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.
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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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BITCOIN CHART ANALYSIS: KEY UPSIDE SETUP
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Starting the chart analysis with the same Bitcoin chart I used in yesterday’s YouTube thumbnail.
This chart is still very relevant.
On the side of the VRVP, you can clearly see a major gap in liquidity, with the main liquidity range sitting around $79,000. That also lines up with the open CME gap, which is why this level matters so much.
So far, this chart is still correct.
Bitcoin is holding the key structure, and the retest around $76,750 the other day was bullish from a chart perspective. Price bounced from the outside of the structure and held the level.
Yes, the pattern is ugly. It almost looks like a hunchback head-and-shoulders structure. But ugly does not automatically mean bearish. The important part is that the retest held, and the upside liquidity around $79,000 is still sitting there.
Now, I want to show you an indicator my developers have been working on for years.
This indicator is normally behind a paywall because we have spent a lot of time and money developing it, but I want to show it here because the accuracy has been genuinely impressive.
I’ve marked the chart as clearly as possible so you can follow the logic.
Starting from the left side of the chart, the indicator takes a long position and then cashes it out nicely. I’ve marked that with a green tick because it was a good trade.
It then flips short and catches the next move down. Again, I’ve marked that with a green tick because the trade worked.
Then it turns long again and catches another strong upside move, which I’ve also marked as a successful trade.
After that, it takes a short position that starts correctly, but the move does not properly follow through. The initial direction was right, but the trade itself does not really make money, so I’ve marked that area with a red cross.
The next signal also gets the initial direction right, but the pump does not hold and the trade ends up losing a small amount. Again, I’ve marked that as a failed trade because we are not pretending the indicator is perfect.
Then there is another neutral long signal where not much happens.
After that, the indicator flips short around $80,300, and I’ve highlighted that area in blue on the chart. From that blue-marked short entry, Bitcoin falls all the way down towards around $77,000, which was an excellent trade.
Now here is the important part.
The indicator has just flipped green again, and I’ve highlighted that latest green flip with pink on the chart so you can clearly see the current signal.
The last time we saw this kind of green flip around these levels, Bitcoin pumped hard to the upside.
So the question now is simple:
Is this indicator telling us Bitcoin is about to move higher again?
I trust this indicator a lot. I do not follow it blindly, but it is one of the better tools we have built, and when it gives a fresh green signal at an important level, I pay attention.
This makes me take the short-term bullish case seriously.
It also makes me want to be very careful with the short position here, because if Bitcoin starts pushing from this structure, the move towards $79,000 becomes very realistic.
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Starting the chart analysis with the same Bitcoin chart I used in yesterday’s YouTube thumbnail.
This chart is still very relevant.
On the side of the VRVP, you can clearly see a major gap in liquidity, with the main liquidity range sitting around $79,000. That also lines up with the open CME gap, which is why this level matters so much.
So far, this chart is still correct.
Bitcoin is holding the key structure, and the retest around $76,750 the other day was bullish from a chart perspective. Price bounced from the outside of the structure and held the level.
Yes, the pattern is ugly. It almost looks like a hunchback head-and-shoulders structure. But ugly does not automatically mean bearish. The important part is that the retest held, and the upside liquidity around $79,000 is still sitting there.
Now, I want to show you an indicator my developers have been working on for years.
This indicator is normally behind a paywall because we have spent a lot of time and money developing it, but I want to show it here because the accuracy has been genuinely impressive.
I’ve marked the chart as clearly as possible so you can follow the logic.
Starting from the left side of the chart, the indicator takes a long position and then cashes it out nicely. I’ve marked that with a green tick because it was a good trade.
It then flips short and catches the next move down. Again, I’ve marked that with a green tick because the trade worked.
Then it turns long again and catches another strong upside move, which I’ve also marked as a successful trade.
After that, it takes a short position that starts correctly, but the move does not properly follow through. The initial direction was right, but the trade itself does not really make money, so I’ve marked that area with a red cross.
The next signal also gets the initial direction right, but the pump does not hold and the trade ends up losing a small amount. Again, I’ve marked that as a failed trade because we are not pretending the indicator is perfect.
Then there is another neutral long signal where not much happens.
After that, the indicator flips short around $80,300, and I’ve highlighted that area in blue on the chart. From that blue-marked short entry, Bitcoin falls all the way down towards around $77,000, which was an excellent trade.
