Trump stated on social media platform X: 'Tech stocks, industrial stocks, and the Nasdaq index have all set historical highs! Cryptocurrencies have also broken through the sky. Since self-imposing tariffs, Nvidia's stock price has risen by 47%, America is back! A great victory!' At the same time, he urged the Federal Reserve to cut interest rates as soon as possible to match the strong economy, saying, 'America should always be at the top, and—no inflation!'

Behind this statement, the crypto market is burning with crazy passion. The global trading room is brightly lit at 3 AM, but the candlestick chart next to the coffee cup is already glaringly red.

Bitcoin Continues to Rewrite History: A Sudden Surge to $117,000

On the morning of July 10, Bitcoin's price strongly broke through the previous high of $112,000, and just a few hours later it surpassed the $117,000 mark, with a price increase of over 5% within 24 hours, sparking global attention and market frenzy.

But behind this peak is a bloodbath for shorts. Data shows that within just four hours of breaking the new high, the short liquidation amount reached $340 million. Many investors shared screenshots of 'zero balance accounts' on social platforms, leaving messages saying: 'This is an open strangulation.'

Behind the Shock: The Reappearance of Short Squeeze and Liquidation Tide

Every time Bitcoin sets a new high, it is often accompanied by a brutal collapse of shorts. In the past 24 hours, nearly 120,000 traders globally were liquidated, with total liquidation amounts reaching $541 million, of which over 85% were short positions.

This wave of liquidations stems from the imbalance of long and short forces. As prices approached previous highs, $280 million in short positions were forced to liquidate due to stop-loss mechanisms, triggering a chain reaction of buybacks, creating a 'short squeeze' effect. Fed securities researcher Yang Jianyi commented: 'High leverage is a double-edged sword, a sword of Damocles hanging over traders.'

In fact, during the upward fluctuations of Bitcoin in early July, market futures shorts continued to accumulate, laying the groundwork for this sharp rise. As the price broke through $110,000, trading volume surged, and the short defense line completely collapsed.

Three Core Drivers Ignite This Round of Surge

1) Deep Institutional Involvement, Market Structure Undergoes Qualitative Change

Unlike previous market trends driven by retail sentiment, this round of increase is mainly driven by institutions. The joint intervention of ETF funds, listed company asset allocation, and corporate treasury reserves has transformed Bitcoin from a 'fringe speculative asset' into a mainstream investment target.

Data shows that the number of Bitcoins directly purchased by listed companies in the second quarter even surpassed ETF inflows. Institutions like MicroStrategy, which hold 'whale-level' positions, have driven their own stock prices to soar, while Coinbase also recorded a single-day increase of over 5%.

2) The Resonance of Technology and Cryptocurrency Markets

Nvidia's market value has surpassed $4 trillion, and the Nasdaq has hit new historical highs, this tech stock frenzy is spilling over into the crypto sector.

Bitcoin is increasingly being viewed by more institutions as a 'value anchor in the AI era,' as its scarcity and long-term data processing density logic are being revalued. Hong Kong stock analyst Yu Jianing pointed out: 'Bitcoin has become part of the underlying value consensus of the digital economy, forming a new paradigm of asset allocation with AI assets.'

3) Macroeconomic Easing Expectations and Regulatory Warmth Progress Together

The latest minutes from the Federal Reserve's meeting release dovish signals, increasing expectations for interest rate cuts, putting pressure on the dollar index, and raising the overall 'water level' of the asset market. On the policy front, the (GENIUS Act) is about to enter the legislative process, providing a compliant path for stabilizing coins and digital assets.

More revolutionary is the new accounting standards that will take effect in 2025: companies can account for crypto assets at fair value, with unrealized gains and losses included in the profit and loss statement, which will greatly promote institutional acceptance of Bitcoin.

Market Sentiment at the Crossroads: Breakthrough or Trap?

Standing at the height of $117,000, there is a subtle divergence in market sentiment.

The digital asset director of Standard Chartered Bank believes Bitcoin is likely to challenge $135,000 in the third quarter, and challenging $200,000 within the year is not a fantasy. The derivatives market has also shown support: the open interest of call options with a strike price of $120,000 expiring at the end of July has surged.

However, technical indicators are signaling overheating. Some short-term momentum indicators are nearing overbought territory, with price increases clearly concentrated in the areas where major funds have intervened. 'Tops do not form overnight, but they need time and confirmation to build,' reminds Ding Zhaofei, head of research at HashKey, advising investors not to be blinded by short-term gains.

Two key variables will be crucial in the coming weeks:

Progress on Regulatory Implementation: (Stablecoin Law) If it can be promoted in the third quarter, it will bring institutional benefits to the crypto market;

Liquidity Continuation Ability: If the spot trading volume cannot match the price increase, it may repeat the 'false breakthrough' market of 2021, with sharp rises and falls.

Bitcoin's 'Role Conflict': Hedge Asset or Risk Asset?

Bitcoin's 'dual attributes' are causing market controversy. On one hand, it is seen as 'digital gold' and a hedge against fiat currency depreciation; on the other hand, it is highly correlated with the Nasdaq, becoming a reflection of risk appetite.

When the market is optimistic, it benefits from technological prosperity; but whether it can still serve as a 'safe haven' when global situations change is still uncertain.

Retail investors' response strategy: Stay clear-headed and strictly control risks.

In the face of high volatility, OKX Research Institute's Zhao Wei suggests:

Mid to long-term investors are advised to adopt a 'gradual position building' approach to avoid chasing highs;

Short-term speculators must set clear take profit and stop-loss limits to avoid emotional trading.

Meanwhile, financial regulatory agencies frequently issue risk warnings, alerting to traps that use the names of 'blockchain' and 'digital currency' for fraudulent activities.

Gao Chengshi from the Blockchain Special Committee of the China Computer Federation pointed out: 'The biggest risk currently is the excessive use of leverage. Maintaining rationality during bullish sentiment is the key to traversing the cycle.'

Epilogue: The Stars and the Sea, Still Need to Cross the Stormy Waves

The numbers on the exchange's big screen are still fluctuating. A hedge fund manager in New York gazes at the Hudson River in the morning light and quietly says: 'Place half of the position at $120,000 to take profit, and let’s see how the other half goes.'

This experiment initiated by Satoshi Nakamoto is now being taken seriously by Wall Street. The holding records of giants like BlackRock and Fidelity in ETFs are breaking historical records, and an increasing number of listed companies are classifying Bitcoin as a core reserve asset.

The journey is towards the stars and the sea, but the storms remain treacherous. Whether Bitcoin can truly transition from frenzy to stability is actually just beginning.