📉 I. Recent price fluctuations and direct triggers
1. Flash crash after historical high
- On August 13, Bitcoin reached a historical high of $124,500, but plummeted to $117,000 just hours later, with a daily decline of 4.24%, liquidating over $880 million in leveraged long positions.
- Total cryptocurrency market cap evaporated 3.9% within 24 hours, with altcoins (like REZ, SSV) generally dropping over 15%.
2. Macro data shocks
- U.S. PPI inflation soars: July producer prices rose 0.9% month-on-month (expected 0.2%), marking the largest increase since June 2022, raising market concerns about the Fed delaying rate cuts. The probability of a 50 basis point rate cut in September dropped sharply, while the probability of a 25 basis point cut remained at 90%.
- Policy expectations disappointed: Treasury Secretary Yellen explicitly rejected the plan to 'expand Bitcoin strategic reserves', breaking the previous expectation of 'sovereign funds entering' triggered by Trump’s executive order.
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📊 II. Structural contradictions in the market and long-term challenges
1. Risk asset characteristics still dominate
- Despite the 'digital gold' narrative, Bitcoin is closely linked to U.S. stocks (especially tech stocks). Following the release of PPI data, the S&P 500 reached a new high, while Bitcoin fell sharply, exposing its vulnerability to liquidity changes.
2. Regulatory and policy divergence
- Positive policy: The Trump administration allows 401(k) retirement accounts to allocate to cryptocurrencies, potentially introducing trillions in funds long-term.
- Negative constraints: The U.S. SEC delayed Solana ETF approval until October, and sovereign reserve plans in Germany, Japan, and other countries remain stalled, with regulatory ambiguity suppressing large institutional entry.
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📈 III. Technical indicators and on-chain signal interpretation
1. Key price ranges and patterns
- Support levels: $115,892 (short-term strength boundary), $112,000 (long-short watershed), $108,000–112,000 (Fibonacci 50%-61.8% retracement + 20-week moving average resonance zone).
- Resistance levels: $122,190 (recent high), $124,600 (key breakthrough of previous high).
- Potential risks: A 'double top' structure is forming on the three-day chart, similar to the pattern before the 35% crash in January 2025.
2. Capital and sentiment indicators
- Strong institutional demand: Bitcoin spot ETF inflows reached $23.093 billion weekly, totaling $54.99 billion; Ethereum ETF inflows were $1.273 billion.
- Derivatives calm: Futures annualized premium stabilizes at 9% (neutral range), with options delta skew only at 3% (no panic hedging observed).
- Whales accumulating: Addresses holding more than 1,000 BTC bought 18,000 bitcoins during the crash, with a cost of about $118,000–120,000.
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🔮 IV. Market outlook and focus of long-short battles
Short term (within 1 month)
- Bearish scenario: If the support at $112,000 is lost, it may drop to the $105,000–110,000 range, triggering a deeper correction (chain reaction of leveraged liquidations).
- Bullish scenario: Consolidation around $115,000–120,000, digesting excessive leverage, with funds rotating into Ethereum/altcoins. A breakout above $124,600 could initiate a new push towards $150,000.
Medium to long term (by the end of 2025)
- Core drivers:
- Federal Reserve policy: September interest rate cuts may materialize or liquidity expectations may restart, but inflation stickiness (especially PPI-CPI divergence) remains a hidden risk.
- Institutionalization process: 401(k) plans gradually incorporating crypto assets, continuous inflows into spot ETFs, forming long-term support.
- Price targets:
- Basic scenario: $125,000–135,000 (cyclical high).
- Optimistic scenario: If regulatory breakthroughs and interest rate cut cycles strengthen, it could rise to $250,000 (driven by institutional network effects).
