市場下殺、情緒崩潰，驗證紀律的最佳時機

Welcome back to Monsterblockhk's weekly report. Two weeks ago we made it clear that "With the market in a short-term uptrend and leveraged, profit-taking was the way to go". Now that the market has entered a healthy correction zone, as expected, it is the right time for rational investors to start re-positioning and stabilizing DCA.

ETF inflows have slowed but not yet turned negative, leverage is gradually deleveraging, capital rotation in the chain has intensified, and sentiment indicators have cooled in tandem, all of which provide room for long-term investors to rationally reload their positions. In this kind of volatile and opportunistic mid-period market, success or failure does not depend on forecasts, but on discipline, rhythm and execution.

In this weekly report, we will look at the ETF trend, recent weekly news and macro events to help you see the structure and regain the initiative during the market correction period, and lay out the golden starting point for the next wave of explosion.

ETF Funding Turns Negative; Next Wave of Accumulation Opportunities Amidst Turbulence

According to the chart of SoSoValue, as of July 31st, Bitcoin Spot ETF recorded a one-day net outflow of US$115 million, with total assets shrinking to US$152.01 billion, and the price of Bitcoin closed at US$116,785.8, the net outflow of Bitcoin Spot ETF reached US$115 million, with total assets shrinking to US$152.01 billion. In the past seven days, outflows and inflows were staggered, with negative inflows for two consecutive days from July 22 to 23, amounting to about -50 million and US$100 million respectively, followed by a strong rebound on July 24, with inflows exceeding US$200 million in a single day, which was the highest in the whole week. However, the inflows gradually weakened from July 25 to 30, and then large net outflows appeared again at the end of the month, forming a complete "V-shape rebound and then turn weaker" structure. This formed a complete "V-shaped rebound and then weakening" structure.

As seen in this week's change in capital flows, the market entered a stronger correction period, with ETF return momentum not sustained, reflecting short-term confidence shocks. The rapid shift from large net inflows to strong net outflows coincided with the correction we had forecast in recent weeks. However, the correction was not accompanied by violent panic and total assets remained above US$150 billion, indicating solid fundamentals. At a time of heightened fear and downward price testing, this presents a strategic opportunity for medium to long term investors to enter the market. A DCA allocation to quietly add to positions as the market ebbs may be the best time to prepare for the next rebound.

Long Leveraged Positions Explode, ETH and BTC Become the Main Battlefield

Over the past 24 hours, a total of 185,507 traders were liquidated, with a total amount of $759 million, of which $706 million was liquidated in long orders, much higher than the $53.13 million in short orders, indicating that the main reason for this round of correction is the overleveraging of long positions. In terms of assets, ETH led the way with US$228 million, BTC with US$178 million, followed by SOL (US$44.03 million) and XRP (US$41.82 million).

The gradual unwinding of the leverage bubble underscores the importance of risk management. While the liquidation amounts are impressive, the correction was already well underway and echoes our warning a few weeks ago that the market was overheating. The large number of longs that have been hit shows that investor sentiment has shifted from greed to fear, making this an ideal window for adding to positions and DCAs. The technical correction due to overleveraging will not only help release risk, but also set the stage for the bull market to continue in the second half of the year. Investors should be prudent in laying out their positions and entering the market in batches, and view the sentiment reshuffle as a golden opportunity for long-term crypto asset allocation.

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Market Correction on Tap as Fear Indices Plunge

According to CMC data, the Fear and Greed Index fell rapidly to 59 this week from 70 last week, indicating a shift in sentiment from overheated to markedly more conservative and hitting a near one-month low. As you can see from the chart, the bitcoin price pulled back from its highs in tandem with the decline in sentiment, hitting a low of around $114,000. Despite the strong pullback, overall volume remained at neutral levels and did not trigger a chain of panic, reflecting investors' wait-and-see approach to the correction.

As we expected a few weeks ago, this round of sentiment retreat and price correction is a typical bull market mid-course correction, aimed at cleansing short-term fickleness and reshaping upside fundamentals. The increase in short-term volatility is a good opportunity for DCA (fixed duration accumulation) strategies, especially as sentiment has weakened and prices have retreated, which is the perfect time to "buy on fear". In the medium to long term, overall capital momentum and fundamentals have not been fundamentally undermined, and the market has further revealed the attractiveness of the stage lows. Investors should take the opportunity to strengthen core positions and wait for the market to resume its uptrend.