Now here is the important part.
The indicator has just flipped green again, and I’ve highlighted that latest green flip with pink on the chart so you can clearly see the current signal.
The last time we saw this kind of green flip around these levels, Bitcoin pumped hard to the upside.
So the question now is simple:
Is this indicator telling us Bitcoin is about to move higher again?
I trust this indicator a lot. I do not follow it blindly, but it is one of the better tools we have built, and when it gives a fresh green signal at an important level, I pay attention.
This makes me take the short-term bullish case seriously.
It also makes me want to be very careful with the short position here, because if Bitcoin starts pushing from this structure, the move towards $79,000 becomes very realistic.
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BITCOIN CUP & HANDLE STRUCTURE
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This chart shows the wider cup and handle formation on Bitcoin.
The cup and handle is pretty clear to see, but the important point is that we still have not reached the top of the range. I’ve drawn the pink arrow pointing towards that level, around $79,000.
We have still not tested it.
At this point, if Bitcoin does move up and test that $79,000 region, it starts to become a problem for the short position because it would likely confirm another higher low.
A break of this trading range around $79,000 would suggest that the sideways accumulation we have seen recently has held. That would keep the mid-term bullish structure intact and could open the door for a move back towards $85,000.
The other issue is liquidity.
There is not a huge amount of liquidity sitting above this area, but there are still enough shorts positioned in the market that another push higher could squeeze them out again.
My short position is not going to get squeezed out easily, but it does make the trade more complicated.
We have now been holding this large short position for over a week, and I would quite like Bitcoin to finally move out of this range soon.
Upside or downside, I am not really bothered.
I just want the market to move.
I want the big move, because that is where the money is made.
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This chart shows the wider cup and handle formation on Bitcoin.
The cup and handle is pretty clear to see, but the important point is that we still have not reached the top of the range. I’ve drawn the pink arrow pointing towards that level, around $79,000.
We have still not tested it.
At this point, if Bitcoin does move up and test that $79,000 region, it starts to become a problem for the short position because it would likely confirm another higher low.
A break of this trading range around $79,000 would suggest that the sideways accumulation we have seen recently has held. That would keep the mid-term bullish structure intact and could open the door for a move back towards $85,000.
The other issue is liquidity.
There is not a huge amount of liquidity sitting above this area, but there are still enough shorts positioned in the market that another push higher could squeeze them out again.
My short position is not going to get squeezed out easily, but it does make the trade more complicated.
We have now been holding this large short position for over a week, and I would quite like Bitcoin to finally move out of this range soon.
Upside or downside, I am not really bothered.
I just want the market to move.
I want the big move, because that is where the money is made.
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WYCKOFF STRUCTURE VS UPSIDE LIQUIDITY
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The contrast to the upside magnet around $79,000 is the wider Wyckoff accumulation pattern.
This is the reason I am still in the longer-term short position, and it is why I still want to keep looking for short opportunities. To me, this structure is still very much in play.
At the bottom of the chart, you can see the small oscillator moving from red towards green. That is our momentum oscillator tool, which is also included inside the indicator I showed you a second ago.
The momentum oscillator is designed to show money flow and whether the market is gaining or losing momentum. Right now, it is showing that Bitcoin is still losing momentum. That may seem obvious from the chart, but it is useful to have the data confirming the read.
The red area you can see on the chart is also important. This indicator has effectively been short since around $108,000. It closed the short around $80,000 on the way back up, but before that, it caught the move all the way down towards around $52,000.
It is not perfect on exits. No indicator is.
But it is extremely strong at identifying entries, which is why we built it in the first place. The whole idea was to take the way I read markets, the way I look for entries, momentum shifts, resistance levels, and trend changes, and turn that into a system. We basically spent years trying to download my brain into an indicator.
Now, looking at this chart, the Wyckoff structure is still suggesting downside. The chart is showing a move towards around $72,000, but I also know that if we zoom out further, there is a much bigger level sitting around $60,000 as well.
The dotted lines are also important.
When you see a thick red dotted line, that is the indicator marking a strong resistance area where a short could make sense.
When you see a thick green dotted line, that is the opposite. It is marking an area where a long could make sense.
These are not always full trade signals. Think of them more like semi-trade levels. They show important areas where the market may react, even if the full confirmation setup has not triggered yet.
