When all good news becomes an excuse for crashing the market, you need to be alert—this is not a bull looking back, but a long-planned harvest!

On August 15, the Federal Reserve announced the end of the two-year new activity supervision program, and banks no longer need to kneel for approval to conduct cryptocurrency business, officially included in the regular regulatory framework—this was an epic boon for traditional capital's entry.

However, the market staged a bloody scene: Bitcoin plummeted from $124,500 to $117,180, Ethereum crashed to $4,451, with $1.031 billion evaporating in 24 hours, and 220,000 investors suffered liquidations.


Good news turns into a butcher's knife, revelry becomes a graveyard—this script of crashing the market under the guise of good news reveals the cold nature of the major players' harvesting.

1. Good news nuclear bomb and bloody crash: The perfect trap of the manipulators buying expectations and selling facts


Policy loosening is a real boon

The Federal Reserve cancels the pre-review system for banks' crypto businesses, and collaborates with OCC and FDIC to abolish restrictive guidelines, completely tearing apart the 'crypto stigma' label. Chinese blockchain stocks surge: Straits Innovation skyrockets 17.37% in a day, Tonghuashun soars 16.27%, capital bets real money on industry explosion.


Market reaction, however, bizarrely crashes

On the day the policy was announced, Bitcoin plummeted by 7,000 points, and Ethereum broke through the $4,500 defense line, with leveraged longs collectively going bankrupt, washing the market clean. Among the five major crash triggers, the PPI data being negative is merely the fuse:

Institutional ETF funds flee en masse: The US spot ETF saw a net outflow of $293 million in a single day, ending six consecutive days of inflow;

Massive profit-taking precisely hits the market: After reaching historical highs, whales cash out, causing selling pressure to pierce through the weak liquidity zone;

Derivatives leverage meat grinder: High-multiple contracts trigger chain liquidations, $1 billion goes up in smoke.

The logic of the manipulators is laid bare: Good news turns into an opportunity to offload! While retail investors cheer for regulatory easing, smart money has long borrowed favorable policies to distribute at high positions.

2. How manipulators use good news to complete harvesting:

1. Policy expectations are hyped in advance, good news lands and then shorts are initiated

The Federal Reserve's regulatory shift had long been signaled: In April, the three major institutions withdrew restrictive guidelines, and in July, a joint statement acknowledged the legalization of bank custody.

Insider capital has long been lurking: Institutions like MicroStrategy raised BTC to $124,500 based on policy expectations, and once the policy was announced, they instantly sold off, perfectly realizing the good news distribution.

2. Leverage liquidation triggers death spiral

During market euphoria, the exchange's derivatives open interest spikes to dangerous levels. When PPI data triggers a slight pullback, high-leverage longs instantly go bankrupt, forced selling causes a chain reaction:

Bitcoin breaks below the key support at $120,000, triggering a panic exit of $516 million ETF funds;

Ethereum borrowing rates exceed staking yields, circular leverage strategies collapse, with $3.8 billion in staked ETH queuing to exit, exacerbating selling pressure.

3. Long and short battle: Is the crash a golden pit or a mass grave?

Bullish logic: A good opportunity to get on board when the bull looks back

Weekly upward trend remains unbroken, Ethereum has just broken through years of pressure, and volume supports a second peak.

The probability of the Federal Reserve cutting interest rates in September remains at 90%, and expectations for liquidity easing have not been extinguished;

Wave of RWA tokenization explodes, MKR and ONDO raise over $300 million in a week.


Short alarm: Beginning of the leverage bubble burst

BTC futures momentum index drops to zero, bullish momentum phases out;

On-chain US dollar liquidity cracks widen: USDC borrowing costs and on-chain interest rate differentials hit new highs by the end of 2024, indicating systemic risk;

If Bitcoin's daily line breaks below $115,000 support, it will trigger a bearish technical structure.

At this moment, we await the Jackson Hole meeting on August 21. If Powell releases a signal for interest rate cuts, it will become the horn for a counterattack; if hawkish remarks are made, the crypto market will face its ultimate test.

There are no deities in the crypto circle, only smart people who can read signals. Old Zhao's articles do not boast or paint a picture, but teach you practical survival skills. Follow Old Zhao for daily strategies and know in advance.#美联储取消创新活动监管计划 $BTC