Master Chains Holding on to Core Pools, Beta Chains Continue to See Funding Withdrawals

According to Artemis data, Ethereum once again became the largest net inflow chain in the past 7 days, recording a net inflow of more than $200 million, which is the center of gravity of capital, while Solana and OP Mainnet each recorded an inflow of more than $50 million, indicating that capital is flowing back to the fundamentally stable and highly liquid main chains. On the other hand, Base and Arbitrum recorded significant net outflows, with Base reaching US$200 million and Arbitrum around US$80 million, reflecting a clear shift in capital flows, with Beta chains facing pressure from profit-taking and safe-haven exits. It is worth noting that Unichain and Polygon PoS also saw outflows, which is in line with the recent wave of out-of-the-money positions.

Capital flows reflect the onset of a structural correction in the market, as investors are proactively shifting their positions to more shock-resistant main chain assets, validating our warning of overheating a few weeks ago, and highlighting the importance of risk management in the case of Base and Arbitrum, which were the hotly-anticipated Beta chains in the early stages of the market, as the overcrowding was followed by a rapid withdrawal of capital. When the market turns from greed to fear, it is a golden time to optimize positions and wait for a rebound. At this stage, it is better to focus on the main chain and build a solid stack for the second half of the year.

Reallocation of Funds Between Chains Continues, Solana Continues to See Large Outflows

According to deBridge data, between July 26 and August 1, Solana was once again the largest outflow chain, with Ethereum dominating the flow, followed by Arbitrum and Base, showing the thickest flow. Ethereum is not only the main source of Solana's capital, but also the main exporter of capital to several chains such as Base, Ethereum is not only the main source of capital from Solana, but is also the main exporter of many chains such as Base and Arbitrum, which is a clear two-way activity and is the core of the bridge, while Base continues to attract capital from Arbitrum, Ethereum, and Avalanche, and continues to be positioned as an emerging liquidity hub. On the other hand, although Arbitrum is one of the major receiving chains, the magnitude of its outflow is not to be underestimated, indicating that capital is rapidly rotating and reallocating between Layer 2.

The path of capital distribution reveals that the market is undergoing a round of structural adjustment: Solana, a highly volatile asset, has seen large outflows in the current sharp market decline, possibly due to passive liquidation of positions or locking up of profit-making capital; while the apparent return of capital to Ethereum, which is characterized by stability and safety, indicates that part of the capital is being deployed back to the high-trust chain in a preferential manner, underscoring the importance of risk management. Risky assets such as Solana have been under the heaviest pressure in the recent wave of massive long liquidations, but for medium to long term investors, this is a good time to take advantage of this opportunity. We have been warning of a potential correction over the past few weeks, and the current pullback has provided room for both "get in on the ground floor" and "add to the panic" strategies.

Chain Funding Falls Back Slightly, TVL Holds Steady at $135B Levels

According to DefiLlama, as of August 1, DeFi's Total Locked Positions (TVL) stood at $135.481B, showing a slow downward trend over the past week, slightly lower than the July 28 high. Despite the price volatility, TVL has not shrunk dramatically, reflecting that some capital still remains in the chain to wait and see. During the same period, the total market capitalization of the stablecoin was $266.95B, slightly higher than the previous value, indicating that there has not been a large-scale withdrawal of the off-market capital pool. The 24-hour trading volume of DEX and Perps was $19.387B and $18.468B respectively, which were in the high range, indicating that trading sentiment has not yet cooled down despite the correction in the market.

The TVL curve is moving lower, but only to a limited extent, suggesting that capital is adjusting positions in a more cautious manner. After the expectation of a market correction in the past few weeks has gradually materialized, this round of correction has become an opportunity for strategic deployment. the TVL has stabilized, implying that some long term funds are choosing to cover their positions on the low side and maintain their chain allocations, showing a sense of rhythm of "not chasing the highs, but dare to add to their positions". The stable currency size remains high, which means that the market still has plenty of firepower to wait for the next round of opportunities. In the face of the current correction, investors are advised to adopt the DCA strategy to continue to absorb, focus on the fundamentals of the stable agreement, and gradually build up a medium-term position in preparation for the new wave of uptrend that may be launched in the latter part of Q3.