On this chart, the indicator has plotted a fairly thick red dotted line around $82,500, which tells me it sees that as an important resistance level. It is not quite as thick as the red dotted line up around $97,000, which adds a bit of ambiguity, but it still marks $82,500 as a key area.
So this is the wider read:
Yes, we have upside liquidity around $79,000.
Yes, there is a CME gap still sitting above.
But the Wyckoff structure, the momentum oscillator, and the indicator resistance levels are still suggesting that the broader market is losing momentum.
That is why I am not ready to abandon the bearish case.
Short term, Bitcoin can still push higher and test liquidity.
But the bigger structure still looks heavy, and the Wyckoff pattern is still playing out.
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The contrast to the upside magnet around $79,000 is the wider Wyckoff accumulation pattern.
This is the reason I am still in the longer-term short position, and it is why I still want to keep looking for short opportunities. To me, this structure is still very much in play.
At the bottom of the chart, you can see the small oscillator moving from red towards green. That is our momentum oscillator tool, which is also included inside the indicator I showed you a second ago.
The momentum oscillator is designed to show money flow and whether the market is gaining or losing momentum. Right now, it is showing that Bitcoin is still losing momentum. That may seem obvious from the chart, but it is useful to have the data confirming the read.
The red area you can see on the chart is also important. This indicator has effectively been short since around $108,000. It closed the short around $80,000 on the way back up, but before that, it caught the move all the way down towards around $52,000.
It is not perfect on exits. No indicator is.
But it is extremely strong at identifying entries, which is why we built it in the first place. The whole idea was to take the way I read markets, the way I look for entries, momentum shifts, resistance levels, and trend changes, and turn that into a system. We basically spent years trying to download my brain into an indicator.
Now, looking at this chart, the Wyckoff structure is still suggesting downside. The chart is showing a move towards around $72,000, but I also know that if we zoom out further, there is a much bigger level sitting around $60,000 as well.
The dotted lines are also important.
When you see a thick red dotted line, that is the indicator marking a strong resistance area where a short could make sense.
When you see a thick green dotted line, that is the opposite. It is marking an area where a long could make sense.
These are not always full trade signals. Think of them more like semi-trade levels. They show important areas where the market may react, even if the full confirmation setup has not triggered yet.
On this chart, the indicator has plotted a fairly thick red dotted line around $82,500, which tells me it sees that as an important resistance level. It is not quite as thick as the red dotted line up around $97,000, which adds a bit of ambiguity, but it still marks $82,500 as a key area.
So this is the wider read:
Yes, we have upside liquidity around $79,000.
Yes, there is a CME gap still sitting above.
But the Wyckoff structure, the momentum oscillator, and the indicator resistance levels are still suggesting that the broader market is losing momentum.
That is why I am not ready to abandon the bearish case.
Short term, Bitcoin can still push higher and test liquidity.
But the bigger structure still looks heavy, and the Wyckoff pattern is still playing out.
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MORNING MARKET SUMMARY
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Quick summary of what we covered this morning:
* Bitcoin funding rates are starting to move back towards bearish pressure again. Not every exchange is negative, but the direction of travel is what matters.
* Bitcoin open interest weighted funding looks similar to the structure we saw around late January / early February, where price chopped lower while funding flipped between aggressive green and red.
* The Bitcoin liquidation heat maps show an important level around $76,500. If that level breaks, price could move lower quickly.
* The 24-hour and 48-hour heat maps both show fresh downside liquidity building from leveraged longs that entered during the recent bounce.
* The one-week liquidation heat map also shows the $76,500 area has been building for several days, which makes it an important level to watch.
* Bitcoin volume does not look bullish. Futures volume is up, but spot volume is down, which tells us there is no strong spot demand buying the dip.
* Taker volume is still leaning sell-side across both futures and spot, meaning the aggressive market orders are still more bearish than bullish.
* Bitcoin spot volume now makes up only around 6.8% of total Bitcoin volume, with futures still dominating the market.
* Open interest is falling while price is rising, which suggests some of the upside move may be short covering rather than fresh long exposure.
* Wider crypto longs versus shorts also show more short exposure than long exposure across the 24-hour, 12-hour, 4-hour, and 1-hour timeframes.
* Sentiment polls look more bullish than the actual positioning data, which is why we do not trade off opinions. We follow the money.
* Ethereum funding looks neutral to bearish on the bigger exchanges, while KuCoin appears to be an anomaly due to its more retail-heavy audience.
