The 90,000 mark has become a graveyard for bulls! How did I respond?
Market panic spreads, Bitcoin performs a high-altitude tightrope walk at a critical position. Who will win this long-short game?
Last night, Bitcoin once again staged a high-altitude dive, with the price quickly falling back after reaching $88,400[], hitting a low of around $86,542[]. On the 4-hour chart, the DIF line in the MACD indicator has crossed below the DEA line, and both are in negative territory[], a pattern referred to as a 'death signal' by traditional technical analysts is causing widespread concern in the market.
Even more unsettling is that ETF funds have recently shown a continuous outflow trend[], while the outflow of funds from the precious metals market has not flowed into the cryptocurrency sector as expected[]. The current cryptocurrency fear and greed index has fallen to the 'extreme fear' range[], with market sentiment dropping to a yearly low.
01 Market Situation: Dual Pressure from Technical and Financial Aspects
From a technical perspective, Bitcoin's current situation is indeed not optimistic. The price not only surged to $94,600 before retracting about 7%, but the short-term moving average system has also shown a bearish arrangement. The 4-hour K-line has continuously closed in the negative, breaking through the EMA7 and EMA30 moving averages, and even forming a typical 'crow' bearish pattern on the daily level.
Data shows that Bitcoin is currently quoted at around $87,936, testing the key support level of $87,200. This position is like the 'Maginot Line' for bulls; if it is breached, it could open up further declines to $86,000 or even $84,000.
From a financial perspective, the market is further burdened. The U.S. Bitcoin spot ETF recently set a record for nearly $1 billion in outflows in a single day, marking the worst performance since the spot ETF launched in March 2024. Major players like BlackRock and Fidelity have not been spared, indicating the widespread nature of capital withdrawals.
02 Behind the Death Signal: Why is the Market So Weak?
The exposure of Bitcoin's vulnerability this time is not coincidental, but a result of multiple factors. First, the escalation of global trade tensions has put pressure on risk assets in general. As a representative high-risk asset, cryptocurrency naturally finds it hard to stand alone.
Moreover, the average purchase price for Bitcoin ETF investors has reached $97,000, currently facing a net loss of about $1.3 billion. This 'locked-in' pressure means that any rebound will encounter selling pressure from those looking to break even, akin to placing heavy shackles on the bulls.
It is worth noting that the market leverage ratio remains high. Bitcoin futures open interest is still around $59 billion, although it has retreated from a previous high of $80 billion, the deleveraging process has not yet ended. This means that any sharp price fluctuations could trigger a chain reaction of liquidations.
03 Historical Comparison: Are Current Signals Really That Terrifying?
Looking back in history, similar 'death signals' have not appeared for the first time. In March 2025, when Bitcoin fell, the fear and greed index in the crypto market dropped significantly to 15, at which point the market was also very pessimistic. However, in the following months, Bitcoin experienced a strong upward trend.
Technical indicators themselves are inherently lagging. The MACD 'death cross,' while traditionally seen as a sell signal in technical analysis, needs to be combined with other indicators for comprehensive judgment in practical applications. Currently, Bitcoin is consolidating above the super trend support level near $87,000, and the significance of this support level surpasses that of a simple indicator crossover.
From the perspective of market sentiment cycles, extreme fear zones often conceal opportunities. When the fear and greed index falls below 25, the market is usually in an oversold state. Contrarian investors might view these moments of panic as good opportunities for phased entry rather than blindly following the herd to sell.
04 My Response Strategy: Seeking Certainty Amid Uncertainty
In response to the current market, I adopt a 'range-bound' mindset rather than a trend-following strategy. Specifically, I define the range of $86,500-$88,500 as the core short-term oscillation zone, within which I aim to buy low and sell high.
For short-term operations, I prefer to lightly short when prices rebound to the $88,000-$88,500 range, setting a stop loss above $89,000; whereas when prices drop near $86,500, I will consider light longs, with a stop loss set below $86,000. This strategy is particularly applicable in the narrowed volatility of holiday markets.
For medium to long-term investors, I suggest focusing on two key positions: an upward breakthrough of the $91,000-$91,500 resistance zone, and a downward defense of the $84,000-$85,000 support zone. Until these two positions are effectively breached or broken, the market remains in a consolidation phase, and it is not advisable to be overly optimistic or pessimistic.
The market always swings between fear and greed, and currently, fear is clearly in the lead. As the Christmas holiday approaches, dwindling trading volume may exacerbate volatility, but the true direction may only become clear after the New Year holiday when institutional funds return.
Don't forget that in the cryptocurrency market, a 'bloodbath' often marks the beginning of a new round of trends rather than the end. During the pandemic's crash in March 2020, the fear and greed index fell to an extreme panic level of 10-15, but was followed by a historic bull market.
Dear readers, how do you view the current market? Feel free to share your opinions and strategies in the comments: is it better to be greedy in fear, or to hold cash and wait for clearer signals?
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