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.
❤5👍1👏1
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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BITCOIN OPEN INTEREST CONFIRMATION
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Now we are looking at Bitcoin aggregated open interest, and my earlier suspicion has been confirmed.
I’ll highlight it on the chart so you can see it clearly.
Open interest is rising while price is falling.
That is important because it means fresh short positions are being opened into the move. Liquidity is rising, open interest is increasing, and price is still moving down because the appetite to short Bitcoin is still growing.
This is not just people closing longs.
This looks like traders are actively adding short exposure.
The last time we saw this same structure on the Bitcoin chart, I’ve marked it with the square box. Price still continued lower after that. That was nearly a week ago now, and the same type of behaviour is starting to show again.
When open interest rises while price falls, it is generally not the end of the downside. It usually means the move still has pressure behind it.
That is why I am now looking more seriously towards $73,000 as a realistic target area for the short position.
At that point, we can decide whether to take more profit, reduce size, or hold for the bigger move.
But honestly, at this stage, we are kind of in this for the longer ride now.
The real question is not whether the trade is working.
It clearly is.
The question is where I actually want to close it.
And I bet you cannot guess how much profit this position is in right now.
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Now we are looking at Bitcoin aggregated open interest, and my earlier suspicion has been confirmed.
I’ll highlight it on the chart so you can see it clearly.
Open interest is rising while price is falling.
That is important because it means fresh short positions are being opened into the move. Liquidity is rising, open interest is increasing, and price is still moving down because the appetite to short Bitcoin is still growing.
This is not just people closing longs.
This looks like traders are actively adding short exposure.
The last time we saw this same structure on the Bitcoin chart, I’ve marked it with the square box. Price still continued lower after that. That was nearly a week ago now, and the same type of behaviour is starting to show again.
When open interest rises while price falls, it is generally not the end of the downside. It usually means the move still has pressure behind it.
That is why I am now looking more seriously towards $73,000 as a realistic target area for the short position.
At that point, we can decide whether to take more profit, reduce size, or hold for the bigger move.
But honestly, at this stage, we are kind of in this for the longer ride now.
The real question is not whether the trade is working.
It clearly is.
The question is where I actually want to close it.
And I bet you cannot guess how much profit this position is in right now.
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BITCOIN VOLUME CONFIRMATION
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Now we have even more confirmation from the volume data.
Look at Bitcoin spot volume, Bitcoin futures volume, the Bitcoin price versus volume history chart, Bitcoin volume distribution, and the taker buy versus taker sell data. These are the key data points I’ve attached in the images.
Bitcoin spot volume is showing a 22.3% move, but the important point is what that volume represents.
This does not look like people buying the dip.
This looks like people selling.
If traders were aggressively buying the dip, volume would not be dropping off the way it is. I’ve highlighted previous examples on the chart where buying the dip actually happened. Those are the areas marked with the three red tops, where volume came in, price reacted, and the market showed demand.
This time, we have not had that.
I’ve marked the current structure with the blue line, and you can see there is no real bounce back in volume. Volume spikes, then drops straight back down again.
That tells me there is no appetite to buy this dip.
Previously, Bitcoin has seen buyers step in at similar moments. On this occasion, that demand is not showing up, which suggests price can still move lower.
That gives me more confidence in holding the short position.
The Bitcoin volume distribution also still shows an unhealthy market. Futures continue to dominate heavily, while spot participation remains weak.
Then when we look at the 24-hour taker buy versus taker sell data for both futures and spot, both are leaning clearly sell-side.
On both markets, close to 52% of taker volume is sell-side, giving us roughly a 4% sell-side preference.
There is slightly more aggressive selling in the futures market than in the spot market, but both are pointing the same way.
The break below $76,500 seems to be causing larger Bitcoin holders to reduce exposure, likely with the intention of buying back lower.
This does not look like full panic selling yet.
If this was outright panic, price would probably be moving much lower already.
Instead, this looks like the precursor to that kind of move: bigger holders stepping out, spot demand failing to appear, futures traders pressing the downside, and the market setting up for lower levels.
So the read is clear.
Spot demand is weak.
Volume is not recovering.
Taker flow is sell-side.
Futures are still dominant.
The market remains unhealthy.
For now, this supports the bearish case and gives me more reason to keep holding the short.
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Now we have even more confirmation from the volume data.
Look at Bitcoin spot volume, Bitcoin futures volume, the Bitcoin price versus volume history chart, Bitcoin volume distribution, and the taker buy versus taker sell data. These are the key data points I’ve attached in the images.
Bitcoin spot volume is showing a 22.3% move, but the important point is what that volume represents.
This does not look like people buying the dip.
This looks like people selling.
If traders were aggressively buying the dip, volume would not be dropping off the way it is. I’ve highlighted previous examples on the chart where buying the dip actually happened. Those are the areas marked with the three red tops, where volume came in, price reacted, and the market showed demand.
This time, we have not had that.
I’ve marked the current structure with the blue line, and you can see there is no real bounce back in volume. Volume spikes, then drops straight back down again.
That tells me there is no appetite to buy this dip.
Previously, Bitcoin has seen buyers step in at similar moments. On this occasion, that demand is not showing up, which suggests price can still move lower.
That gives me more confidence in holding the short position.
The Bitcoin volume distribution also still shows an unhealthy market. Futures continue to dominate heavily, while spot participation remains weak.
Then when we look at the 24-hour taker buy versus taker sell data for both futures and spot, both are leaning clearly sell-side.
