January 21 Morning

Bitcoin begins a breakdown and downward trend, with the price continuously under pressure from around 93,000, reaching a key low of 87,900 with a significant decline. The previously accumulated bullish buying power at high levels has completely weakened, with consecutive bearish candles breaking through multiple key support levels, clearly signaling capital fleeing. The current slight rebound is merely a technical correction within the downtrend and not a trend reversal. Market bearish sentiment continues to dominate, and the short-term rebound window presents a good opportunity to gradually establish short positions. Traders can take small positions to capture short-term rebound profits. The core strategy remains to short on rallies.

This round of decline is not a random correction but a trend reversal after bullish momentum exhausted: after the dense bullish positions around 93,000 were broken, long positions in the market exited en masse, further accelerating the decline; on the capital level, there is a clear sign of capital fleeing, with net capital inflow shrinking significantly, and selling willingness far exceeding buying capacity. Bearish sentiment further intensified after the breakdown, becoming the dominant market mood in the short term.

The 4-hour Bollinger Bands continue to expand downward. After the price broke below the lower band, it briefly found support and rebounded, but the upper and middle bands of Bollinger Bands moved down rapidly in sync, creating strong resistance. This clearly indicates that the current trend is dominated by bears, and the space for a rebound is continuously shrinking.

Volume characteristics: During the decline, trading volume increased in tandem, especially when the price broke below the 90,000 level, with a noticeable surge in volume, reflecting heavy selling pressure and strong willingness to realize profits. If subsequent rebounds see continued volume contraction, a secondary decline is highly likely, and the validity of support levels below will be further tested.

Trading Suggestions

Short: When Bitcoin rebounds to around 89,300-89,800, gradually establish short positions, targeting 86,000-87,000. If broken, further downside targets include 85,000 support levels.
Short-term long: Participate lightly in oversold rebounds, with entry points around 87,500-88,000, targeting the 89,000 level. Exit immediately upon encountering resistance, avoid holding on to losing positions, and prevent falling into bullish traps. $BTC