. Now it is down to 6.8%.
That tells us spot participation is fading relative to futures.
Futures drive the market short term.
Spot drives the market long term.
From this, nothing is getting better. Nothing is collapsing either, but there is still no evidence of strong spot demand returning.
The final chart is Bitcoin price with aggregated open interest underneath.
This one is very clear.
Open interest is going down while price is going up.
When price rises and open interest falls, it usually means shorts are closing and taking profit. That can push price up, but it is not the same as fresh long exposure entering the market.
So this muddies the water.
The move up may not be genuine bullish demand. It may just be short covering.
before we can be properly confident in the next trade, we need to compare this with Ethereum data, then map the Bitcoin levels above and below.
The market is not giving a clean answer yet.
Spot demand is weak. Futures are still dominant. Taker volume is leaning sell-side. Open interest is falling while price rises.
👍5🔥4❤1
OVERALL MARKET LONGS VS SHORTS
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Before moving on to Ethereum, I want to quickly point this out.
This is the overall crypto market longs versus shorts, not just Bitcoin.
Across the past 24 hours, there is roughly $1 billion more short exposure than long exposure.
Across the past 12 hours, there is around $200 million more shorts than longs.
Across the past 4 hours, there is around $100 million more shorts than longs.
Across the past 1 hour, there is again close to $100 million more shorts than longs.
So the actual positioning data is clearly not bullish. Traders are still leaning short across the market.
The reason I bring this up is because this is exactly why I do not trust simple sentiment indicators.
On the same website, there is a “current Bitcoin sentiment” poll showing 19% very bullish, 33% bullish, and only 28% bearish.
So more than half the people voting are bullish, while the real positioning data is showing more shorts than longs across every major recent timeframe.
That does not line up.
I am not saying we ignore sentiment completely, but this is why you cannot trade off that kind of data by itself. I do not know where they pull the sentiment sample from, but that is the kind of indicator that can make people lose money if they trust it blindly.
We do not trade off opinions.
We follow the money.
Right now, the money says the market is still positioned defensively, with more short exposure building across the wider crypto market.
Following the money is the edge. It is what I have been doing for years, and it is what I want everyone in this group to learn properly.
The goal here is not to become bullish or bearish by habit.
The goal is to read the market correctly, understand where the money is flowing, and become better traders because of it.
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Before moving on to Ethereum, I want to quickly point this out.
This is the overall crypto market longs versus shorts, not just Bitcoin.
Across the past 24 hours, there is roughly $1 billion more short exposure than long exposure.
Across the past 12 hours, there is around $200 million more shorts than longs.
Across the past 4 hours, there is around $100 million more shorts than longs.
Across the past 1 hour, there is again close to $100 million more shorts than longs.
So the actual positioning data is clearly not bullish. Traders are still leaning short across the market.
The reason I bring this up is because this is exactly why I do not trust simple sentiment indicators.
On the same website, there is a “current Bitcoin sentiment” poll showing 19% very bullish, 33% bullish, and only 28% bearish.
So more than half the people voting are bullish, while the real positioning data is showing more shorts than longs across every major recent timeframe.
That does not line up.
I am not saying we ignore sentiment completely, but this is why you cannot trade off that kind of data by itself. I do not know where they pull the sentiment sample from, but that is the kind of indicator that can make people lose money if they trust it blindly.
We do not trade off opinions.
We follow the money.
Right now, the money says the market is still positioned defensively, with more short exposure building across the wider crypto market.
Following the money is the edge. It is what I have been doing for years, and it is what I want everyone in this group to learn properly.
The goal here is not to become bullish or bearish by habit.
The goal is to read the market correctly, understand where the money is flowing, and become better traders because of it.
👏4❤3
ETHEREUM MARKET STRUCTURE CHECK
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Before we move on to the chart analysis, I want to look at Ethereum and what it is telling us about the wider market.
It feels like we are going to get a much clearer signal within the next hour or so. The market is compressing, volume is thin, and the next proper move should give us a better read on today’s direction.
Starting with Ethereum funding rates, there is one clear anomaly on the screen: KuCoin.
KuCoin is showing a much more bullish funding bias, and it is doing the same thing on XRP, HYPE, and Dogecoin. That matters because KuCoin has a large retail trading audience, and retail seems to be leaning heavily long on those markets.
But when we look at the bigger-money exchanges, the ones I’ve underlined in red, the picture is different. Most of those are neutral to bearish.
So I am not treating KuCoin as the main signal here. It looks more like an exchange-specific anomaly, likely caused by retail positioning and thinner liquidity.
Across the bigger venues, Ethereum funding does not look bullish. It looks neutral to bearish, which supports the downside case.
Moving to the 24-hour Ethereum liquidation heat map, the main level is around $2,100. Above current price, there is not much liquidity. Below current price, there is also not a huge amount, which tells us people are not trading ETH with much conviction right now.
Spot markets are weak. Futures are cooling off. Volume is falling.
Those are all bearish warning signs.
The 48-hour liquidation heat map gives a bit more detail. There is slightly more liquidity here, and I’ve highlighted an area where a small, shadowy liquidity pocket has formed. The last time Ethereum formed something similar on this timeframe, it did not take long for price to move into it and take it out.