Capital Rotation Intensifies, Prices Fluctuate Dramatically

According to Crypto Bubbles data as of August 1, the overall market suffered significant selling pressure this week, with most mainstream and high liquidity currencies experiencing double-digit losses, including MKR (-14.1%), BONK (-20.1%), LDO (-12.0%), UNI (-10.2%) and SHIB (-9.5%). LDO (-12.0%), UNI (-10.2%) and SHIB (-9.5%), indicating a concentrated withdrawal of capital. However, there are also a few underlying stocks that have strengthened against the trend, including HEX (+69.3%), PLSX (+52%), PLS (+41.9%), IP (+14.8%), and FORM (+15.1%), which dominated this week's list of gainers. This indicates that short-term capital has shifted to small- and mid-cap stocks and high beta tokens, seeking volatility to hedge against volatility. This shows that short-term capital has shifted to small and mid-cap issues and high beta tokens to seek for volatility arbitrage space.

This week's sharp decline and divergence further confirms that the market has entered a period of technical correction, with rapid deleveraging of highly valued and leveraged positions in the early stages of the market, resulting in a downward spiral of price declines and liquidation of long positions. This is a critical time to restructure positions and conduct DCA operations. Investors should be cautious of volatility and add to fundamentally supported assets to build a base for the main uptrend in the latter part of Q3. Looking back at the past few weeks, our warning of a correction has come true, and the next period will be a great time to "stack your chips in a panic".

August Token Unlocking Observations: Pullbacks are Coming, Time for Low Absorption Allocations

As the market enters a technical correction phase, August will see a number of large unlocking events, bringing further volatility potential to the consolidation structure. According to the latest data from Token Unlocks, TRUMP will be unlocked after 12 days for US$775 million (45.35% of market capitalization), which is the largest unlocking event of the month, and is likely to trigger short-term price pressure. Similarly, ZRO (23.13%, $45.76 million unlocked), STRK (353.%, $142 million unlocked), FTN (46.4%, $88.6 million unlocked) and other high-ratio unlocked items are also of concern, and they may be subject to a volume sell-off or increased volatility as the market has not yet regained its risk appetite.

On the other hand, among mainstream narrative assets, some structurally healthy targets with stable communities are showing resilience. SUI is expected to unlock US$128 million (1.27% of market cap) after the 26th, which is a large unlocking but a relatively slow release rate, and the market is already reflecting the pressure of supply in advance, making it a good candidate for a low-buy. Also worth noting is Ethena (ENA), which will unlock around US$10.37 million (0.64% of market capitalization) by the end of the month, maintaining solid performance during the price bottoming period.

This type of assets with medium-to-high market capitalization, stable unlocking rhythms and sustainable narratives are the preferred choice for stabilizing positions or laying them out in batches during periods of market turbulence. In line with our recent emphasis on the logic of adding to positions during pullbacks, August is a golden window to build core positions in batches using DCA (fixed duration accumulation) strategies. Fear often leads to undervaluation. As the market corrects, capital should focus on potential targets with sound structures, clear narratives, and favorable community to unlock ratios, in order to lay the groundwork for the next major upturn.

Ethernet's 10th Anniversary: From Ideal Experiment to Global Financial Infrastructure

Since the launch of its main network in 2015, Ether has gradually become one of the core pillars of global digital finance, starting from the early ICO crowdfunding of more than $18.3 million, and experiencing the DeFi Summer and the NFT craze. The price of ETH has risen from US$10 in 2017 to an all-time high of US$1,450, and has been revalued over the long term by ETF approvals and institutionalization. Nowadays, enterprises such as Sharplink and BitMine have even followed the micro-strategy model to include ETH in their reserves, and the participation of institutions continues to rise, further stabilizing their asset positioning.

