A report of a Bitcoin ETF wipeout is dramatic, yet the actual threat is not a big trap - it is overcrowding and liquidity disparities. The market delevering rapidly also subjects even spot holders to spread punishment and slippage and forced selling at other markets (perps, basis trades, risk-parity reallocations). That is the way drawdowns are like liquidations in even non-margin ETFs.
To have a practical model, stop worrying about wave labels. To emphasize where forced flows would be required to appear: in the long-term holders do not establish bottoms; marginal sellers.
My opinion in a sentence: The flow + liquidity is the next big action, rather than a Fibonacci level or an account of how whales were hunting ceased.
What known vs what interpretation: it is rational to plot the possible downside magnets such as the 200 week moving average and large retracement areas, and to anticipate reflex rallies within a larger downwards trend. However the precise direction (58k - 85k - 40k - 200k) is a projection rather than a reality - and it presupposes smooth and well-organized markets when in reality these markets tend to operate through gaps and policy shocks.
The price to fill argument on the institutions must crash is also simplistic. The large players can build up over time through TWAP/VWAP, OTC desks, options structures and basis trades. Price may fall rudely still - but that does not need manipulation as the reason.
The tradeoff: one can miss the reversal by waiting to see an ideal situation where the market approaches 40k entry, and vice versa, one can sit through the entire chop or a more pronounced drawdown.
A better place to look would be spot ETF net flows vs price trend, perp funding + open interest (is leverage being rebuilt?), realized volatility regime changes, weekly closes relative to the 200W, and liquidity indicators such as order-book depth/coinbase premium. Provided those increase and price ceases to reach new lows, then the thesis of a final flush becomes weak.
