Market divergence intensifies: Does the rebound turn into a reversal or the second distribution of a downward correction?

The open interest in Bitcoin has risen, and key price points on the liquidation map have been intensified, further exacerbating market divergence. Currently, there are two mainstream views: a rebound turning into a reversal, or a second distribution of the downward correction.

Both viewpoints are based on supply and demand analysis, but they draw different conclusions. Candlestick charts are a visualization of the supply and demand relationship, with each candlestick reflecting the outcome of the battle between buyers and sellers. Price fluctuations, pullbacks, and failed breakouts all stem from changes in the supply and demand structure.

The marble theory visualizes the relationship between supply and demand: different thicknesses of "glass" on the order book represent liquidity depth, while active transaction orders are the "marbles" with momentum. Price changes are the process of marbles breaking through the glass. This explains the unpredictability of short-term prices and emphasizes analyzing the physical processes that drive prices rather than predicting candlestick patterns.

Based on the marble theory, the following hypothesis can be derived:

• Market prices show a fluctuating trend.
• The density of pending orders at different price levels varies, forming support and resistance.
• The larger the active trading, the stronger the momentum.
• Some limit orders are false liquidity
• Price action has inertia and may show overbought or oversold conditions.

The first viewpoint: the Rebound is likely to turn into a reversal.

This view is based on three types of demand being greater than supply:

1. Long-term holders (LTH) and short-term holders (STH) relationship

• The LTH-RPC indicator often approaches market lows when long-term holders are generally at a loss.
• The current LTH loss ratio has risen to 1.9%, nearing the threshold range for layout opportunities.

2. STH-RPC Indicator

• Short-term holders have shifted from losses to profits, indicating a recovery in market confidence.
• The current curve is converging, still belonging to the left-side entry strategy.

3. The supply and demand relationship between stablecoins and Bitcoin ( BTC-SSR )

• The BTC-SSR trend shows the accumulation of momentum flowing from stablecoins to Bitcoin.
• The current market capitalization of stablecoins is accelerating, which may drive the market capitalization of Bitcoin.

4. High and Low Chip Concentration Zone Double Anchor Effect

• The $60,000-$70,000 and $93,000-$100,000 ranges each accumulate about 11% of the chips.
• Forming a symmetrical structure may limit the price to the range of $70,000-$93,000.

The impact of tariff policies is gradually diminishing, and market sentiment is easing. Short-term holders are gradually making profits, while long-term holders' selling pressure has yet to arrive, with a large amount of stablecoins possibly flowing into Bitcoin. These factors support the current Rebound potentially strengthening into a reversal.

The second viewpoint: the current rebound is the second distribution after accumulation.

This view suggests that the US stock market has entered a technical bear market, making it difficult for Bitcoin to stand out on its own. The recent trend of the US stock market aligns with the characteristics of the Wyckoff distribution phase:

• November 6: PSY Initial Supply Point
• November-December: BC buying climax
• December 18: AR naturally falls back
• December 20: ST secondary test
• End of December - Early January: SOW weak signal
• January 13-23: UT surge and pullback
• February 19: UTAD Rebound and Fall
• February 19 - early March: Accelerated escape
• March 25: LPSY final supply point

The trend of the US stock market aligns with the Wyckoff distribution theory, indicating that the final sprint at the end of the bull market and the distribution have been completed. Before finding the last support point LPS(, the market may still be a bull trap.

The divergence between the two viewpoints mainly lies in the judgment of expectations for the US stock market and the possibility of decoupling from Bitcoin. As market discrepancies intensify, investors need to weigh their options carefully.

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