Bitcoin Rebound Market Liquidity Contraction Multiple Indicators Suggest Bear Market Not Over

Market Observation and Analysis

Macroeconomic Environment and Liquidity

Recently, new variables have emerged in the global economic situation. The repeated changes in U.S. tariff policies have not only brought uncertainty to the market but have also weakened investors' confidence in the U.S. economy. This impact may persist in the coming months, disrupting market trends. Meanwhile, U.S. Treasury bonds and the dollar are showing a downward trend, while the U.S. stock market has experienced severe fluctuations, even witnessing a historic surge, a phenomenon typically occurring in the mid-term of a bear market. The cryptocurrency market has also undergone significant turbulence.

Overall Market Performance

This week, Bitcoin experienced a sharp rebound after a significant drop, but small cryptocurrencies generally face delisting risks, leading to a substantial decline in prices. The market overall lacks clear hot spots.

The tokens with the largest increases include XCN (up 110%), FARTCOIN (up 100%), GAS (up 60%), LAYER (up 40%), and UXLINK (up 30%).

The tokens with the largest decline are BERA (down 40%), EOS (down 20%), MEW (down 20%), W (down 20%), and NEAR (down 20%).

It is worth noting that BERA, as a DeFi public chain project, has broken below its long-term support level, with its stablecoins in the ecosystem decreasing by 300 million USD in the past week. FARTCOIN, as a meme coin project on the Solana chain, has risen against the trend in the overall market downturn. BABY is the leading staking project in the Bitcoin ecosystem, with its market value returning to 800 million USD after listing, but the feasibility of the re-staking model is under scrutiny.

On-chain Data Analysis

The inflow of funds into the Bitcoin market has stagnated. Market liquidity has rapidly contracted, causing the total market capitalization of altcoins to shrink significantly from $1 trillion at the beginning of this year to $600 billion. This decline has had widespread effects, nearly affecting all sectors.

Institutional funds have seen a slight net outflow, and global market sentiment is trending towards panic. The market capitalization of stablecoins has also experienced a slight decline, reflecting investors' risk-averse sentiment.

The long-term trend indicator MVRV-Z Score is currently at 1.6, approaching the bottom range, indicating that the overall market is in a loss state. When this indicator is greater than 6, it is usually considered the market top; when less than 2, it is seen as the market bottom.

Futures Market Situation

The funding rate for futures has remained at a relatively low level of around 0.00% this week. Generally speaking, a rate of 0.05-0.1% indicates a high long leverage, which may represent a short-term top; a rate of -0.1% to 0% indicates a high short leverage, which may represent a short-term bottom.

The open interest in Bitcoin futures continues to decline, indicating that major market funds are withdrawing. The long-short ratio for futures is at 1.9, reflecting a market sentiment leaning towards greed. Typically, a long-short ratio below 0.7 indicates market fear, while above 2.0 indicates market greed. However, due to the significant volatility of this data, its reference value has diminished.

Spot Market Analysis

This week, Bitcoin's price has experienced significant fluctuations, while other cryptocurrencies lack new investment logic support. The uncertainty of U.S. tariff policies has intensified pressure on global financial markets, and this impact has spread to almost all asset classes. In this broader environment, the cryptocurrency market struggles to stand out and continues to fall into a bear market predicament.