The overnight pancake continued to be organized above 42k, and the market was about to move. I saw a graph on glassnode that counts the sales and purchases in the three major regions of Europe, the United States, and Asia, and I couldn't help but recall the controversial article "There is no second half at the end of the year" on October 15, 2021 .
The writing time of Biwen was just after the "924 article" was issued and leading exchanges announced to "remove" domestic users before the end of 2021, and before the Federal Reserve's monetary policy shift in early November 2021 announced the start of taper that month.
The central idea of the article, in a word, is to infer the situation of the long-short game based on the fact of "clearing and retreating", pointing out that it is impossible for the main force to reach the top at the end of the year, and let the leeks "victoriously escape" before the "clearing and retreating" at the end of the year "(escape top).
This is entirely a reasoning based on game theory, or the internal factors of the market.
I did not speculate on possible changes in the Fed's monetary policy, nor did I base my reasoning on such ethereal guesses (or forecasts).
In my view, the Fed's monetary policy is at best an external cause. The theory of contradiction has already told us that internal causes determine external causes, not the other way around.
Looking back on this round of bull market, a generally accepted narrative is that the main reason for the two major market retracements, the first is the market panic caused by the crackdown on mining in May 2021, mainly because Chinese leeks and miners are fleeing the market , The second time is from the beginning of November 2021 to the present. The Fed's monetary policy has changed, and a series of actions such as the landing of taper, the acceleration of taper, and the advance of interest rate hikes have led to the retreat of European and American capital.
In other words, the collapse in mid-2021 was caused by the collapse in Asia, which was attributed to the crackdown on mining, and the collapse at the end of 2021 was caused by the collapse in Europe and the United States, which was attributed to the Federal Reserve taper.
Yet what the data tell us is the exact opposite of this dominant narrative.
The picture below is the statistical chart line of the transaction data of the three major regions of Asia, Europe and the United States. Among them, the red shade is the transaction data in Asia, above the central axis is the buying order, and below the central axis is the selling order. The purple curve is the European region. The blue curve is North America.
(Figure: Asia, Europe, and the United States three major regional transaction data)
The dark blue dotted line box is the period from peaking to falling in November 2021 until bottoming out at the end of January.
It can be clearly seen that after wyckoff's first LPS back step in September, the buying in the three areas superimposed, resulting in a small top before November.
However, it is clear that during the wyckoff rebound from the end of July to the beginning of September, the buying power in North America was stronger than that in October. The former was more like the work of institutions and main players, while the latter was like retail investors whose emotions were mobilized.
As a result, before the peak in early November, although the buying in Asia, Europe and the United States overlapped, it was still Asia (that is us) that bought more fiercely.
Cooperating with the FOMO stand guard at the beginning of November, it was just before the Fed announced the taper, and the SEC took the lead in releasing the good news that the big pie futures ETF was approved for listing.
When this stacked buying force exhausted simultaneously in early November, the market topped out. In conjunction with the SEC's good news, the superimposed Fed suddenly announced an immediate taper, and the market began to leak.
But the differences in the behavior of Asia, Europe and the United States show what is the force leading the collapse.
The differences mainly occurred around the end of 2021, that is, from around December 2021 to early January 2022.
We can clearly see from the data that as the price retreats, North American buying has strengthened again. This shows that they do not particularly care about the Fed's taper or even interest rate hike expectations.
At the same time, a super selling frenzy from Asia began, and until the end of 2021, the selling reached its climax.
In my impression, at that time, in order to expel leeks, a large firm even directly announced that it would regularly charge account custody fees for stranded leeks!
It should be said that this time we cut a handful of old and beautiful leeks, because they were sold on the mountainside in Asia, and after we sold them out here, North America reacted and started to sell them, and reached the peak of cutting meat at the end of January, precisely cutting on the mountainside. Lowest point in the past.
I guess it’s Lao Mei’s leeks—especially the leeks that entered the market at a high level after wyckoff LPS—was really frightened when they saw this sell-off posture? Because judging from this selling volume, it is clear that institutions that entered the market at a lower level before September did not panic sell.
The blue box ends here.
However, this successive sell-off has brought about a reflexive effect, which has led to the second wave of selling in Asia since February. Of course, in terms of volume, this time the chips that can be cut in the hands of leeks are greatly reduced.
As for Europe and the United States, they have already come out of panic and turned into buying again.
As for the "519" crash in mid-2021, in fact, it is also very clear when looking at the pictures. At the beginning, our miners didn’t sell coins no matter how painful they were. Instead, North America sold them in May and June, especially the small climax before May, which became an important force that crushed the top of the first wave.
Looking back at the article at that time, "V God Holds the Sword and Cuts the Dog" (2021/5/13), Vitalik is selling coins and smashing the market, instructing the Ethereum Foundation to ship at a high level, "Musk" (2021/5/14) , Musk sold coins in the name of environmental protection and smashed the market. His demonstration effect has triggered more and more European and American institutions to follow suit. In my impression, some hedge funds complacently disclosed afterwards that before the start of the bull market, they shipped 60,000 dollars. Earn hundreds of millions of dollars a month and be happy.
On the contrary, around July, after the last hope of our lovely miners was completely shattered across the board, the selling in the Asian region increased (Europe also followed suit). See what North America is doing at this time? It has already turned backhand into a buying order, and took away all the coins we had at the lowest price!
The past will not be described in detail.
Why look at the data again and look for attribution? Because this will bring different inferences about the market outlook:
If you agree with the mainstream view that the collapse at the end of the year was caused by the Fed's taper and interest rate hike expectations, then the Fed will increase interest rates in the future market, and even ask QT to shrink its balance sheet. Will the market outlook be better? It probably won't get any better.
And if the collapse at the end of the year was caused by the liquidation of Asian leeks, then after the Asian leeks have been liquidated and the floor price has been cut, and the main force has cleaned the house, will it be time to open the door again? Will the market outlook be fine? Then it will probably be fine.
Don't be superstitious about mainstream narratives, don't trust other people's analysis, think independently, and see the truth.
(Public account: Liu Jiaolian. Knowledge Planet: Reply to "Planet" from the public account)
(Disclaimer: The content of this article does not constitute any investment advice. Cryptocurrency is a very high-risk product, and there is a risk of zeroing at any time. Please participate carefully and be responsible for yourself.)
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