The evolution of ethereum mirrors the maturation and reshaping of the crypto market as a whole. From a simple smart contract platform, it has risen to become the cornerstone of the global open financial ecosystem, not only supporting decentralized applications, but also attracting the gradual integration of traditional finance. Looking ahead, policy proposals such as the Genius Act are expected to clarify the boundaries between the regulation of digital assets and their application, which will help stabilize confidence in the ETH market and attract more mainstream capital to the market. Overall, against the backdrop of high inflation and interest rate uncertainty, ETH is still an asset with reasonable valuation and deep development potential, and is now in a favorable position for medium- to long-term planning. Investors should continue to pay attention to its technological upgrades and policy progress, so as not to miss the starting point of the next wave.

BNB breaks out to new highs, sector rotation is continuing.

Recently, BNB has broken through the all-time high of $855, with 24-hour volume surging by 75%, and its market capitalization surged to US$119 billion, locking it into the fifth place in the cryptocurrency market capitalization ranking. According to Coinglass data, more than $3.72 million of short orders were liquidated in a short period of time, and only a few long orders suffered losses, indicating that the market is highly bullish. In addition, the BNB RSI indicator has been in overbought territory for two consecutive weeks, with the latest value reaching 86, implying that it may face a technical pullback in the short term. Meanwhile, BNB open interest surged to US$1.62 billion, reflecting strong expectations in the derivatives market.

The confidence in BNB prices and volume that followed the XRP verdict has carried over to the mega-cryptocurrency sector. The rally is no longer limited to memes or low-cap tokens, but rather to high-cap items with utility. Based on the historical cycle pattern, every bull market has seen a "pilot leg" of mainstream tokens leading the way before alt season, with BNB and XRP taking the lead, followed by ETH and other top 10 application-based tokens (e.g., SOL, AVAX), which are likely to follow, laying the groundwork for the next wave to resonate in the market. Investors should pay close attention to the technical charts and changes in capital flows to capitalize on the key rhythms of mainstream rotation.

Legalization Boosts Liquidity, but Shakes Crypto's Decentralized Nature

The U.S. SEC's recent approval of an "in-kind redemption mechanism" for Bitcoin and Ether spot ETFs marks a significant shift in regulatory policy. The system allows authorized participants to exchange physical crypto assets directly for ETF shares, which not only reduces costs and market friction, but also enhances market efficiency and liquidity compared to traditional cash redemptions. According to reports, BlackRock, Fidelity and others have long been pushing for an in-kind redemption system, and the success of their push has paved the way for institutional capital injections. In addition, IBIT has been allowed to expand the restrictions on the option portion, which symbolizes that regulators have a high degree of confidence in the risk tolerance and institutional participation in the ETF market.

However, this kind of system optimization in the name of efficiency has also quietly reshaped the original decentralized spirit of the crypto market. The physical redemption mechanism is limited to authorized participants, with no way for retail investors to participate, in effect consolidating the monopoly of institutions, which runs counter to the concept of "everyone can participate without trusting a third party" advocated at the time of Bitcoin's inception. As regulation becomes more entrenched, Crypto is moving in the direction of greater control and centralization, gradually moving away from its core vision of empowering individuals. While institutional capital will push up market capitalization and liquidity in the short term, investors should also be aware of the shift in governance behind this "legitimization" and the crypto market may face a fundamental tug-of-war between freedom and efficiency in the future.

With Fixed Income on the Rise, DeFi Officially Enters an Era of Sound Capitalization

Decentralized finance is moving steadily away from a highly volatile and leveraged speculative situation towards a sustainable financial system. According to the latest data, Fixed Yield's Total Locked Position (TVL) in the DeFi ecosystem has reached US$4.88 billion, of which as much as US$3.87 billion is collateralized, deployed in mainstream currency markets such as Aave, Morpho, Euler and Silo. This not only demonstrates the market's confidence in fixed income products, but also shows that even in a bear market, capital still chooses to stay in the market and seeks a stable source of income, with Pendle's PT Fixed Income model as the core representative, which is gradually becoming the most convincing growth engine in the DeFi ecosystem.

In traditional financial markets, fixed income assets such as U.S. bonds, corporate bonds and structured notes have a combined global market capitalization of $130 trillion, demonstrating that stability is a necessary prerequisite for capital expansion. Today, DeFi Fixed Income's rapid growth is replicating this path, attracting institutional capital, family offices and high net worth individuals who are beginning to position themselves not to chase 100x returns, but to value the potential for risk-adjusted returns. This is not only a shift in capital flows, but also a cultural maturation and transformation that is opening the next door for DeFi to shed its label as a "currency speculation casino" and open the door for the general public and institutions alike, and PENDLE, as a fixed income pioneer, is undoubtedly at the forefront of this structural change.

