ETF single-day net purchases exceeded 200 million dollars, but encryption is sideways? This might be the time for arbitrage in a range-bound market.

Institutional funds are flooding in, and BTC/ETH is moving sideways like a mountain. Is it market maker accumulation? Or is the fully priced-in good news? The Chaos Index has already provided the answer: this is not a trend, it's a fluctuation. So how should we take action?

Favourable Information is frequent, yet the market is "steady as an old dog"?

Let's first take a look at today's hot news:

BTC ETF net inflow of 2761 BTC in a single day

ETH ETF net inflow of 2413 ETH

market maker transaction volume exceeded 200 million USD

Semler Scientific plans to hold over 100,000 BTC

No matter how you look at it, the market is "blowing warm winds": whether it's ETF funds entering the market or listed companies allocating BTC, the overall logic points to one keyword - bullish expectations.

But the price feedback to you is this: BTC is still fluctuating around $104,600, ETH: Sideways around $2,520, the Chaos Index remains above 60, and the high-level fluctuation range is clear.

Friends who are familiar with our previous article will know that a rising chaos index indicates that the market is operating in a sideways range. In other words: favourable information does not equal a surge; the current market is still "gathering strength and consolidating." This means that the market is not unwilling to rise, but rather "everyone is waiting": waiting for the Federal Reserve to make a move? Waiting for data confirmation? Waiting for Bitcoin ETF to show explosive growth?

But waiting is waiting; the necessary short-term rhythm is still there — this is also the key point we want to discuss today.

If you don't understand the Chaos Index, you can take a look at this article: "Interest Rates Not Lowering, Will Crypto Go Sideways? The Chaos Index Teaches You to See Through the Logic Behind 'Sideways'"

The seemingly "boring" consolidation period is actually the exclusive battlefield of "smart money".

The characteristics of a consolidation period are: unclear direction but low volatility. Don't be fooled by the visual effect of "sideways movement"; in fact, the small fluctuations during the session are still sufficient for "arbitrage". Let's analyze the recent 1-hour candlestick chart status of BTC/ETH.

Price action characteristics:

Significantly crossed the middle track but quickly fell back, manifested as "rally and retreat" and "drop and rise" repeatedly.

Strictly limited to operate within the upper/lower band range.

Combining the analysis of market maker large orders, this actually indicates that institutions are not in a hurry to raise prices, but there are defenders at the bottom and pressure at the top, creating a "balanced" state in the tug-of-war between bulls and bears.

This stage is actually the best window period for neutral strategies to perform, such as mean-reversion strategies like "Bollinger Bands" and "Keltner Channels."

How to formulate a strategy? Use the chaos index to identify the phase and execute with a mean strategy.

Let's set up a simple strategy framework, with the logic as follows:

Screening phase: First use the Chaos Index to determine if the market is "sideways," and set a filtering threshold: only when the CI (Chaos Index) is above 55 will the strategy be activated to avoid being "slapped back and forth" during trend explosions.

Entry conditions: After entering the sideways phase, we stand ready at the "upper band" and "lower band" of the Bollinger Bands. If the price touches the upper band, consider shorting; if the price hits the lower band, consider going long.

Exit conditions: Close the position when the price returns to the middle track, capturing the "middle spread"; if the middle track is not touched, exit with a 2% profit; or if the price goes against you, stop loss at a 1.2% loss. Additionally, an "insurance line": once the chaos value falls below 55, it indicates a change in market structure, and regardless of profit or loss, exit immediately.

With this set of combined strategies, we don't seek huge profits, but we excel in clear logic and controllable risks, making it very suitable for "nibbling" in a sideways market. In plain terms: "When we see the market is 'sideways', we just wait at the edge of the range; if the price breaks through, we enter, and if it comes back, we exit."

To intuitively verify whether this strategy is "reliable", the editor also used AiCoin's custom indicator feature to directly display the trading signals on the K-line charts of BTC and ETH.

How did it turn out? To be honest, surprisingly "clean"!

When the chaos index is above 50 and the market is clearly in a sideways structure, the signals are indeed very accurate: go long when you should, and reverse when you should. What’s even better is that after entering a trend segment, the strategy automatically "quietly" stops, giving no signals at all.

This prompts us to envision a more complete model logic: if we can first use the chaos index to distinguish between the oscillating and trending segments, and then apply different trading strategies accordingly—wouldn't we be able to "cover every segment of the market" and calmly handle the uncertain market?

Of course, the oscillation strategy showcased today is just a relatively basic model. The editor has not run a complete backtest or made adjustments for live trading, so it is for reference only. If you are also interested, why not give it a try yourself—download AiCoin (

Summary

Don't be fooled by the "calm surface" of the market. True market trends are never driven by passion, but by structural building. Today, we used the Chaos Index + Mean Strategy to tackle the operations in the volatile segment, making sideways movement no longer a "gap period", but a "steady income period". Of course, the market will eventually start moving again. When the Chaos value falls from a high position and the market enters a trend phase again, we will need to switch to another set of strategies.

If there is an opportunity later, perhaps we can talk about—how to determine when a trend segment has arrived? What strategy should be used to capture the entire trend segment?