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.

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.

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.

This is where joe lewis lives, on the big yacht both of those two yachts are his and he lives in those. Right at the end is where Sam Bankman Freid used to live I’ll highlight it with an arrow.

SBF and the owner of Tottenham and Justin Bieber and Justin Bieber‘s dad all live in the same apartment complex in the Bahamas pretty crazy apartments here start at 4.4 million for a one bed on the ground floor. I was there during the bull market 2023 looking for a new neighbour. I decided it was just too expensive.