Zora Market Share Shuffle: From Cold Start to Overwhelming Leadership

Although Zora's initial launch was limited, the number of tokens issued exceeded 100,000 in just two days, and it quickly swept the entire creator economy market. According to Dune data, Zora set a record of 54,009 and 51,000 tokens on July 27th and 28th respectively, and its market share surged to 92.5% in 48 hours, completely overturning Pump.fun's original 88% market share, which is now only 7.5%. Zora adopts the mode of "Posting as Coin Issuance", which instantly transforms social content into ERC-20 tokens. Zora adopts the model of "Posting as Coin" to instantly convert social content into ERC-20 tokens, which is a perfect solution to the pain point of community-driven and instant cash demand, and has successfully attracted a large number of creators and speculators to flock to Zora.

Zora's explosion continues the "coin as narrative" investment trend of recent months, with its native token, ZORA, hitting a high of $0.09944 on July 27th, demonstrating a high level of resonance with the platform's growth. The phenomenon is similar to previous topical platforms such as LaunchCoin and Pasternak, where narratives drove community activity and pricing frenzies. Although ZORA's current price has fallen a bit (to $0.083), technical support remains strong. This surge is not only evidence that the creator economy is entering a new narrative phase, but also reflects rising expectations for the platform's innovative mechanisms and scalability.

Shoutdotfun Turning Community Passion into Wealth: Yappers' New Battlefield for Making Money

This week, Shoutdotfun, a coin-issuing platform that successfully combines Social-Fi and Meme Economy, has become an emerging platform that deserves attention recently. Its most distinctive feature is that it transforms coining into a social capital activity, opening it up for pre-sale only to highly engaged X accounts, eliminating institutional preemption and package buyers, and allowing creators and users who drive the conversation to profit directly from the transaction fees. This community-driven reward mechanism enables many micro-creators to participate in the early coin-issuing and price fluctuation bonuses, which in turn stimulates the natural proliferation of the platform and realizes decentralized promotion.

At a time when Crypto narratives are becoming increasingly fragmented, Shoutdotfun offers an explosive platform with great potential. Its model not only focuses on creating content, but also quantifies voice and influence into economic returns, formally transforming the attention market into a tradable asset. This strategy is similar to Zora's "posting as coin", but emphasizes the process of community participation and fermentation of topics. As the desire for an author-friendly platform continues to grow, Shoutdotfun is likely to be at the center of the next wave of fascination narratives. For investors, early attention to such new platforms that combine "participation with earning" will not only capture the traffic dividend, but also provide insights into the content- and community-driven transformation dynamics of the Crypto market in the future.

Macro News

Interest rate policy shift imminent as Fed loosens stance

Although the U.S. Federal Reserve is expected to leave interest rates unchanged at its July meeting, the dissenting voices of many of its members suggest that internal divisions are intensifying and that the chances of a future policy shift are rising. According to Ainvest, two voting officials, Waller and Bowman, have expressed a preference for an early rate cut. Waller said that inflation risks have diminished significantly and that they should not wait for the labor market to deteriorate, while Bowman stressed that he would support a rate cut in July if inflationary pressures remain under control. If they both vote no in the same meeting, it will be the first time since 1993 that the Federal Reserve Board's assessment of the economic outlook is clearly cracked. Trump's renewed pressure for easing, while not directly affecting policymaking, has heightened concerns about the direction of policy in the coming months.

Although the Federal Reserve Board maintains a hawkish stance, internal support for maintaining high interest rates has weakened significantly, and expectations for a rate cut in September are rising. The market is now generally predicted that the rate cut in September, the probability of 1 yard (25 basis points) has been more than 50%. This implies that the Federal Reserve is in a transition phase of watching and preparing for a change in direction, and is not a continuation of strong hawkishness. For the crypto market, this is the right time window for a medium-term position. The shift in interest rates will inject fresh water into risky assets, especially for highly sensitive mainstream currencies such as Bitcoin and Ether, and the return of capital flows will significantly boost price performance. However, as the policy is not yet clear, it is not advisable to bet too much on it. It is better to rationally invest in small batches on the low side, and wait for the confirmation of the policy turn before adding more money to the market.

