I. Why the crash?
1. Dollar liquidity tightening and the Fed's hawkish shadow
TGA account bloodletting effect: The US Treasury recovers liquidity through the Treasury General Account (TGA), causing dollar cash reserves to rise to $800 billion, shrinking the market's liquidity pool. The dollar index soared above 105, putting pressure on risk assets, with Bitcoin being the most affected.
Interest rate cut expectations fail: Stronger-than-expected US economic data (such as services and employment markets) weaken the expectation for a significant interest rate cut by the Federal Reserve, causing the 10-year Treasury yield to rise to 4.8%, with funds shifting from high-risk assets to fixed-income products.
2. Market sentiment collapse and leveraged liquidation storm
ETF fund outflow: Bitcoin spot ETFs have seen a net outflow for six consecutive days, with a single-day loss of up to $516 million as institutional investors accelerate withdrawals, leading to a collapse in market confidence.
Leverage chain liquidation: Over $1 billion in long positions have been forcibly liquidated in the past 24 hours, with high-leverage traders triggering a 'downward → liquidation → accelerated decline' death spiral.
Meme coin tumor effect: The scandals and exodus of meme coins like Dogecoin have polluted the crypto ecosystem, leading to drops of 41% and 28% in Solana and Ethereum, respectively, dragging down Bitcoin market trust.
3. Failed policy expectations and technical breakdown
Trump's 'crypto commitment' fails to deliver: The previously anticipated 'Bitcoin strategic reserve' plan from the Trump administration is slow to progress, with the regulatory framework being implemented at a speed slower than expected, spreading investor disappointment.
Key support level breached: Bitcoin has fallen below the 2025 average realization price of $100,356 and breached the technical support level of $91,000, triggering programmatic trading stop-loss orders and intensifying selling pressure.
II. Why are we still optimistic in the long term?
1. Policy dividends are building up
US regulatory thaw: Trump nominates cryptocurrency supporter Paul Atkins to take over as SEC chairman, plans to establish a 'cryptocurrency tsar' position, simplifying regulatory processes and accelerating institutional entry.
Global central bank reserve experiment: The Czech central bank plans to use €7 billion to buy Bitcoin as foreign exchange reserves, which, if successful, could trigger a domino effect in Europe, reinforcing Bitcoin's status as 'digital gold.'
2. Institutional accumulation and supply-demand imbalance
ETF siphoning effect: Giants like BlackRock and Fidelity have locked in their holding costs above $90,000, while a long-term 'buy and hold' strategy compresses circulation. Standard Chartered predicts that ETFs will attract $39 billion in inflows.
Halving cycle approaching: Bitcoin production will be halved again in 2025, with miners' average daily selling pressure at only 900 coins, while institutional daily demand exceeds 3,000 coins, with the gap continuing to widen.
3. Technical narrative upgrade
DeFi bottom assetization: The cross-chain protocols of Solana, Ethereum, and Bitcoin have matured, with Bitcoin staking yields reaching annualized rates of 8%-15%, attracting conservative capital allocation.
Energy-computing closed loop: The explosion of AI computing power drives the joint construction of a green grid by mining machines and data centers (such as Tesla's Texas factory), reconstructing the global infrastructure value network.
4. Rigid demand for inflation hedging
Fiat currency devaluation crisis: The inflation rate in the Eurozone once soared to 10.6%, and the dollar's purchasing power has shrunk by 40% over the past decade, making Bitcoin's absolute scarcity of 21 million coins the ultimate weapon against inflation.
III. Risk warning, market deeply declines
1. Short-term volatility trap
Miner selling tide: If the price falls below the shutdown price of $78,000, total network computing power may drop by 15%, with mining farms selling inventory tokens to pay for electricity, intensifying downward pressure.
Geopolitical black swan: Escalation of Middle East conflicts or intensification of the US-China tariff war could trigger a collective collapse of global risk assets.
2. Regulatory and trust crisis
Policy reversal risks: The EU MiCA regulations are about to be implemented, and the US SEC may still launch surprise inspections on exchanges, raising compliance costs and stifling innovation.
Shadow of hacker hijacking: Exchanges like Bybit and Infini have been continuously hacked, with $1.5 billion in assets stolen, exposing 'decentralized' security vulnerabilities and shaking investor confidence.
Anchoring value coordinates in the storm
The crash of Bitcoin is a result of a resonance of short-term liquidity crisis, emotional panic, and technical breakdown, but its long-term value logic has not been overturned. The core contradiction lies in:
Short-term: $80,000 is a psychological defense line; breaching this may trigger a deeper correction to $75,000, but major whales are accumulating at low prices, creating a new three-month high in buying volume, with bottom support gradually appearing.
Long-term: Under the triangular drivers of institutional accumulation, halving cycle, and policy dividends, the targets of $500,000 from Standard Chartered and $1.5 million from Ark Invest remain reasonable, but caution is needed against regulatory black swans and market corrections.
