Live Broadcast Day 14 | Complete Market Analysis of BTC/ETH Repeated Fluctuations at High Levels

Good evening, everyone. Today marks the 14th day of my live broadcast. The most intuitive feeling in the current crypto market is: Bitcoin and Ethereum are stuck in a high-range tug-of-war, with rapid upward moves followed by sharp declines, and quick rebounds after drops. There is no clear trend, with bulls and bears frequently fighting each other. Today, I will deeply analyze the core underlying reasons for this high-level oscillation, covering six dimensions: macro liquidity, institutional capital battles, derivatives leverage, on-chain chips, market sentiment, and sector capital flow diversion, along with short-term observation logic.

1. Macro Level: Repeated Expectations of Federal Reserve Policy, Bulls and Bears Pulling in Opposite Directions (Root of Volatility)

1. Expectation of rate cuts cools significantly, but the possibility of easing is not completely closed
Previously, the market priced in multiple rate cuts by 2026, supporting BTC to surge above 78k; however, in May-June, US inflation and non-farm payroll data exceeded expectations across the board, and the new Fed Chair signaled a hawkish stance, leading the market to revise expectations: the probability of rate cuts this year plummeted, and there is even a possibility of rate hikes by year-end.
In a high-interest-rate environment, the US dollar and US Treasury yields continue to rise. With decreasing appeal of interest-free crypto assets, institutions reduce long-term holdings for risk aversion, creating ongoing upward pressure.
But inflation data shows divergence: CPI remains moderate, PPI rises, data fluctuates between good and bad, so funds dare not fully turn bearish. After each negative data release, market participants bet on subsequent easing expectations, and after declines, bottom-fishing funds enter to support prices, forming a “support during drops, pressure during rises” oscillation pattern.

2. Geopolitical risks cause disturbances, risk-averse logic switches repeatedly
Uncertainty persists in Middle East tensions; during periods of geopolitical tension, funds temporarily buy BTC as a hedge, causing quick price surges; when tensions ease, risk-averse funds quickly cash out and sell off, further intensifying range-bound fluctuations.

3. BTC linked to US tech stocks, synchronized yet diverging trends
Currently, Bitcoin’s correlation with Nasdaq is as high as 0.68, and its safe-haven attribute with gold continues to weaken. The US stock AI sector remains strong, with funds flowing into US tech stocks, diverting incremental capital from crypto; however, if US stocks pull back, crypto also faces pressure, and the two assets drag each other down, making it difficult to form an independent trending market.

2. Institutional Capital Structural Divergence, Continuous Hedging of Bulls and Bears (Direct Oscillation Driver)

Spot ETF funds show unprecedented split movements: large redemptions on one side, contrarian increases on the other, forming a natural opposing force:

1. Bearish forces: Mainstream ETFs continue large net outflows
Over the past two weeks, Grayscale GBTC and Fidelity FBTC have experienced consecutive large daily redemptions. Institutions took profits at high levels, and giants like Goldman Sachs and Harvard significantly reduced ETH ETF holdings, with Ethereum facing heavier selling pressure than Bitcoin; Strategy’s first small-scale Bitcoin sell-off in four years broke market confidence—every rally was met with institutional profit-taking and selling, capping upside potential.

2. Bullish support: Leading ETFs continue net inflows against the trend
Core products like BlackRock’s IBIT maintain steady buying, with long-term strategic funds accumulating on dips; combined with whale and staking fund lock-ups, exchange-held ETH reserves have fallen to an eight-year low, with limited spot sell-off capacity. After sharp declines, underlying buy orders support prices, making deep breakdowns unlikely.

In simple terms: short-term trading institutions sell high, long-term allocation funds buy low, and the two forces continuously battle, causing prices to hover within a range.

3. Derivatives leverage amplifies both longs and shorts, intensifying intraday whipsaws

1. Large bid-ask orders accumulate at high levels
During previous surges, retail traders chased longs; during declines, they bought dips to short, resulting in highly balanced open interest. Small upward moves trigger short stops, pushing prices higher; small drops trigger leveraged longs to liquidate, causing rapid drops, with intraday whipsaws becoming routine.

2. Frequent double-sided liquidations across the network, no trend-following funds
In recent days, 24-hour double-sided liquidations have become normal, with longs and shorts alternately losing money. Leveraged funds dare not hold directional positions long-term, only engaging in short-term swings, further enlarging range-bound volatility, making sustained trend formation difficult.

4. Fundamental divergence between BTC and ETH weakens overall rebound strength

1. Bitcoin: Halving cycle provides support, but lacks new catalysts
The long-term logic of supply contraction post-2024 halving remains valid, with stable long-term holders locking in positions, capping downside; however, there are no new incremental positives (such as ETF inflows or large corporate purchases), lacking sustained upward momentum, resulting in weak rallies.

2. Ethereum: More negative narratives, weaker elasticity than BTC
Ethereum spot ETF has experienced continuous outflows for days, on-chain activity and Gas consumption keep weakening, Layer 2 solutions divert native demand; institutions prefer ETH as a short-term trading asset, with strong selling after rebounds. Each rally quickly retraces, dragging down the overall rebound height.

5. Market sentiment polarizes, cautious funds dominate

The Fear & Greed Index remains in the fear zone for a long time, with retail traders exhibiting two extreme attitudes:
- Those trapped at high levels: reduce positions on rebounds, sell during rallies to cut losses, suppress gains;
- Holders on the sidelines: avoid chasing highs, only buy small positions after sharp declines, providing support.
Off-market incremental funds remain on the sidelines; no new capital enters, only internal trading among existing funds. The supply-demand game will inevitably lead to range-bound oscillation, difficult to break into a trend.

6. Capital diversion across the crypto sector, lack of new liquidity

This year, global capital focus has been on AI stocks, tech IPOs, US bonds, and fixed income products. Risk capital prioritizes high-certainty AI sectors, continuously withdrawing from crypto markets.
Incremental funds flowing into BTC and ETH have shrunk significantly; the market is left with internal trading, lacking external liquidity to drive trending moves, only maintaining high-level oscillations within a range.

Summary + Short-term Practical Trading Ideas (Final Tips)

1. Core logic of oscillation summarized in one sentence
Macro liquidity expectations fluctuate, institutional long-short hedging, on-chain supply game, and derivatives double liquidation coexist, with no dominant force guiding the market, causing BTC and ETH to oscillate within a high range.

2. Two key catalysts to break the oscillation

- Bullish catalysts: Clear rate cut signals from the Fed, US crypto regulation laws implemented, spot ETF resumes large inflows;
- Bearish catalysts: Hawkish rate hike signals from the Fed, sustained large redemptions of ETFs, key support levels broken with high volume.

3. Trading tips for current oscillating market
Avoid chasing highs or panic selling during range-bound oscillations. Do not chase upward moves or buy aggressively on dips; strictly control leverage. Before a clear trend emerges, avoid heavy long-term bets; focus on short-term swings. Wait for macro and capital signals to align into a clear directional cue before switching to $BTC trend trading.