U.S.-China Tariff Buffer Extended, Giving Global Markets Room to Breathe

After two days of trade talks in Stockholm, China and the United States reached a consensus to extend the tariff moratorium to avoid the impact of a new round of tariffs scheduled for August 12th. Chinese Vice Premier He Lifeng noted that the two countries had had "in-depth, frank and constructive" dialogues and agreed to seek an extension of the tariff freeze for another 90 days. Although the U.S. side has yet to finalize its extension plan, U.S. Treasury Secretary Bessent called the talks "substantial and constructive," covering such key issues as China's oil purchases, the flow of science and technology between China and Russia, and the imbalance in the manufacturing sector. This provides a political foundation for a possible summit between the two leaders before the end of the year, and sends a signal to the world that the talks are easing.

The extension of the agreement will help to ease global macroeconomic uncertainties and market pressures in the short term, and provide stabilization for the recovering real economy and supply chain. The tariff freeze prevents further cost increases and inflationary pressures from spreading, providing a respite for risky assets and indirectly supporting the short-term rebound of crypto assets such as Bitcoin. The move also shows that global capital is still concerned about trade stability and policy coherence, and crypto, as a risk appetite indicator, may benefit from the macro dovish atmosphere in the near term. However, we need to pay attention to the actual progress of the negotiations and the direction of the supply chain game before we can set the tone for the medium to long term market.

Chained Data Analysis:

Ether's Quiet Recovery: ETF Position-to-Price Ratio Bottoms Out in Sync

According to the chart, the ETH/BTC price ratio and ETF position ratio have both declined since 2024, and it was not until mid-2025 that the decline stopped and rebounded. The price ratio, represented by the white line, has rebounded steadily since bottoming out in May 2025, while the ETF position ratio, represented by the blue line, has simultaneously hit a new high for the year, surpassing the 0.12 level and returning to last year's highs. This means that capital is being reallocated back to Ether, with demand for ETFs from the institutional side increasing significantly, setting the stage for potential price upside.

The reversal of price and capital flows often precedes market sentiment. Although the recent recovery in Ether has not yet reached a clear climax, the simultaneous increase in the ratio of capital to price suggests that a bottom may have been identified, and that once the price breaks above the critical $5,000-$6,000 range, the next wave of capital rotation into high-risk assets (Altseason) will most likely begin. History has shown that the most frequent reversals occur when there is widespread disbelief in Altseason, or when prices are unanimously expected to fall. This moment of skepticism and apathy is the best condition for the market to brew, the gunpowder is ready, the only thing missing is a match.

Bitcoin is rock solid, 97% wallet still in profit zone

Bitcoin faced a significant wave of selling pressure over the weekend, with not only short-term investors taking profits, but also some long-term holders exiting the market. However, unlike many Altcoins, which have seen significant pullbacks, the price of Bitcoin has remained steady at its highs, with little apparent movement. According to Glassnode, around 97% of Bitcoin supply is still in an unrealized profit position, well above the historical average of 75% and +1 standard deviation of 91%. This means that even in a volatile market, the majority of investors are still booking profits, reflecting a high degree of consensus and confidence in the intrinsic value of Bitcoin.

This resilience of the price and supply structure is no accident. As the orange line in the chart shows, whenever supply is in a very high percentage of unrealized profits, it usually triggers a wave of profit-taking, but this time there has been no major correction in the price, suggesting that capital has not shifted to more risky assets such as torrents, but has chosen to continue to embrace Bitcoin as the core of its value. This stability is not due to a lack of volatility, but rather to a deep-seated consensus and recognition of Bitcoin's long-term value. At a time when the overall market is still skeptical and volatile, Bitcoin has demonstrated its unique resilience and position as the asset most agreed upon by both institutional and retail investors.