On both markets, close to 52% of taker volume is sell-side, giving us roughly a 4% sell-side preference.
There is slightly more aggressive selling in the futures market than in the spot market, but both are pointing the same way.
The break below $76,500 seems to be causing larger Bitcoin holders to reduce exposure, likely with the intention of buying back lower.
This does not look like full panic selling yet.
If this was outright panic, price would probably be moving much lower already.
Instead, this looks like the precursor to that kind of move: bigger holders stepping out, spot demand failing to appear, futures traders pressing the downside, and the market setting up for lower levels.
So the read is clear.
Spot demand is weak.
Volume is not recovering.
Taker flow is sell-side.
Futures are still dominant.
The market remains unhealthy.
For now, this supports the bearish case and gives me more reason to keep holding the short.
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ETHEREUM OPEN INTEREST CHECK
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Over on Ethereum, the open interest is telling a similar story to Bitcoin, but not quite as cleanly.
Earlier, it looked like either shorts were taking profit or long positions were being liquidated. Since then, Ethereum open interest has started rising again while price has continued falling.
That matters.
When open interest rises while price falls, it usually suggests traders are opening fresh short positions into the move. So right now, Ethereum looks like people are continuing to short it this morning, which points more towards another push down than a clean move back up.
This does contradict my earlier thought that we could see more of a bounce, so we have to take it seriously.
To check what people are doing right now, look at the overall crypto long versus short ratio over the past hour. It is heavily short: around 62.62% shorts versus 37.38% longs.
That tells us traders are clearly trying to force another move lower.
The awkward part is that this can also create the conditions for a bounce. If too many people pile into shorts too quickly, the market can flush lower, trap late shorts, then bounce steadily through the day before potentially getting smashed back down again.
That is why this is difficult to read.
My instinct is still that we normally get some kind of decent bounce in the middle of the weekend. I have traded this setup so many times before. But right now, Ethereum open interest and the wider long/short data are both saying traders are pressing the downside again.
So the read is:
Short term, another move down is very possible.
After that, a bounce is still likely.
Then we need to see whether that bounce has real strength or just becomes another short opportunity.
Now, small football side note for anyone who cares.
Tottenham play Everton tomorrow. West Ham play Leeds.
If West Ham beat Leeds and Tottenham lose to Everton, Tottenham get relegated.
So tomorrow I am weirdly rooting for Leeds to lose, even though I like Leeds. I am from Halifax, so it is not like supporting Halifax Town is going to achieve much, and supporting Leeds for 20 years has not exactly achieved much either. They were good when I was a kid, at least.
The reason I bring this up is because Tottenham going down would be financially hilarious. Daniel Levy is no longer the main man in the same way, but ENIC, Joe Lewis, and the Lewis family ownership structure would be looking at a brutal hit if Spurs dropped.
And I do not like Tottenham, so naturally I find this quite funny.
I once had these carpet fitters that were Tottenham fans when I lived in Sevenoaks, and the guy clearly had done a big line of cocaine before he came to my house, and this would have been at 10 o'clock in the morning. I've never seen somebody fit carpet as quickly as those guys, smell as much as those guys, and identify so heavily with a club whose core audience is not those guys.
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Over on Ethereum, the open interest is telling a similar story to Bitcoin, but not quite as cleanly.
Earlier, it looked like either shorts were taking profit or long positions were being liquidated. Since then, Ethereum open interest has started rising again while price has continued falling.
That matters.
When open interest rises while price falls, it usually suggests traders are opening fresh short positions into the move. So right now, Ethereum looks like people are continuing to short it this morning, which points more towards another push down than a clean move back up.
This does contradict my earlier thought that we could see more of a bounce, so we have to take it seriously.
To check what people are doing right now, look at the overall crypto long versus short ratio over the past hour. It is heavily short: around 62.62% shorts versus 37.38% longs.
That tells us traders are clearly trying to force another move lower.
The awkward part is that this can also create the conditions for a bounce. If too many people pile into shorts too quickly, the market can flush lower, trap late shorts, then bounce steadily through the day before potentially getting smashed back down again.
That is why this is difficult to read.
My instinct is still that we normally get some kind of decent bounce in the middle of the weekend. I have traded this setup so many times before. But right now, Ethereum open interest and the wider long/short data are both saying traders are pressing the downside again.
So the read is:
Short term, another move down is very possible.
After that, a bounce is still likely.
Then we need to see whether that bounce has real strength or just becomes another short opportunity.
Now, small football side note for anyone who cares.
Tottenham play Everton tomorrow. West Ham play Leeds.
If West Ham beat Leeds and Tottenham lose to Everton, Tottenham get relegated.
So tomorrow I am weirdly rooting for Leeds to lose, even though I like Leeds. I am from Halifax, so it is not like supporting Halifax Town is going to achieve much, and supporting Leeds for 20 years has not exactly achieved much either. They were good when I was a kid, at least.
The reason I bring this up is because Tottenham going down would be financially hilarious. Daniel Levy is no longer the main man in the same way, but ENIC, Joe Lewis, and the Lewis family ownership structure would be looking at a brutal hit if Spurs dropped.
And I do not like Tottenham, so naturally I find this quite funny.
I once had these carpet fitters that were Tottenham fans when I lived in Sevenoaks, and the guy clearly had done a big line of cocaine before he came to my house, and this would have been at 10 o'clock in the morning. I've never seen somebody fit carpet as quickly as those guys, smell as much as those guys, and identify so heavily with a club whose core audience is not those guys.
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