On the first day of August, the cryptocurrency market welcomed a 'red opening', with Bitcoin plunging by 114,000! Ethereum dropped sharply to 3,600, altcoins crashed. Yesterday, in an article, Sponge mentioned the defense position for Bitcoin bulls at 115,700, which should not break again. This morning it fell below 115,700 again, and Sponge seized the opportunity of the flash crash, promptly reminding to place a long order at 114,288, making a small profit of 756 oil, feeling there is still a chance to probe lower, hoping to acquire lower chips.
BTC
BTC once again exhibited a rapid pullback after a high-level surge. Last night it approached the 119,000 point but could not stabilize, and then quickly fell back starting early in the morning, hitting a low of 114,300, with a daily pullback exceeding 4,400 points. A truly terrifying night!
Reasons for the crash
1. U.S. stocks fell across the board, impacting the cryptocurrency market.
2. The U.S. continues to initiate a tariff war, leading to market panic.
3. The U.S. spot Bitcoin ETF saw a net outflow of 114.69 million dollars yesterday.
4. Federal Reserve Chair Powell's speech was hawkish, and interest rate cut expectations have decreased.
5. The PCE data exceeded expectations, which was the direct trigger for this drop.
Bitcoin has currently fallen to the lower support area of the 2-hour channel, with the trend structure showing typical bearish characteristics—highs and lows continuously declining. Although the CME gap has been filled, the market has not shown a significant reaction.
If the price further retraces to the 113,800 to 112,000 range, it will enter a potential bottom-hunting area for short-term attention. The 112,000 position is not only the support and resistance conversion area of the previous high but also approximately a 20% drop from the top, which has certain technical support significance. Once this position is touched, it is expected to see a rebound space of 2,000 to 3,000 dollars.
ETH
After a unilateral rise, Ethereum has begun to face phase adjustment pressure. Currently, focus on the key support level around 3600: if the 3600 round number is not effectively broken, one can attempt to position for short-term longs in the 3636–3606 range; even if it breaks below 3600, it is likely still a 'false break'. The lower levels of 3588 / 3572 can be viewed as the next round of buying opportunities; if it continues to drop, consider averaging down near 3508, with 3500 set as the stop-loss point, ensuring proper risk control.
Short-term rebound resistance to watch above: 3745–3770 range. Operational suggestion: it is not advisable to chase shorts currently, only consider low long ideas after a pullback, and be cautious of Ethereum breaking out independently.
SOL
SOL is currently in a typical 'end-game betting zone' trend, with highs continuously declining and bearish pressure evident. It has already dropped below the 170 dollar mark in the morning session, facing short-term pressure. The day’s key support range to watch is: 165–168 dollars. Within this range, light leverage can attempt to position for rebound opportunities. For medium-term spot investors, it is recommended to enter in batches: 168, 163, 158 dollars as reference entry points.
Altcoins
Bitcoin has slightly pulled back, while altcoins directly staged a 'high dive'. The once-bull market feels like a distant legend, and today's market resembles a precise 'loss simulator'. It’s either buying at the mid-mountain or chasing highs to the ceiling; shorting leads to forced liquidation, while longing continuously breaks support; full positions encounter black swans, while light positions miss rebounds.
So the question arises—how should this generation of retail investors operate to avoid being cut out (in a tragic world)?
(1) Buy Bitcoin and Ethereum, short altcoins!
This strategy is actually more comfortable when the market is relatively mediocre. In choosing altcoins, follow the logic of shorting previously, prioritizing those with relatively high market capitalization, non-leading positions, weak trends, and low presence, and diversify short positions while setting stop-loss to prevent individual assets from surging.
If the market continues to be bullish in the second half of the year, I believe it will likely still be driven by Bitcoin and ETH. If it turns bearish, I don't think altcoins can stand on their own, while Bitcoin and ETH at least have institutional buying power supporting them.
Situations that could render this hedging thought ineffective: either the altcoin season really arrives, with most altcoins continuously outperforming ETH, or ETH oscillates or leads the decline, while other altcoins fall less. Based on experiences from these past months, I think the likelihood is low.
(2) Binance homepage—new coin listing—contracts.
You can select some high market capitalization coins that only have contracts without spot support, to implement a low-leverage short position strategy, treating your operation logic as a hedging strategy. Currently, many people’s trading logic is actually tracking the new coins listed on Binance or Korean exchanges, leveraging short-term market-making strength and liquidity heat to quickly make a wave of long order arbitrage. This is essentially a simplified gaming thought. Once market heat fades and liquidity decreases, if obvious distribution signs are observed, one can consider setting stop-loss to try short positions, betting on a structural pullback.
During the adjustment period for altcoins, quality assets can be bought in batches at lower prices. This stage is suitable for investors with funds to gradually position themselves, and it is recommended to consider mainstream assets with large market capitalization and high liquidity first, such as: BTC, ETH, XRP, DOGE, SUI, SOL, PEPE, PENGU, etc.
For retail investors, this could be a golden window for averaging down or building positions. Strategy suggestion: first filter quality assets, enter the market in batches, and gradually position, expecting a time window of 1–2 weeks. Subsequently, the market will likely enter a rally phase—don’t forget to take a screenshot as evidence, and wait and see.