* Ethereum liquidity and open interest are not giving a clean bullish signal either. Volume is thin, liquidity is weaker, and the market still looks heavy.
* The Bitcoin chart still has upside magnetism towards $79,000, especially with the CME gap and VRVP liquidity gap sitting there.
* But the wider Wyckoff structure, momentum oscillator, and longer-term indicator read still suggest Bitcoin is losing momentum.
So the conclusion for now is simple.
The market looks more bearish than bullish this morning. Price can still bounce, and we still have to respect the upside liquidity around $79,000, but the numbers are not looking great and the key support levels are very close.
If Bitcoin loses these nearby supports, the move lower could happen quickly.
I’ll update you all again in a few hours once the market gives us a clearer direction.
For now, if you want to support the work and take part in the next challenge, join the $10,000 to $1,000,000 trading challenge using the link below.
Sign up, follow the instructions, and become part of the next trading revolution:
t.me/ThatMartiniGuyYUBITBot
Terms apply. Trade responsibly.
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Quick summary of what we covered this morning:
* Bitcoin funding rates are starting to move back towards bearish pressure again. Not every exchange is negative, but the direction of travel is what matters.
* Bitcoin open interest weighted funding looks similar to the structure we saw around late January / early February, where price chopped lower while funding flipped between aggressive green and red.
* The Bitcoin liquidation heat maps show an important level around $76,500. If that level breaks, price could move lower quickly.
* The 24-hour and 48-hour heat maps both show fresh downside liquidity building from leveraged longs that entered during the recent bounce.
* The one-week liquidation heat map also shows the $76,500 area has been building for several days, which makes it an important level to watch.
* Bitcoin volume does not look bullish. Futures volume is up, but spot volume is down, which tells us there is no strong spot demand buying the dip.
* Taker volume is still leaning sell-side across both futures and spot, meaning the aggressive market orders are still more bearish than bullish.
* Bitcoin spot volume now makes up only around 6.8% of total Bitcoin volume, with futures still dominating the market.
* Open interest is falling while price is rising, which suggests some of the upside move may be short covering rather than fresh long exposure.
* Wider crypto longs versus shorts also show more short exposure than long exposure across the 24-hour, 12-hour, 4-hour, and 1-hour timeframes.
* Sentiment polls look more bullish than the actual positioning data, which is why we do not trade off opinions. We follow the money.
* Ethereum funding looks neutral to bearish on the bigger exchanges, while KuCoin appears to be an anomaly due to its more retail-heavy audience.
* Ethereum liquidity and open interest are not giving a clean bullish signal either. Volume is thin, liquidity is weaker, and the market still looks heavy.
* The Bitcoin chart still has upside magnetism towards $79,000, especially with the CME gap and VRVP liquidity gap sitting there.
* But the wider Wyckoff structure, momentum oscillator, and longer-term indicator read still suggest Bitcoin is losing momentum.
So the conclusion for now is simple.
The market looks more bearish than bullish this morning. Price can still bounce, and we still have to respect the upside liquidity around $79,000, but the numbers are not looking great and the key support levels are very close.
If Bitcoin loses these nearby supports, the move lower could happen quickly.
I’ll update you all again in a few hours once the market gives us a clearer direction.
For now, if you want to support the work and take part in the next challenge, join the $10,000 to $1,000,000 trading challenge using the link below.
Sign up, follow the instructions, and become part of the next trading revolution:
t.me/ThatMartiniGuyYUBITBot
Terms apply. Trade responsibly.
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ill end this analysis a second time by saying im back in a long, my SL is just below my entry, i have only a small amount of faith this is going up today but $2k profit to wipeout the tiny loss from yesterday is just not attractive enough to close, i want more and i think flows will move a lot today, its friday so im not expecting a sensible market, i expect some fluctuations and i think there is a good enough chance of going to 79k to leave it open
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GOOD MORNING!!
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And what a good morning it is to be short.
My baby long got stopped out at entry again, I got an early night, and I slept through the crash.
With Bitcoin dumping, naturally spirits will be high in this group, but there are a few things I need to point out.
First, we still have a CME gap sitting around $79,000, and at this point that is a massive gap. In all honesty, it would not surprise me to see Bitcoin run back towards $79,000 this weekend and completely catch people offside.
