Nearly half of all online investors are losing money. Why has this round of decline scared even smart money?

Summary

BTC broke through a key level, falling to a low of $74,000.

Although the trading volume has increased and it looks lively, many people are actually panic selling.

Currently, whether in spot or futures markets, market sentiment has fully shifted to "defensive mode".

One-Minute Highlights

• Bulls are completely demoralized:BTC fell below the November low and retreated to $74,000. The RSI indicator, which measures the strength of the upward trend, simply "flattened," indicating that the bulls have been stunned and it will be difficult to organize an effective counterattack in the short term.

• Not bottom fishing:The rising trading volume shows that this is more of a panic selling and forced liquidation, rather than major funds firmly accumulating at the bottom.

• Not bottom fishing:The rising trading volume shows that this is more of a panic selling and forced liquidation, rather than major funds firmly accumulating at the bottom.

• Institutions are still "running away": ETFs are still experiencing a massive outflow of $1.5 billion in a week. The selling pressure in the spot market continues to overwhelm buying, with no signs of large funds entering to support the market. Leveraged funds are turning against them: Those trading contracts are not only afraid to borrow money to bet on price increases, but a group of aggressive funds are actively shorting and dumping shares, exacerbating the decline.

• The entire network is trapped:Only 60% of the tokens in the market are profitable, and the overall account balance of the entire network is already in a state of huge losses. The mentality of token holders is undergoing an extreme test.

A complete "deflation"

As the price of BTC failed to hold the November low, the upward momentum of the market has completely collapsed. The most direct manifestation is the sharp drop in the RSI indicator.

RSI represents the market's frenzy, which means that the bullish power has been drained in the short term.

Although BTC spot trading volume appears to have increased, this is not due to enthusiastic bottom-fishing, but rather a false boom caused by panic selling and passive turnover during the price decline. Price Momentum (RSI): The 14-day RSI indicator plummeted from 40.7 to 15.5 (a drop of 61.8%). This is a benchmark for measuring the decline in price momentum. Just like a car running out of gas while climbing a hill, a value dropping to 15.5 indicates that the bulls' strength has been completely exhausted, and the market has entered an extremely oversold state. Unless the selling pressure is exhausted, it will be difficult to see a decent rebound. Price Momentum RSI (Rate Indicator)

• Spot Trading Volume: Trading volume increased from $9.28 billion to $12.28 billion. The figure is in the hundreds of millions of US dollars (up 33.4%). This represents market activity. In this market situation, increased volume and decreased price usually indicate "panic selling," meaning sellers are dumping shares at any cost to exit the market. This is generally not a good sign, indicating that while there is active trading, it's all at a loss, with sellers cutting their losses and leaving the market.

Who is frantically dumping shares?

The situation in the spot market remains very bad. The most crucial "Spot CVD" indicator (representing the actual number of real BTC traded during this period) hit a new low, directly confirming that the current decline is entirely driven by sellers. While the outflow of funds from ETFs has slowed slightly, the overall trend is still one of outflow, indicating that institutional funds have not stopped withdrawing. Even with increasing trading volume, this reflects more rotation among risky assets than a strong buy signal. Spot CVD (Net Buy-Sell Difference): This indicator further deteriorated from a negative $144 million to a negative $286 million. This indicator measures buying and selling activity; the larger the negative value, the stronger the selling pressure from sellers compared to the buying pressure from buyers, indicating that short sellers have absolute control.

• ETF Net Fund Flow: Weekly net outflow slightly adjusted from $1.57 billion to $15.015.0 This reflects the attitude of traditional institutional funds. Although the outflow was slightly less than last week, the continuous large-scale capital outflow indicates that large funds are still withdrawing to seek safe havens.

• ETF Holdings MVRV：  decreased from 1.59 to 1.33. This measures the average profit level of ETF investors. The decline in the value indicates that the profits of these "regular troops" are being rapidly eroded, and the pressure of holding positions is increasing.

• One ​​noteworthy point:

  Binance SAFU fund address quietly bought 1315 units worth $1.3 billion on February 2nd.

Binance SAFU fund address quietly bought 1315 units worth $1.3 billion on February 2nd.

• A noteworthy point:

  Binance SAFU fund address quietly bought 1315 units worth $1.3 billion on February 2nd.

Futures Open Interest



• Perpetual CVD: Expanded from negative $831 million to negative $9.83 This is the holding interest that the bulls paid to the bears to maintain their positions. The decrease in interest indicates a decline in bullish sentiment; people are no longer willing to pay a large sum to gamble on a price increase.



• Funding Rate: Long position cost reduced from $1.6 million to $1.2 million



Has the demand for hedging peaked?

The options market is undergoing a round of "de-risking".

The options market is undergoing a round of "de-risking". The open interest has fallen below the lower end of the normal range, indicating that many players have chosen to exit the market and observe. Although people are still buying "put options" as insurance (the Skew indicator is high), this panic has not worsened further. The narrowing volatility spread also suggests that the market does not expect a more extreme and chaotic crash in the future; rather, it anticipates a gradual decline. Options open interest decreased by 7.78% to $31.4 billion, indicating high participation from deep market players. The fact that many are closing their options positions suggests they no longer expect a significant rebound in the short term.

• 25-Delta Skew: slightly decreased from 11.21% 

The pain of losses is spreading

On-chain data shows that the BTC network is currently in a stress phase........ Although the price volatility has led to an increase in active addresses, net BTC inflows have stagnated, and are even flowing out. Most importantly, the vast majority of BTC across the network is currently at a loss. The percentage of profitable BTC has dropped from 66.1% to 61.4%. This means that approximately 5% of BTC has shifted from being profitable to losing money. Currently, only about 60% of cryptocurrencies are profitable, while the remaining 40% are in a state of unrealized loss. Holders' psychological defenses are being breached.

• Unrealized Profit/Loss (NUPL): The indicator dropped from -9.4% to -13.9%

• Realized Market Value Change: From -0.2% to -0.3%. This measures net capital inflow. A negative value indicates that there is more old money leaving the market and less new money entering, resulting in a shrinking market liquidity.

• Active Address Count: Although it bucked the trend and increased by 6.1% to 661,000

• Active Address Count: Although it bucked the trend and increased by 6.1% to 661,000

Summary

The current market situation is very clear:Comprehensive hedging. Whether it's spot, futures, or ETFs, data is contracting across the board. After Bitcoin fell to $74,000, a large amount of capital is now at a loss, and market confidence is extremely fragile. Although the options market suggests that panic hasn't amplified indefinitely, unless hard indicators like spot CVD recover, a short-term market reversal requires either the complete exhaustion of selling pressure or the entry of large new funds to absorb the losses. Currently, a defensive stance is recommended, awaiting a bottoming signal.