Recently, I came across an interesting on-chain monitoring alert and immediately pulled up the data dashboard for a detailed check. Today, I want to break down what this signal actually means behind the scenes.

**"Hard" capitulation, is this a sign of a rebound?

Monitoring records show that a major on-chain address liquidated $93.82 million worth of BTC long positions 18 minutes ago, with unrealized losses reaching $1.69 million. At first glance, focusing solely on this loss figure is indeed frightening, but the real point of interest lies elsewhere.

When the most stubborn longs in the market start reducing their positions, it often indicates that short-term sentiment has become extremely pessimistic. This large holder had previously endured several rounds of volatility without moving, but now chooses to realize losses and close positions. This doesn’t mean they suddenly turned bearish; rather, high-leverage positions can’t withstand this kind of sharp dip. Liquidation of large high-leverage positions usually signals that the market is shedding the last wave of forced sellers— in other words, when panic selling peaks, a rebound is often not far behind.

What’s more interesting is the remaining positions after liquidation: they continue to bet with 10x leverage on assets like PUMP and FARTCOIN. What does this imply? Their expectations for the altcoin season haven’t changed; they’ve just shifted their bets from more volatile assets like BTC to narratives with even stronger storytelling. This further confirms a key point: BTC is currently in a high-volatility consolidation phase, with market funds tentatively rotating into high-risk assets, but the overall bullish pattern remains intact.

**What do on-chain data say?

From a more macro perspective, several key indicators are worth noting. OTC pool data shows that funds are still flowing in net, indicating that institutional-level buy orders are quietly accumulating. This phenomenon usually appears during the most pessimistic market phases—big players taking advantage of the worst sentiment to bottom fish.

Altcoins’ volatility is indeed increasing. For example, leverage liquidations in memecoins like PUMP could trigger chain reactions of liquidations, but these are mainly localized risks, not systemic risks. Liquidations will amplify short-term volatility but won’t change the medium-term trend.

The market’s expectation of a shift in Federal Reserve liquidity policy remains unchanged. At the current pace, the market is likely to continue this oscillation pattern until February, through repeated margin calls that deplete overly leveraged positions. This is actually a self-healing process—each major liquidation filters out funds with unclear logic.

**Don’t be scared by the headlines

Headlines like "Whale Losses" tend to create panic, but history repeatedly shows that most reversals are preceded by positions being wiped out. When panic selling is at its worst, it’s often the bottom.

The logic of holding a core spot position remains unchanged: as long as prices drop to key support levels, keep adding. This isn’t stubbornness; it’s a judgment based on on-chain data and historical patterns. The market always rewards those who are not emotionally driven.