So if you are in a highly leveraged short position and you have not taken any profit here, my view is simple: you are playing with fire.
I am not in a highly leveraged short position. Even if Bitcoin went back to $79,000, the trade would still be in profit by a few hundred thousand dollars.
Now, I am currently up a lot more than that, but I want you to watch today’s video, so I am not going to show the full number here. I’ll put it in the video instead, because it is absolutely wild.
The bigger issue right now is the geopolitical backdrop. Trump is threatening further airstrikes on Iran, Iran could retaliate in the region, and that creates market uncertainty.
Uncertainty is bad for risk assets, and that is part of why prices are selling off.
One thing I do find interesting is that Solana has not been dropping at the same pace as Bitcoin. SOL is showing a bit more relative strength, which is worth paying attention to.
Overall, today’s job is simple.
We are going to run through the full analysis and work out whether this weekend is likely to stay bearish, or whether Bitcoin is setting up for a violent bounce back towards the CME gap.
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And what a good morning it is to be short.
My baby long got stopped out at entry again, I got an early night, and I slept through the crash.
With Bitcoin dumping, naturally spirits will be high in this group, but there are a few things I need to point out.
First, we still have a CME gap sitting around $79,000, and at this point that is a massive gap. In all honesty, it would not surprise me to see Bitcoin run back towards $79,000 this weekend and completely catch people offside.
So if you are in a highly leveraged short position and you have not taken any profit here, my view is simple: you are playing with fire.
I am not in a highly leveraged short position. Even if Bitcoin went back to $79,000, the trade would still be in profit by a few hundred thousand dollars.
Now, I am currently up a lot more than that, but I want you to watch today’s video, so I am not going to show the full number here. I’ll put it in the video instead, because it is absolutely wild.
The bigger issue right now is the geopolitical backdrop. Trump is threatening further airstrikes on Iran, Iran could retaliate in the region, and that creates market uncertainty.
Uncertainty is bad for risk assets, and that is part of why prices are selling off.
One thing I do find interesting is that Solana has not been dropping at the same pace as Bitcoin. SOL is showing a bit more relative strength, which is worth paying attention to.
Overall, today’s job is simple.
We are going to run through the full analysis and work out whether this weekend is likely to stay bearish, or whether Bitcoin is setting up for a violent bounce back towards the CME gap.
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BITCOIN 2-HOUR CHART BREAKDOWN
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Starting today’s analysis with Bitcoin on the 2-hour chart.
This is the same chart I used in yesterday’s thumbnail, because the structure is still important.
We have not perfectly retested the full range low yet. For Bitcoin to properly reset and then give us a stronger bullish argument again, the area I would really want to see tested is somewhere between $73,000 and $72,000.
But the key level right now is $75,000.
Once Bitcoin starts trading below $75,000, the uptrend is broken. If Bitcoin loses $75,000 properly after Monday, that becomes very consequential, because from that point we would start forming lower lows.
That is where I would begin considering whether it makes sense to increase the size of the short position.
But I would not want to blindly add at the lows.
The cleaner setup would be: Bitcoin loses $75,000, confirms the lower low, bounces back up, and then we look to short the bounce.
That is a realistic scenario, and honestly, the chart in front of us looks sensible. I would not be surprised to see it play out.
The danger is that this kind of obvious chart structure can also fuel the move lower. Traders see the same bounce setup, they try to long it, the bounce does not come, and the market keeps pushing down.
That is the trap.
As Bitcoin traders, the natural instinct is often to look for the long, because long term, Bitcoin does perform well. But Bitcoin does not always perform well in the short term, and right now we need to separate belief from market structure.
So the next step is simple: follow the money.
The money flow today is likely going to be negative. Before looking at the data, my expectation is that we will probably see higher spot volume, higher futures volume, and a drop in open interest.
If that is the case, it would suggest long positions closing rather than fresh shorts aggressively entering.
But if we see open interest rising while price is falling, that is a different story. That would suggest new short positions are being opened into the move, and that would be a major warning sign for more downside.
That is what we need to check next.
If the data confirms fresh short exposure entering the market, then this trade could become enormous.
We could realistically be looking at a million dollars in profit on the position, which is pretty crazy.
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Starting today’s analysis with Bitcoin on the 2-hour chart.
This is the same chart I used in yesterday’s thumbnail, because the structure is still important.