Short-Term Holders' Cost Band Ranges: The Core Defense of Bitcoin's Long Support

The graph shows the Realized Price of Bitcoin for short-term Bitcoin holders over different holding periods (from within 24 hours to 6 months), which is the average cost of buying Bitcoin for each subgroup of Bitcoin holders. These Realized Prices form a fast-to-slow cost band, reflecting the average price at which money enters the market and market sentiment over time. It is worth noting that the realized prices of all short-term holders are currently in the range of $103.7K to $117.2K, and the current price is still above this band, suggesting that even though the market has been consolidating sideways in recent days, short-term funds are still generally in a profitable position, forming a key technical support band.

This "cost ribbon" of realized prices not only shows the resilience of Bitcoin bulls, but also marks the bottom line of market sentiment. A pullback to the $110K to $117K area could trigger support buying from previous entrants, reinforcing the area's role as a key technical and psychological line of defense. The effectiveness of this zone is further enhanced by its high degree of overlap with the low-flow area of the chain's cost distribution. Whether the timing of the entry is 1-day, 1-week or 3-month, it suggests that there is a consensus on the cost of this zone, which is a key indicator of potential rebound and risk pressure in the market.

Investors' confidence stabilized, the cottage currency is entering the capital layout window.

According to Glassnode, relative unrealized profits on BTC have broken through the +2 standard deviation range for the first time since the 2021 highs, representing a significant gain for investors in the overall market. As can be seen from the contrast between the orange blocks and the black price line in the chart, most investors have chosen to hold on to their positions even though Bitcoin is at historically high levels, reflecting their confidence in the future of the market and their recognition of Bitcoin as a dominant asset. This phenomenon is very similar to previous bull market phases, in particular, the market sentiment was highly optimistic prior to all-time record highs (ATH), and the unrealized profit-to-market cap ratio was also in the same range, further confirming that the market has entered a potentially frenzied phase.

This highlights the relative strength of Bitcoin in this cycle, which has not only outperformed most of the cottage currencies, but has also reinforced its role as a safe haven for capital. However, because of this, there is potential pressure from un-realized profits in the market, and there is an incentive for capital to shift to torrents. With the maturity of Altseason technology, once the liquidity is shifted to the other side of the market, the cottage currency sector will see a rapid capital inflow and explosive market. As the volatility of Shanzhai Currency is much higher than that of Bitcoin, the rotation is fierce but the window of time is extremely short. Investors should take advantage of the fact that confidence is still focused on Bitcoin to lay out liquidity and narrative-supporting targets in advance in order to capture the next wave of capital spillover dividends.

Supply Disconnect Appears, 115K Price May Become Long/Short Critical Point

From the Bitcoin cost basis heat map, we can see that the market has accumulated a large cost basis between USD117K and USD122K, and the color is obviously red, reflecting that this is the area where the main capital is intensively deployed, that is, the average price at which most of the current holders are entering the market. Below the current price, especially between US$115K and US$110K, the color of the heat has turned drastically cooler, forming an obvious volume airgap, indicating that there is a lack of real transaction support in this area, which is the result of a direct breakout during the strong upward movement of the price without structural exchange of chips.

This type of fault zone has the potential for suction, and if prices fall from the highs, the market tends to "retest" this zone in search of new support. If the 115K area cannot be firmly defended, prices could quickly dip to 110K or below in a "free-fall" type of adjustment. For long term investors, this area can also be viewed as a potential position building area for strategic DCA (fixed duration accumulation). Especially when risk aversion is on the rise, whether the support can be stabilized or not will be a key signal for a change in trend.

Conclusion

This structural pullback is the turning point we predicted two weeks ago: when overheated sentiment and stagnant prices coincide, it's time to take profits and prepare for a pullback. Now that the market has cooled off and sentiment has cooled, the market is healthier and closer to the starting line for the next major uptrend.

Disciplined DCA and steady position taking is the real source of victory through market rotation. Don't FOMO when prices are high, but hesitate to enter the market when it's time. Bulls don't wait for anyone. If you miss a pullback, you may miss the entire uptrend. Now is the time to test your execution and patience. Pulling back is a rational person's opportunity for excess.

If you've learned something from this week's update, or if you've learned more about the market, feel free to follow us on Monsterblockhk! Twitter and join our Telegram GroupsWe will be able to share and discuss the next wave of opportunities!

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