Market Divergence Intensifies: Does the Rebound Turn into a Reversal or a Downward Correction?

The market divergence has further intensified as the open interest of Bitcoin rises and the key levels of the liquidation map continue to increase. There are two main points of view:

1. The rebound is likely to turn into a reversal.
2. The current rebound is the second distribution of the downward correction.

Both viewpoints are based on supply and demand analysis, but they draw different conclusions.

! Recap of the heightened market divergence: The rally turns into a reversal, or the second distribution of the bearish relay

The view that the rebound has turned into a reversal

The analysis supporting this view mainly includes:

1. The changes in profit and loss status of long-term holders (LTH) and short-term holders (STH).

• The LTH-RPC indicator shows widespread losses among long-term holders, often signaling that the market is nearing the bottom
• The STH-RPC indicator shows that the profit and loss ratio of short-term holders has improved, which is a signal of market warming.

2. The BTC-SSR indicator reflects the enhanced ability of Bitcoin to attract stablecoin liquidity.

3. The formation of dual anchor effects in high and low chip dense areas establishes price support.

4. The market impact momentum of single events such as tariff policies is diminishing.

! Review of the heightened market divergence: The rally turns into a reversal, or the second distribution of the bearish relay

The view of the second distribution of the downside relay

The viewpoint suggests that:

• U.S. stocks have entered a technical bear market, in line with Wyckoff's distribution theory
• Bitcoin is difficult to be independent of the US stock market trends.
• Tariffs trigger higher inflation, which could accelerate a recession

Market divergence is intensifying, with differing views on the prospects of US stocks and the independence of Bitcoin. Investors need to make judgments based on their own analysis.

! Review of the heightened market divergence: The rally turns into a reversal, or the second distribution of the falling relay