We have not perfectly retested the full range low yet. For Bitcoin to properly reset and then give us a stronger bullish argument again, the area I would really want to see tested is somewhere between $73,000 and $72,000.
But the key level right now is $75,000.
Once Bitcoin starts trading below $75,000, the uptrend is broken. If Bitcoin loses $75,000 properly after Monday, that becomes very consequential, because from that point we would start forming lower lows.
That is where I would begin considering whether it makes sense to increase the size of the short position.
But I would not want to blindly add at the lows.
The cleaner setup would be: Bitcoin loses $75,000, confirms the lower low, bounces back up, and then we look to short the bounce.
That is a realistic scenario, and honestly, the chart in front of us looks sensible. I would not be surprised to see it play out.
The danger is that this kind of obvious chart structure can also fuel the move lower. Traders see the same bounce setup, they try to long it, the bounce does not come, and the market keeps pushing down.
That is the trap.
As Bitcoin traders, the natural instinct is often to look for the long, because long term, Bitcoin does perform well. But Bitcoin does not always perform well in the short term, and right now we need to separate belief from market structure.
So the next step is simple: follow the money.
The money flow today is likely going to be negative. Before looking at the data, my expectation is that we will probably see higher spot volume, higher futures volume, and a drop in open interest.
If that is the case, it would suggest long positions closing rather than fresh shorts aggressively entering.
But if we see open interest rising while price is falling, that is a different story. That would suggest new short positions are being opened into the move, and that would be a major warning sign for more downside.
That is what we need to check next.
If the data confirms fresh short exposure entering the market, then this trade could become enormous.
We could realistically be looking at a million dollars in profit on the position, which is pretty crazy.
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BITCOIN FUNDING RATE & OI-WEIGHTED FUNDING CHECK
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Just like I warned about yesterday, the money situation here is fascinating.
We are looking at Bitcoin funding rates and the Bitcoin open interest weighted funding rate.
Across Bitcoin, Ethereum, and the major trading pairs, funding is moving back towards neutral again. That tells us two things are likely happening at the same time: shorts are taking profit, and longs are starting to come back into the market.
That usually creates equilibrium after a sharp move down, and it often supports a short-term morning bounce.
So funding returning towards neutral does not automatically mean more downside right now. In the short term, it actually suggests the market is trying to bounce.
But the open interest weighted funding rate tells a deeper story.
On the chart, I’ve marked the previous drop-offs with the pink circles on the left. These are the areas where OI-weighted funding started rolling over aggressively. After those drops began, price continued selling off.
Now look at the right side of the chart.
I’ve marked the current OI-weighted funding drop with another pink circle, and then drawn the next potential step-down zones in pink beside it. The reason I’ve done that is because these drops often do not happen once and then disappear. They tend to come in waves.
That is the important part.
When OI-weighted funding starts dropping from a heavily green area, it often suggests that a larger period of selling pressure is beginning. Yesterday, I pointed out the same structure, and while Bitcoin has not fully broken down yet, the setup is still there.
The red line I’ve drawn on price shows the potential downside path if this pattern continues. If we keep seeing these OI-weighted funding drop-offs repeat, then the move towards the $70,000 region remains very realistic.
So the read is split by timeframe.
Short term, funding returning towards neutral can support a bounce.
But the OI-weighted funding structure still suggests the broader move is bearish, and more selling pressure could follow if this starts repeating like it did previously.
That is why we need to stay sharp here.
The market can bounce in the morning, squeeze weak shorts, reset funding, and still continue lower afterwards.
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Just like I warned about yesterday, the money situation here is fascinating.
We are looking at Bitcoin funding rates and the Bitcoin open interest weighted funding rate.
Across Bitcoin, Ethereum, and the major trading pairs, funding is moving back towards neutral again. That tells us two things are likely happening at the same time: shorts are taking profit, and longs are starting to come back into the market.
That usually creates equilibrium after a sharp move down, and it often supports a short-term morning bounce.
So funding returning towards neutral does not automatically mean more downside right now. In the short term, it actually suggests the market is trying to bounce.
But the open interest weighted funding rate tells a deeper story.
On the chart, I’ve marked the previous drop-offs with the pink circles on the left. These are the areas where OI-weighted funding started rolling over aggressively. After those drops began, price continued selling off.
Now look at the right side of the chart.
