#BTC Three consecutive green candles stabilize! The liquidation cascade by shorts has ended. The biggest risk in the current market isn’t a drop, but differentiation
On Friday, July 31, the crypto market continued its weak recovery rhythm. Bitcoin steadily printed three consecutive small bullish candles, successfully holding the crucial $64,000 support level. Many people see three straight reds and think the market will directly take off, but the actual tape isn’t that optimistic. The biggest features in the market right now are: the index is recovering, sentiment is cold, price stabilization remains while disagreements are extremely high. The Fear and Greed Index is still in the Fear zone. The long/short game is very tight—this is a typical structural differentiation market, not a broad-based bull market rebound.
1. True market condition: the overall market holds, but strength and weakness are completely split
As of the intraday tape, BTC was still consolidating around $64,800. It closed up slightly over the past 24 hours, firmly defending the $64,000 support zone. Near-term overhead pressure is concentrated around 65,000—65,300. In contrast, ETH is much weaker. It follows the market rebound in sync, but the rebound strength and capital recognition are far inferior to Bitcoin. Spot ETF inflows fluctuate repeatedly and it can’t break out into an independent trend—right now it’s entirely in a passive follow mode.
The most obvious feature of the market at the moment is extreme capital clumping. Top-chain assets with ecosystems and narratives like SOL, BNB, and ADA have very strong downside resistance; they base and turn stronger in an adverse environment. Meanwhile, the vast majority of altcoins—obscure “shitcoin” style coins with no deployed narrative—are basically seeing small gains with minimal follow-through. When the overall market doesn’t move, they go sideways and drift downward. A general advance rally has completely disappeared, and the era of mindlessly riding to profit is over. What’s most worrying now is: the overall market looks red-hot, but your own altcoins stay unmoving, wasting the time window of the rally.
2. On-chain liquidation: shorts exit in batches, near-term selling pressure
The main driving force behind this entire run of three straight green candles is a concentrated liquidation clearance from short leverage. Total liquidations across the whole network in 24 hours exceeded $147 million, with short positions liquidated at close to $93 million, accounting for more than 60%. Many short positions from earlier that bet on continuing to fall deeper have all been washed out in bulk. The passive bid buys lifted the market and helped it hold support.
But one misconception must be corrected here: washing out shorts doesn’t mean a straight-line, one-way surge. The biggest problem in the market now is that there’s no incremental retail capital entering. Market confidence is weak, and multi-layered trapped positions above are clearly suppressing price. Shorts have finished their run, but longs aren’t stepping in to take the relay. In the short term, it’s highly likely to keep oscillating within a range—grinding the market, rotating positions and exchanging chips. The institutional signals are relatively healthy: BTC spot ETFs have ended the streak of continuous outflows and have seen small amounts of return inflows. This suggests the adjustment is just a “shakeout and turnover” in the middle of a bull market, not a trend reversal into a bear market.
3. Macro + industry: a vacuum of negative catalysts, a clear main line
The reason the market has been able to hold up recently is that external negative catalysts are temporarily in a lull.
First, the US Federal Reserve’s July meeting kept rates unchanged. Inflation data cooled, rate-cut expectations warmed, and the US dollar weakened—providing a mildly supportive environment for risk assets to recover in the short term. There’s no macro sell-off trigger in the immediate period.
Second, the US CLARITY regulatory bill is nearing the parliamentary recess. It’s unlikely to land in the near term. The market’s main concern—regulatory tightening as a negative catalyst—is being partially alleviated as uncertainty materializes less.
Third, the real medium- and long-term main narrative is already very clear. Hong Kong financial reforms continue to roll out. The HKD-compliant stablecoin ecosystem is accelerating its formation, and the RWA tokenization narrative of real-world assets continues to strengthen. Traditional financial institutions are steadily moving in to set up positions in on-chain assets. This is the steadiest and most repeatable main track for the second half of the year.
4. Track selection: only do the leading mainline, stay away from pure hype garbage rallies
In the current choppy and differentiated market, choosing coins is more important than judging up or down.
✅ Focus on leading public chains and the RWA asset tokenization track. There’s policy support, institutions involved, and a continuous narrative—high capital recognition. In a range-bound market, it’s easier to develop an independent trend.
❌ Firmly avoid MEME, pure emotion-driven speculation, and “three-no” altcoins with no ecosystem, no deployment, and no capital. These coins’ rebounds are extremely short-lived. Chasing the pump means becoming the bag-holder, and the margin of error is very low. In addition, the DeFi sector is still cooling down. There are no signals of a rebound in on-chain activity. Continue to observe in the short term and don’t casually bottom-pick.
5. Outlook & trading approach: don’t bet on one-way moves, strictly control position size
BTC short-term range support: 63,600—64,000 resistance: 65,000—65,300
1、A valid breakout above the 65,300 resistance level breaks the consolidation structure, opens up room for the rebound, and you can add positions moderately in line with the trend;
2、A valid breakdown below the 63,500 support level means this corrective recovery is over, and the risk of the next pullback returns. You need to reduce positions in time to manage risk.
This article is only for market review and analysis and does not constitute any investment advice
$BTC