So based on that chart, a short-term rise in ETH is still possible. I would not be surprised to see Ethereum attack the range I’ve boxed out before deciding the next real move.
The one-week liquidation heat map gives the clearest wider picture. There is more liquidity above price than below, and that liquidity has been building for longer.
On the surface, that sounds bullish.
But in a bearish market, that is also normal. When price trends lower, shorts build above price, and liquidation levels naturally stack overhead. So we cannot draw a clean bullish conclusion just because there is more liquidity above.
To make sense of the heat maps, we need to bring in open interest.
Ethereum open interest is no longer giving us the same clean signal it gave earlier in the week. Previously, we had a clear negative correlation: open interest was rising while price was falling. That suggested new short positions were entering the market and pushing price down.
That relationship changed around May 18th.
At that point, open interest dropped while price also dropped, which suggests a larger long position exited the market. Since then, we have not seen a major change in open interest or price. The market has mostly gone quiet, with volume, liquidity, and interest all dropping off.
This is why the CME gap is not enough by itself.
Yes, Bitcoin still has the CME gap around $79,000, but a CME gap is not magic. It is not a reason to trade by itself.
The CME gap trade works when the market has enough liquidity and volume to execute the move. When volume drops, liquidity drops, and participation dries up, that trade becomes much less reliable.
This is usually when CME gap trades fail.
So the Ethereum read is this:
Funding is neutral to bearish on the bigger venues.
Liquidity is thin.
Spot and futures volume are weak.
Open interest is no longer giving a clean directional signal.
The CME gap only matters if volume comes back.
For now, Ethereum is not giving me enough evidence to trust a strong bullish reversal. It still looks heavy, but the next hour or so should tell us whether the market is preparing for another leg down or a short-term liquidity grab first.
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Before we move on to the chart analysis, I want to look at Ethereum and what it is telling us about the wider market.
It feels like we are going to get a much clearer signal within the next hour or so. The market is compressing, volume is thin, and the next proper move should give us a better read on today’s direction.
Starting with Ethereum funding rates, there is one clear anomaly on the screen: KuCoin.
KuCoin is showing a much more bullish funding bias, and it is doing the same thing on XRP, HYPE, and Dogecoin. That matters because KuCoin has a large retail trading audience, and retail seems to be leaning heavily long on those markets.
But when we look at the bigger-money exchanges, the ones I’ve underlined in red, the picture is different. Most of those are neutral to bearish.
So I am not treating KuCoin as the main signal here. It looks more like an exchange-specific anomaly, likely caused by retail positioning and thinner liquidity.
Across the bigger venues, Ethereum funding does not look bullish. It looks neutral to bearish, which supports the downside case.
Moving to the 24-hour Ethereum liquidation heat map, the main level is around $2,100. Above current price, there is not much liquidity. Below current price, there is also not a huge amount, which tells us people are not trading ETH with much conviction right now.
Spot markets are weak. Futures are cooling off. Volume is falling.
Those are all bearish warning signs.
The 48-hour liquidation heat map gives a bit more detail. There is slightly more liquidity here, and I’ve highlighted an area where a small, shadowy liquidity pocket has formed. The last time Ethereum formed something similar on this timeframe, it did not take long for price to move into it and take it out.
So based on that chart, a short-term rise in ETH is still possible. I would not be surprised to see Ethereum attack the range I’ve boxed out before deciding the next real move.
The one-week liquidation heat map gives the clearest wider picture. There is more liquidity above price than below, and that liquidity has been building for longer.
On the surface, that sounds bullish.
But in a bearish market, that is also normal. When price trends lower, shorts build above price, and liquidation levels naturally stack overhead. So we cannot draw a clean bullish conclusion just because there is more liquidity above.
To make sense of the heat maps, we need to bring in open interest.
Ethereum open interest is no longer giving us the same clean signal it gave earlier in the week. Previously, we had a clear negative correlation: open interest was rising while price was falling. That suggested new short positions were entering the market and pushing price down.
That relationship changed around May 18th.
At that point, open interest dropped while price also dropped, which suggests a larger long position exited the market. Since then, we have not seen a major change in open interest or price. The market has mostly gone quiet, with volume, liquidity, and interest all dropping off.
This is why the CME gap is not enough by itself.
Yes, Bitcoin still has the CME gap around $79,000, but a CME gap is not magic. It is not a reason to trade by itself.
The CME gap trade works when the market has enough liquidity and volume to execute the move. When volume drops, liquidity drops, and participation dries up, that trade becomes much less reliable.
This is usually when CME gap trades fail.
So the Ethereum read is this:
Funding is neutral to bearish on the bigger venues.
Liquidity is thin.
Spot and futures volume are weak.
Open interest is no longer giving a clean directional signal.
The CME gap only matters if volume comes back.
For now, Ethereum is not giving me enough evidence to trust a strong bullish reversal. It still looks heavy, but the next hour or so should tell us whether the market is preparing for another leg down or a short-term liquidity grab first.
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