US Treasury Secretary's policy 180-degree turn! The lifeline of Bitcoin at $118,800 is exposed, and a battle between bulls and bears is imminent.

The crypto world is in chaos! US Treasury Secretary Bascent just made a strong statement on a TV show saying 'don't buy Bitcoin', and just a few hours later changed his tune on social media, claiming 'the Treasury is exploring budget-neutral ways to increase its Bitcoin holdings'. This policy blunder directly ignited market sentiment, with BTC price experiencing a roller coaster around $118,800—highs of $123,000 in the early morning and crashing back to the support level of $118,000 in the afternoon, with shorts facing liquidations of $820 million in 24 hours, while bulls seized the opportunity to buy the dip. This drama is bloody enough!

Policy reversal: From 'not buying' to 'indirectly increasing holdings', what is the US government really up to?

According to the latest report from Jinshi Data, Bascent's 'not buying' statement on Fox Business in the morning was overinterpreted by the market. In fact, the executive order signed by Trump in March has clearly stated: The US Bitcoin strategic reserve will be based on confiscating criminal assets and expanded through 'budget-neutral' means. In simple terms, the government won't actively buy coins but will continue to confiscate BTC from black market operations. This detail was urgently clarified by Bascent on social media, but the market had already fallen in response—BTC price retraced from $123,000 highs to $118,000, a drop of 3.9%.

Technical battle for survival: $118,800 as the dividing line for bulls and bears.

From the technical indicators in the attached chart, $118,800 is the current key support level (marked as one-tenth of $118,801.1 in the chart, it should actually be around $118,80.11). This price level is not only a densely packed area of historical retracement but also conceals three major mysteries:

  1. Resistance turning into support: The original resistance level around $12,450 faced selling pressure, but after the price broke down, $118,800 became the last defense line for bulls;

  2. Trading volume leaks: During the pullback, trading volume decreased, indicating a weakening of selling power, but buying pressure has not yet entered on a large scale;

  3. RSI overbought warning: Although the RSI on the 4-hour chart hasn’t peaked, the expansion of the MACD golden cross shows bulls are still in control.

Double whammy of policy and technicals, what’s next for BTC?

The repeated policies of the US Treasury Secretary expose one signal: The US still views Bitcoin as a 'tool for harvesting criminal assets', rather than an active investment. However, the market has voted with real money—BTC's market share has dropped from 55.7% to 51.2%, but institutional funds have seen a net inflow of $1.17 billion in 24 hours, with CME futures' open interest increasing by 12% weekly, indicating that large funds are still positioning themselves.

In the short term, $118,800 is the lifeline:

If it holds, coupled with MACD golden cross, the price may rebound to the $119,000-$120,000 range;

If it breaks down, the next battleground at $117,000 (the dividing line for bulls and bears) may trigger a chain of liquidations.

Survival in the crypto world: Don't let the policy 'drama queen' lead you.

The US Treasury Secretary is playing word games, but the technical indicators won't lie. Currently, BTC is in a phase of 'digesting negative policy impacts + technical corrections' overlapping stages. Ordinary investors need to remember:

  1. Light positions to try going long: ambush just below $118,800 by 1% (around $117,000), set stop loss at $116,800;

  2. Breakout to add positions: If there is a volume breakout at $118,500, look for a rise to $120,000;

  3. Beware of macro black swans: August 15th US GDP data and Federal Reserve rate cut expectations may trigger volatility at any time.

Technical personal views: BTC has formed a critical lifeline at $118,800! The original resistance level at $12,450 has turned into the last defense line for bulls after being breached, and shrinking trading volume suggests short sellers are exhausted, but buying pressure has not yet entered on a large scale. MACD golden cross expansion + RSI not overbought, if this level holds in the short term, bulls are expected to rebound to $119,000-$120,000; if it breaks, $117,000 will become the next critical point. The technical aspect has clearly drawn the 'lifeline', who will break the deadlock first, bulls or bears?

There is no 'holy grail' in the crypto world, but there is a 'lifeline'. The support at $118,800 is the 'lifeline' drawn by the technicals for bulls, and also the 'minefield' laid for bears by the policy side. In this battle between bulls and bears, which side are you on?

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