I think this is simply trying to provide excuses for current price action. Although I hate to admit it, BTC has been highly correlated to stocks "risk assets" with have fallen dramatically this year.

Maybe I'm not looking in the right places, but I'm also not seeing much high long leverage right now, but more of a balance:

Longs vs Shorts:. https://www.coinglass.com/LongShortRatio
Liquidiation Data:. https://www.coinglass.com/LiquidationData
Futures: https://www.theblockcrypto.com/data/crypto-markets/futures

If anything, it seems that there is relatively low leverage right now, with futures volume currently at summer 2021 levels for example (<$2b as opposed to >$4b 6 months ago). Many positions already got liquidated earlier in the month, predominantly longs after breaking $30K but many shorts as well after the bounce from $25K level. Most won't want to short in oversold conditions, others don't want to long without confirmation of a low.

As for ETH locked in 2.0, I find it highly irrelevant, many of those longer term investors will eye up the opportunity to rotate back into Bitcoin I imagine, anticipating BTC to recover much faster than any altcoins (which has always been the case so far). While MtGox coins that may be released later this year, or in 2024, sure it could spook some investors, but this has been the case for over a year already. Yawn.


I agree that $28K is looking exhausted, even if bears are losing momentum after 9 weeks of selling. So re-testing $26K does "look" relatively likely at this point. But this can go either way based on current leverage data. Dropping below $28K would liquidate longs and likely re-test mid $20Ks, but moving above $30K-32K would otherwise liquidate shorts, pushing prices back into the mid $30Ks. Even if we are admittedly closer to breaking down than bouncing back to the upside. But I do agree it'd be healthy to build support at such oversold levels if that happens, better to drop asap than later with price no longer oversold.

It's the sort of "coin flip" scenario that unless you are trying to trade a risky break-out in either direction, then you'd likely be better off in both short & long positions with high leverage and simply trade the volatility instead. Given how degenerate the strategy of being both long and short with high enough leverage to make it worthwhile is, I'm not surprised there's low leverage in the market right now, due to lack of oppounrtity.

The on-chain data also suggests that 6-12 month holders who dumped 50% of their bags over the past 6 months are close to running out of Bitcoin to sell. Meanwhile, the 1 year+ holders (in particular 1-2 year holders) seem completely unphased by the drop from $69K. Notably the 6-12 months holders have now either dumped or become 1+ year holders since 6 months ago, even after buying in the mid $30K range. Hence why if not obvious the 6-12 month hodlers have dropped from 20% to 10%, while the 1 year hodlers have risen from 10% to 20%. Half of them dumped, the other half held basically, price dropped in half.

For reference sake, the volume data shows that 1-2 year hodlers predominantly bought at $10K as opposed to $30K or $60K (May 2020 - May 2021). So price will probably need to drop below $20K to shake these strong hands out the market. Returning to $25K or the 200 Week MA likely won't achieve much. After all, most bought BTC post-havling in the $10K-12K range, I imagine for the long-term as well.

https://www.lookintobitcoin.com/charts/hodl-waves/
https://www.lookintobitcoin.com/charts/1-year-hodl-wave/