Panic at 25, but the price doesn't crash: this is not the bottom, but the "silent market maker transition period".

On December 22, the panic index is stuck at 25 again. Bitcoin didn't have a waterfall, altcoins didn't crash, and even the liquidation volume of contracts reached a new low.

This is not that the market has become stronger, but rather that retail investors have lost the strength to panic.

1. First, let's break down this "25 points": it's not an emotional breakdown, it's a "trading freeze".

The panic index is weighted by 6 dimensions:

• Volatility 25%

• Trading Volume 25%

• Social Heat 15%

• Market sentiment survey 15%

• BTC market share 10%

• Google Search Trends 10%

The current core contradiction is: all "action layer" indicators are shrinking, only the "emotion layer" continues to be priced.

Data shows that in Q4 2024, the trading volume of perpetual contracts on centralized exchanges surged by 79.6% month-on-month, but after entering Q1 2025, the daily trading volume of Bitcoin fell more than 40% from its peak. More critically, since March 2025, approximately 3,600 BTC has been net flowing out of exchanges daily, while social heat has decreased by over 70% compared to the peak in December 2024.

This is not a panic sell-off; it is a systemic freeze of participation willingness.

2. Why is it said that "not crashing is more dangerous than crashing"?

The traditional market bottom is accompanied by:

• Volume surge and plummet → Bearish release

• Leverage clearance → Risk clearance

• Panic index single digits → Extreme emotions

But what do we see now?

1. The price is consolidating, but the chips are being transferred.

On December 17, 2024, Bitcoin pulled back by 20% after reaching a historical high of $106,128. However, on-chain data shows that after long-term holders (LTH) sold over 1 million BTC during the same period, whale holdings quickly rebounded after Trump's inauguration in January 2025, with the monthly accumulation growth rate soaring from -0.25% to +2%.

2. The exchange reserves plummeted, but the market share is abnormal.

From November 2024 to May 2025, the exchange's BTC reserves decreased by 668,000 coins, a decline of 21%. However, BTC's market share dropped from 43% to 34%, indicating that the outflowing bitcoins did not fully return to the spot market but instead entered over-the-counter custody or derivatives collateral.

3. Historical volatility is at a low, but structural liquidations continue.

The volatility component in the fear index has fallen below the 30-day average, but small-cap cryptocurrency contracts have been unilaterally liquidated for over $1.5 billion in the past 30 days. This indicates that the market is not without volatility; rather, the volatility has been precisely "targeted and detonated."

The truth behind "not crashing" is: the main force doesn't need to dump the market because retail investors are already out of the market.

Three, why does panic "stick" in the 20-30 range? Three major shackles.

Lock One: Macroeconomic Expectations Fall into "Policy Observation Period"

In December 2024, the Federal Reserve delayed expectations for interest rate cuts, while the shadow of interest rate hikes in Japan continues. IMF data shows that the market value of crypto assets as a percentage of the U.S. Treasury market will drop from 13% to 10% in Q1 2025. Institutional funds are waiting for a clear regulatory framework—details of the Trump administration's crypto policy have yet to be implemented, and the giants are hesitant to act, causing the market to lose its biggest marginal buyers.

Lock II: Market mechanism enters "inefficient equilibrium"

In December 2024, the monthly trading volume of centralized exchanges (CEX) for spot + derivatives reached a peak of $11.3 trillion. However, Q1 2025 data shows that despite a daily net outflow of 3,600 BTC, exchanges still hold 2.43 million BTC (worth over $250 billion) in cold wallets. It's not that the funds don't want to move, but rather that there is a lack of a "certain narrative that can carry large funds."

Lock Three: Retail Investors Trained to be "Startled Birds"

The "N-th Bull and Bear" of 2024 has educated everyone: chasing the rise = getting stuck, bottom fishing = catching a knife. When trading becomes a game of "high probability loss," the optimal strategy is "not to trade." This is why the fear index is rising but social activity remains cold—everyone has lost the courage to even discuss.

Four, the three iron rules of the chip silent period

Rule 1: This is not a bottom-fishing signal, it's "time for space".

Historically, when the panic index remains in the 20-30 range for more than 30 days, it takes an average of another 45-60 days for a trending market to emerge. The current state only indicates that the decline is being priced in by emotions, but an increase requires a new consensus of funds.

Iron Law 2: The real starting point is "no one wants to watch the market."

In May 2025, the number of active Bitcoin network addresses decreased by 35% compared to the peak in December 2024, and the Coinbase premium index continues to be negative. When social heat drops to freezing point and the Google search index falls below an average of 30%, any marginal buying will trigger an exponential price reaction. It is not time yet.

Rule 3: Leverage is the enemy of all profits.

In a low volatility, low liquidity environment, the funding rate of contracts becomes the main source of cost. Over the past 90 days, the annualized funding cost for long positions in perpetual contracts has reached 18-22%, while the price volatility is only 12%. This is not about amplifying profits; it is a certain loss.

Five, what should you do now?

1. Stop using the "fear index" for left-side trading

It can only tell you "it's not dangerous now," but it can't tell you "there's an opportunity now." The current environment is more suitable for dollar-cost averaging or staying in cash, rather than going all in.

2. Focus on the "action layer" rather than the "emotion layer"

Pay close attention to three indicators: whether the exchange reserves have stopped declining, whether whale net inflows continue to turn positive, and whether the market capitalization of stablecoins (USDT/USDC) exceeds $250 billion. Only when all three conditions are met is it a signal for the main forces to "officially announce."

3. Reduce your altcoin positions to a level where you "won't feel hurt even if you forget them".

Before the BTC market share rises above 40%, 90% of altcoins will underperform Bitcoin. During the liquidity drought period, market capitalization is the lifeline.

Final words

The panic index is 25; it's not that the market is crying, it's that the market is holding its breath.

It tells you: the chips are being taken away, but the new story has not yet been allowed to be told. Real change never happens on the most panicked day, but on the day when everyone is too lazy to panic, even too lazy to watch the market.

When there is no one in the circle discussing Bitcoin, when only robots are left in the group chat, when the K-line of the exchange turns into a straight line...

That is the time when one should really open their eyes.

💬 What do you think?

• How long do you think this "quiet period" will last?

• Which signal are you waiting for to re-enter the market?

Like 👍 Share it with friends who are still holding on, follow me, and let's wait for the wind together. See you in the comments.

#加密市场小幅回暖 $BTC ‌