The feeling in the market over the past couple of days can be summed up in one word: urgent.🙂

On January 31, when Bitcoin fell below 80,000 USD, the market shifted from a correction to a panic sell-off.

The bulls are not looking to sell, they are being forced to sell by the system.

More importantly, this time it is not just the crypto market that is shaking; precious metals are also experiencing significant volatility.

This indicates that the liquidity contraction behind this round of sell-off is not simply because someone suddenly lost confidence in a certain coin.

Bitcoin has been probing down from below 80,000, with a low approaching around 75,000 USD.

Ethereum fell below 2,300 USD, with intraday prices sliding to even lower levels.

Solana has also been kicked below $100. 😬

What truly disrupts the rhythm is liquidation.

There are slight differences in multiple statistical measures, but the magnitude is very close; the total market passive liquidation is approaching $2.6 billion, and the majority is mostly on the long side.

You can understand liquidation as the exchange forcibly closing leveraged positions. It’s not a subjective trade; it’s a forced liquidation, so the price tends to drop faster.

Why is this wave so fierce? I prefer to see it as two forces overlapping.

On one side are the structural issues in the crypto circle; too much leverage accumulated, and once a key price level breaks, it triggers a chain reaction.

On the other side, the macro environment is stirring things up.

Recently, the market has been very sensitive to the personnel and policy signals of the Federal Reserve; once the dollar strengthens, risk assets will struggle to breathe.

Even traditional safe havens like gold and silver can experience significant pullbacks. It's not that faith has collapsed, but rather that positions are too crowded; when everyone tries to exit at once, the door gets jammed.

My stance leans towards aggression, but my approach will be more realistic.

I will capture rebounds, but I will also lean more towards shorting on rebounds.

The reason is simple: I view the current situation as a downward trend, and the probability of success in shorting along the trend is higher.

However, there is never a lack of rebound space in a downward trend, especially in this kind of liquidation drop; the more panic-driven the bottom is, the easier it is to bounce back.

My strategy is to wait for the market to release the panic from the sharp drop.

If there is a slowdown in declines, a decrease in transaction volume, and a noticeable drop in open interest on the contract side, while funding rates turn colder or even negative, it usually means that short chasing is starting to crowd, making short-term rebounds easier to occur.

I will take small positions for rebounds, but for my main position, I will be more patient and wait for higher levels, prioritizing finding better shorting points. 🙂

In the next two to three days, I will focus on several hard signals.

Can Bitcoin reclaim and stabilize above $80,000?

If it just pokes and gets slammed back down, then the rebound feels more like giving trapped positions an escape window.

Is there a significant support near $75,000?

If every rebound is weak and the declines are smooth, it indicates that buying pressure has not yet awakened.

On the contract side, I will look at whether the open interest and funding rates can continue to cool down; if leverage doesn’t decrease, the market won’t behave.

Macroeconomically, I will simultaneously look at the direction of the US dollar and US Treasury yields, and then see if gold and silver can stop this extreme volatility, because their stability often decides whether the market is in emotional fluctuations or undergoing larger-scale deleveraging.

Risk warning in one sentence: the biggest enemy at this stage is not direction, but volatility; controlling positions is more important than guessing right.

My conclusion is straightforward: rebounds can be traded, but don’t mistake a rebound for a trend reversal.