Author: Murphy
We know that the underlying structure of the chips is the behavioral logic of all market participants. It contains investors' sensitivity to prices under various emotions (profit-taking, loss pressure, etc.) and the psychological changes of investors under the influence of these emotions.
This can be considered one of the most effective ways to observe the true performance of the market from a God's-eye view.
In the past few days, the price of BTC has been hovering between $66,000 and $69,000. From a macro perspective, this position is exactly in the middle equilibrium zone of the chip structure.
The holders on the left still have a psychological advantage because they are not currently at a loss. If the price fluctuates between 66 and 69, their total number would be approximately 7.5 million to 8.2 million.
On the right are the locked-in chips representing anxious investors. Some of these chips may lack conviction and become the main source of selling pressure during price fluctuations or rebounds. During price fluctuations, their total number is roughly between 8 million and 8.7 million chips.
The two sides of the scale are almost equal! This is a typical phased equilibrium structure.
This structure is very resilient and not prone to sudden tilting because the chips on both sides have reached a relatively stable state—those with floating profits feel there is no need to exit here, while those with floating losses are reluctant to cut their losses here.
Therefore, this is why the previous low of 60,000 is a level that is not easily broken.
Unless a major event disrupts this balance, the true bottom of a bear market often occurs after this equilibrium is broken. This means that profits are squeezed, losses are amplified, and it's also the final panic selling phase.
After reviewing the macro level, let's take a more micro perspective and observe the movement of shares within different price ranges over the past three weeks to analyze changes in market behavior and sentiment.
March 11-March 18
The price of BTC ranged from $70,000 to $80,000. During these 7 days, net profit-taking decreased by 117,134 coins, while net loss-making coins decreased by 107,239 coins. Total turnover was 227,000 coins.
This is a relatively active data point, and it is particularly noteworthy that when BTC rebounded to around $74,000, there was a sudden surge in selling of chips with a cost of over $60,000, making the figure of 93,415 stand out starkly compared to the others.
This shows that market confidence is still severely lacking.
March 18th - March 25th
This week, the price of BTC ranged from $60,000 to $70,000. Over these seven days, 24,113 coins were traded at a profit, while 216,489 coins were traded at a loss. The total turnover was 246,000 coins.
Although the total turnover was roughly the same as last week, the number of shares sold at reduced profit-taking decreased significantly. Last week's data was due to a price rebound, which led to a large number of short-term profit-taking. This week, however, with prices falling, there were fewer long-term holders willing to sell.
March 25-April 2
Looking at the past week, the price range for BTC remained between $60,000 and $70,000. During these seven days, 19,597 coins were traded at a profit, while 113,070 coins were traded at a loss. The total turnover was 137,000 coins.
By comparing data from the past three weeks, we can see that the current selling pressure is mainly driven by those who sold at a loss. As mentioned earlier, their mindset is anxious; they are both reluctant to sell at a loss and worried about being hit hard again.
It is foreseeable that if any event disrupts the balance, those who are emotionally anxious will be at the forefront of the sell-off. Even if the balance is maintained, a true bottom structure will only appear after all of them have completed their turnover (clearing out).
Another point worth noting is:
This week's total turnover decreased by nearly 50% compared to the previous two weeks, indicating an extreme contraction in liquidity. This suggests that amidst ongoing geopolitical conflicts and Trump's performance, whether genuine or feigned, the market is gradually becoming weary.
Beneath this apparent calm lies a turbulent undercurrent, often a facade before a storm. When liquidity and volatility reach extremely low levels, even greater volatility will follow.
But for us, this is both a risk and an opportunity!