I’ve marked the current OI-weighted funding drop with another pink circle, and then drawn the next potential step-down zones in pink beside it. The reason I’ve done that is because these drops often do not happen once and then disappear. They tend to come in waves.
That is the important part.
When OI-weighted funding starts dropping from a heavily green area, it often suggests that a larger period of selling pressure is beginning. Yesterday, I pointed out the same structure, and while Bitcoin has not fully broken down yet, the setup is still there.
The red line I’ve drawn on price shows the potential downside path if this pattern continues. If we keep seeing these OI-weighted funding drop-offs repeat, then the move towards the $70,000 region remains very realistic.
So the read is split by timeframe.
Short term, funding returning towards neutral can support a bounce.
But the OI-weighted funding structure still suggests the broader move is bearish, and more selling pressure could follow if this starts repeating like it did previously.
That is why we need to stay sharp here.
The market can bounce in the morning, squeeze weak shorts, reset funding, and still continue lower afterwards.
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WEEKEND CME GAP THOUGHTS
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This is where experience starts to matter.
I have traded this kind of setup so many times before.
Bitcoin drops on Friday night, bounces on Saturday, and everyone starts thinking the same thing:
Maybe we close the CME gap.
Maybe we do not create a proper gap.
Maybe the weekend just stays calm.
I do not really buy that.
My instinct is that this weekend we are more likely to retest the low of the range. I have not checked the spot data yet, so we will confirm this properly in a moment, but my first read is that by Sunday afternoon or Sunday evening, Bitcoin could easily be back near the Friday low.
That would mean a retest around $75,000, but honestly, I do not know if that is low enough.
I think this weekend can get painful.
We may even create more CME gaps instead of closing the current one.
The reason CME gaps normally matter is because there is usually more balance between spot volume and futures volume. When spot demand is strong enough, the market tends to pull back towards those gaps.
But when spot is not pulling its weight, futures can drag the market wherever they want.
That is what we are seeing now.
If there is no real spot demand, why does Bitcoin have to go back to $79,000 just because there is a CME gap there?
Instead, that gap can become bait.
It gives traders a reason to keep trying longs or closing shorts too early, while the market uses that expectation to build more downside liquidity.
We have seen this before.
Back when Bitcoin ran from around $3,000 to $14,000, everyone kept pointing at the CME gap around $3,000 and saying price had to go back and fill it.
It never did.
People kept shorting into that idea, that provided the liquidity bitcoin needed to pump by forcing trades to close.
That is the danger with CME gaps. They work a lot of the time, but they are not magic. They only matter when the market has enough liquidity and enough real demand to make that trade executable.
If volume is dying, spot demand is weak, and futures are controlling direction, then the CME gap can stop being a target and start becoming a trap.
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This is where experience starts to matter.
I have traded this kind of setup so many times before.
Bitcoin drops on Friday night, bounces on Saturday, and everyone starts thinking the same thing:
Maybe we close the CME gap.
Maybe we do not create a proper gap.
Maybe the weekend just stays calm.
I do not really buy that.
My instinct is that this weekend we are more likely to retest the low of the range. I have not checked the spot data yet, so we will confirm this properly in a moment, but my first read is that by Sunday afternoon or Sunday evening, Bitcoin could easily be back near the Friday low.
That would mean a retest around $75,000, but honestly, I do not know if that is low enough.
I think this weekend can get painful.
We may even create more CME gaps instead of closing the current one.
The reason CME gaps normally matter is because there is usually more balance between spot volume and futures volume. When spot demand is strong enough, the market tends to pull back towards those gaps.
But when spot is not pulling its weight, futures can drag the market wherever they want.
That is what we are seeing now.
If there is no real spot demand, why does Bitcoin have to go back to $79,000 just because there is a CME gap there?
Instead, that gap can become bait.
It gives traders a reason to keep trying longs or closing shorts too early, while the market uses that expectation to build more downside liquidity.
We have seen this before.
Back when Bitcoin ran from around $3,000 to $14,000, everyone kept pointing at the CME gap around $3,000 and saying price had to go back and fill it.
It never did.
People kept shorting into that idea, that provided the liquidity bitcoin needed to pump by forcing trades to close.
That is the danger with CME gaps. They work a lot of the time, but they are not magic. They only matter when the market has enough liquidity and enough real demand to make that trade executable.
If volume is dying, spot demand is weak, and futures are controlling direction, then the CME gap can stop being a target and start becoming a trap.
