The cryptocurrency market is surprisingly quiet; you can hear a pin drop. Is this the calm before the storm or the solitude after the celebration?
As the smoke from the leverage liquidations gradually clears, the cryptocurrency market has fallen into a strange silence. The past scenes of frantic shorting and stubborn big players holding on are nowhere to be seen, replaced by a 'lying flat' state where no one dares to short or hold positions.
This cooling-off period after the double kill of bulls and bears reminds me of an interesting scene: the market maker swings the price stick, only to find that there are no players left to harvest, and he has become the loneliest person.
01 The Battlefield Remains of the Double Kill
In the October that just passed, the cryptocurrency market experienced a classic double kill. Bitcoin quickly retraced after reaching a high, and a major cleanup of leveraged funds took place in the derivatives market.
In this battle, the total liquidation amount across the network reached $66.41 million. In the first phase, the market quickly surged past previous highs, leading to the liquidation of a large number of short positions; in the second phase, the price swiftly turned down, wiping out all high-position long positions.
This precise 'double kill' scene could almost be written into the textbook of cryptocurrency trading.
Market sentiment has also quickly returned from frenzy to rationality. The fear and greed index has fallen from a high of 60, with a net outflow of $1.59 million in funds during the day, and some short-term funds have chosen to exit and observe.
The essence of the double kill is the market's self-cleaning mechanism. It clears unstable speculative positions, laying the foundation for subsequent market trends. Like a forest fire, although temporarily painful, it creates space for new growth.
02 Cooling Period: The market lies flat, and market makers have headaches
The most interesting phenomenon in the current market is: no one dares to short, and no one is holding positions. This state, on the contrary, has become a problem for market makers.
In a healthy market, when market makers raise prices, they can rely on short-sellers for liquidity, or depend on large holders as counterparty positions. But when both sides are 'lying flat', raising prices loses its meaning.
Market makers cannot arbitrarily raise stock prices for three reasons: the timing of the rise is wrong, the overall market trend is unclear, or there are issues with the underlying asset or funding chain. All three factors are present in the current cooling period.
From on-chain data, the market is showing typical bottom characteristics. Short-term holders have realized massive losses, panic selling has reached a peak, and Bitcoin reserves on exchanges continue to decline, indicating that funds are flowing out of exchanges.
These signals often indicate that a price bottom is forming.
03 NIGHT Token: The New Battlefield for Long and Short?
In this larger context, the upcoming NIGHT token has caught my attention. Midnight Network is a blockchain platform focused on privacy, built by Input Output Global (the Cardano development company).
The total supply of NIGHT tokens is 300 billion, with 80% allocated to the community. This large-scale community allocation may lay the foundation for trading activity after the token is listed.
The key question is, will NIGHT repeat the old path of double kills?
From the perspective of token economics, the airdropped tokens of NIGHT will unlock 25% every 90 days within 12 months after being received. This progressive release mechanism can reduce the selling pressure in the early stages of listing, avoiding drastic price fluctuations.
However, in the cryptocurrency market, especially when new coins are listed, long and short battles are almost inevitable. Market makers will test market reactions through trial trading, including rapid price increases and deliberate pressure testing.
04 How to Survive the Next Double Kill
As a veteran of the cryptocurrency market, I have summarized three survival rules:
First, stay away from high-leverage trading. In a market of double kills, high leverage is the biggest killer. Data shows that single-day liquidations of hundreds of millions of dollars have become the norm in the market.
Secondly, learn to identify market maker trial trading signals. Market makers usually conduct trial trading before raising prices, manifested as a sudden large price increase or decrease in calm conditions, leaving long upper shadows or lower shadows on the candlestick chart.
Finally, remain calm and patient. When the market is in panic, the fear and greed index often drops to extreme values (such as below 25), which is often the time for contrarian operations.
In the cryptocurrency market, 'stop-loss lines are cut in half, and then go to spend money in heaven and earth' This kind of joke reflects the helplessness of investors facing significant losses. But real professional investors rely on scientific strategies rather than luck.
The open interest of Bitcoin perpetual futures contracts has decreased by about 30% from the peak in October, with traders 'unwilling to reinvest large amounts of capital'. The Bitcoin reserves on exchanges have fallen to their lowest level since 2018, while stablecoin reserves remain relatively stable.
What does this mean? Funds have not left the market; they are just waiting for the next trigger point.
The market will never lack volatility; what it lacks is the eye to discover volatility. When most people are lying flat, those who stay awake are already queuing at the entrance of the next opportunity.
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