I want to start with a conclusion on this BTC cycle: I don’t think this is the bottom, nor do I think it’s a continuation of a trending move.

Many people get excited when they see this set of data:

Sharpe ratio rebounds after dropping below -20 → “historical bottom signal”
Top short positions keep increasing → “the trend will continue to fall”

But my understanding is the opposite

This isn’t a contradiction—it’s two expressions of emotion at the same stage

Bottom signal = “a post-hoc confirmation logic from history”
Short positions increasing = “real capital behavior in the current market”

In other words: one is saying “the past has already become cheap,” the other is betting “it will get even cheaper now”

And what’s truly dangerous is when both narratives start to hold true at the same time

I’ve taken two short positions in this cycle, but neither was a trend short—they were sentiment shorts

First time: sharp drop with high volume followed by a failed pullback → small position trial short, took profit after a leg down

Second time: chased a short after a panic candle → got stopped out by a pullback

After that I made a key adjustment: I stopped using “indicators to judge trends” and switched to watching “whether the market has entered an extreme sentiment zone”

Right now at this level, my state is

Don’t chase shorts (because short positions are already too crowded)
Don’t buy the dip (because there’s no structural reversal)
Wait for a breakout (let the market choose the direction for me)

To be honest, I used to rely heavily on on-chain data & and Sharpe ratio, but I later found a problem: they are better at explaining the market than guiding trading

For example:

Sharpe ratio → tells you “risk-reward has deteriorated to extremes”
On-chain data → tells you “how smart money is diverging”

But the problem is that the market doesn’t reverse immediately just because an indicator has hit a bottom—it only continues to torment you when most people start to believe in the bottom

So now I use them differently: not to open positions, but to determine whether market sentiment has already become extreme

The most deceptive phase of the market isn’t a sustained uptrend or downtrend—it’s when historical data tells you “it’s almost bottoming” while positions tell you “it hasn’t finished falling yet.”

And the real trading difficulty lies here: what you need to do is not pick a signal you believe in, but wait for the moment when “the signals start to align”

If they are still in a split phase, it means the direction hasn’t been written yet, and the market is still testing you
#比特币底部信号亮起，头部空头加仓 #btc $btc