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BITCOIN ETF FLOWS & LIQUIDATION HEAT MAPS
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Starting with yesterday’s Bitcoin ETF flows, the selling pressure is still clear, with BlackRock being one of the main sellers.
ETF demand is not looking strong right now. The flows still suggest institutional confidence is weakening, and from a longer-term perspective, that is bearish.
Now let’s move into the Bitcoin liquidation heat maps.
I’ve attached three charts:
* 1-week liquidation heat map
* 48-hour liquidation heat map
* 24-hour liquidation heat map
Starting with the one-week heat map, we can see Bitcoin took out the major liquidity range yesterday, which I’ve highlighted on the chart. Since then, a very clear range has built above price around $79,000.
In theory, that acts as an upside magnet.
But I do not think that automatically means bullish. If price does move back into that $79,000 range, I would be looking at it more as a short opportunity than a reason to get bullish.
Moving to the 48-hour heat map, we can see the same thing more clearly. Once Bitcoin took out the major yellow liquidity range, price accelerated lower. That is exactly what happens when liquidity gets taken and there is still downside pressure underneath it.
We also still have a lot of liquidity sitting down towards $72,000, so there is absolutely still downside available in this range.
Yes, Bitcoin can bounce.
But the downside liquidity is still there, and it cannot be ignored.
Now on the 24-hour heat map, we can see what has happened after Bitcoin took out the $76,500 liquidation range. Once that level broke, the move was all downside.
Since then, new short positions have entered the market. A lot of those shorts are likely to be highly leveraged, and those positions now create upside liquidation risk around $78,000.
That is important.
If Bitcoin pushes back towards $78,000, it could trigger those late short liquidations and force price up towards $79,000.
But that would not necessarily be because the market is bullish.
It would simply be because liquidity is stacked that way.
A move up to $78,000 / $79,000 could just be a liquidation spike to punish late shorts, rather than the start of a real bullish reversal.
This is why we now need to look at Bitcoin open interest separately.
Open interest will help us understand whether traders are opening fresh shorts, closing longs, or whether leverage is starting to come out of the market.
After that, we also need to analyse spot volume, because spot demand will tell us whether any bounce has real strength behind it, or whether it is just another futures-driven liquidity move.
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Starting with yesterday’s Bitcoin ETF flows, the selling pressure is still clear, with BlackRock being one of the main sellers.
ETF demand is not looking strong right now. The flows still suggest institutional confidence is weakening, and from a longer-term perspective, that is bearish.
Now let’s move into the Bitcoin liquidation heat maps.
I’ve attached three charts:
* 1-week liquidation heat map
* 48-hour liquidation heat map
* 24-hour liquidation heat map
Starting with the one-week heat map, we can see Bitcoin took out the major liquidity range yesterday, which I’ve highlighted on the chart. Since then, a very clear range has built above price around $79,000.
In theory, that acts as an upside magnet.
But I do not think that automatically means bullish. If price does move back into that $79,000 range, I would be looking at it more as a short opportunity than a reason to get bullish.
Moving to the 48-hour heat map, we can see the same thing more clearly. Once Bitcoin took out the major yellow liquidity range, price accelerated lower. That is exactly what happens when liquidity gets taken and there is still downside pressure underneath it.
We also still have a lot of liquidity sitting down towards $72,000, so there is absolutely still downside available in this range.
Yes, Bitcoin can bounce.
But the downside liquidity is still there, and it cannot be ignored.
Now on the 24-hour heat map, we can see what has happened after Bitcoin took out the $76,500 liquidation range. Once that level broke, the move was all downside.
Since then, new short positions have entered the market. A lot of those shorts are likely to be highly leveraged, and those positions now create upside liquidation risk around $78,000.
That is important.
If Bitcoin pushes back towards $78,000, it could trigger those late short liquidations and force price up towards $79,000.
But that would not necessarily be because the market is bullish.
It would simply be because liquidity is stacked that way.
A move up to $78,000 / $79,000 could just be a liquidation spike to punish late shorts, rather than the start of a real bullish reversal.
This is why we now need to look at Bitcoin open interest separately.
Open interest will help us understand whether traders are opening fresh shorts, closing longs, or whether leverage is starting to come out of the market.
After that, we also need to analyse spot volume, because spot demand will tell us whether any bounce has real strength behind it, or whether it is just another futures-driven liquidity move.
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