Today, the coin circle has been shocked by a coin! LIGHT, in just five and a half hours, saw its price plummet by 77.7%! This is not a correction; it's like a high-altitude dive without a parachute! But strangely, despite such a drop, the 24-hour trading volume surprisingly reached $2.13 billion, ranking third in Binance's contract trading volume, second only to Bitcoin and Ethereum! Something unusual must be behind this; today Baiyue will analyze what signals are hidden behind this shocking volume and bloody drop.
News front: On one side, it's a bloodbath; on the other side, it's a carnival.
From the news perspective, this market trend can be described as a duality of ice and fire.
Terrifying liquidation: This sharp drop has completely confused both bulls and bears, with a cumulative liquidation of $4.84 million. Many who chased highs and bottomed out 'halfway up the mountain' probably find their accounts deeply in the red.
Data mystery: The most intriguing aspect is the position data. As the coin price plummets, the total value of LIGHT's holdings has shrunk from $53.32 million to $18.79 million, which is easy to understand; the money has evaporated. However, oddly, the contract's open interest has increased from 11.97 million to 18.79 million! What does this indicate? It indicates that during the crash, not only did some people cut their losses and exit, but a lot of new funds and positions rushed in amidst the downturn!
Big players stand in line: A more crucial piece of data is that the 'big player long-short ratio' is as high as 1.63. In simple terms, this means that among the large players, long positions exceed short positions by 63%. After the crash, large players are overall more inclined to be bullish!
Technical perspective: All supports have been breached, but hope often arises in despair.
Let's take another look at the 4-hour K-line chart; the technical signals are equally intense.
Key levels all broken: The high pressure level of 4.6995 and the rebound pressure level of 2.4096 marked on the chart have already been thoroughly pierced by a massive bearish candlestick, without any resistance. The current price is swinging around 0.89, still some distance from the marked bottom support of 0.5600, but not far off.
Massive drop, is the panic selling over?: The volume histogram below shows that this drop is accompanied by a massive trading volume, which is a typical signal of bearish pressure. However, the significant drop of the yellow and white lines above the zero axis also indicates a very strong downward momentum. Yet, there is an old saying in trading: 'Massive volume leads to massive prices.' With such huge trading volumes, who is running away, and who is stepping in?
Baiyue believes that in the narrow range of 0.8910-0.8905, thousands of LIGHT buy orders have accumulated. Although the selling pressure above is also considerable, after the crash, the buying interest at this price level has become active, indicating that some funds are attempting to establish positions here.
What should retail investors do? Operational advice and the concluding 'hook'.
So, in the face of such market conditions, retail investors must not panic; panicking means losing half!
For those with no positions or light positions: This is an opportunity! But remember, don’t go all in! You can tentatively build a base position with a very small amount at the current price (around 0.89). If the price continues to fall, you can gradually add a bit more near these key psychological levels like 0.70 and 0.60.
For those heavily invested and stuck: It’s too late to cut losses now. If you have remaining capital, you can gradually add positions near the support levels mentioned above to average down your cost. If you have no capital left, then just lie flat, uninstall the software, and wait for market sentiment to recover.
For those looking to go short: Tail-end market, many spikes and few dips. The current price is far from the moving average, so it's not advisable to chase shorts. It would be safer to observe again when the price rebounds to the 1.2-1.5 pressure zone.
Baiyue's core view: Are the big players playing 'openly repairing the road, secretly crossing the warehouse'?
This does not seem like a simple crash. The huge trading volume, the increasing open interest against the trend, and the long-biased position structure of large players form a contradictory combination. Typically, pure capital outflows are not accompanied by a significant increase in open interest. This is more likely a 'blood-stained washout.'
Large players may use market fluctuations and leverage to first liquidate a bunch of unsteady long positions, which accounts for that $4.84 million liquidation, creating extreme panic. While retail investors flee in a frenzy, cutting losses, they quietly accumulate at lower levels. The big player long-short ratio of 1.63 indicates that the chips they are acquiring are more about betting on future price increases with 'long positions.' In simple terms, the short-term 'short' in the market is superficial; some large funds may already be planning the next 'long'. The previous low support level of 0.56 will be the 'touchstone' to test all these judgments.
Do you think the support level at 0.56 can hold this time? Stay tuned to Baiyue; in the next issue, we will analyze the subsequent market and reveal the 'cost zone for large investors'!
The market always has opportunities; the key is to operate calmly. Baiyue will continue to monitor on-chain dynamics, and together we will move steadily forward! Follow Baiyue and participate in every attack by Baiyue's villagers! Baiyue will announce the specific entry times and real-time news in the village every day! Chat room
