The cryptocurrency market experienced a dramatic turn last night: Ethereum co-founder Jeffrey suddenly transferred $260 million worth of ETH to an exchange for liquidation, while a mysterious whale used $800 million in funds to go long on BTC with 40x leverage. Meanwhile, the signals released by the Federal Reserve regarding monetary policy have further shrouded the market in uncertainty. This complex interplay of insider trading, leveraged speculation, and macro policy is pushing the market towards a critical decision point.
Ethereum founder's liquidation: Another warning from the peak-escape master?
On-chain monitoring data shows that Jeffrey transferred all remaining 78,000 ETH (worth about $260 million at current prices) from his wallet to Kraken exchange at 21:43 UTC on May 22. This operation caused a violent market reaction because his historical operational trajectory can be described as a "textbook case of precise peak escape": six months ago, he sold 20,000 ETH when it was at $3,700, and a year ago, he transferred out 10,000 ETH when it was at $3,800, both times selling accurately at the upper range of the stage peak.
It is worth noting that ETH's recent performance is triggering the historical pattern of "doubling to peak": the current rally initiated from $1390 has reached $2736, with an increase of nearly 100%. Similarly, the phenomenon of "doubling at the bottom indicates a peak" in the Bitcoin cycle is also significant: key points such as 15,000→30,000, 25,000→49,000, and 38,000→74,000 all conform to this pattern. ETH's current position is highly similar to the technical pattern before the two attempts at breaking $4000 in 2021; although the number of active addresses on the chain is still increasing, the frequency of large transfers has already seen a 12% decline.
However, the contradiction lies in: If based on Bitcoin's "Greed Index of 85 indicates a peak" historical backtest, the current index of 75 suggests its peak may be between $115,000 - $120,000 (currently at $112,000), while ETH has already completed its doubling in advance. Behind this divergence is Wall Street's institutional capital reshaping the market — Bitcoin spot ETF inflows have approached $10 billion in a single month, absorbing selling pressure unimaginable in traditional markets, causing the pullback that should have occurred to be forcefully smoothed out.
$800 million leveraged bet on BTC: The life-and-death speed of a 40x long position.
In sharp contrast to the panic surrounding ETH, there is a spectacle of "leveraged gambling" emerging in the cryptocurrency market. On-chain data tracking shows that an anonymous whale opened an $800 million long position in BTC perpetual contracts on Deribit exchange in the early hours of May 23, using 40x leverage (with a margin of $20 million), and its liquidation price is at the $100,000 integer mark. As of the time of writing, this position has already taken profits near $111,000, with unrealized gains exceeding $48 million.
This trader, referred to as a "whale trader" within the circle, previously accurately predicted BTC's rebound to $114,000 after a pullback to $102,000. His operational logic integrates technical analysis and capital judgment: "Wall Street capital is still continuously building positions through ETFs, with institutions accounting for 62% of open interest in CME futures. In this case, the support at $100,000 is very strong." However, he also set a strict stop-loss: "If it falls below $102,000, must cut positions; once institutions take profits, the risk of a stampede cannot be underestimated."
This high-leverage speculation reflects the extreme emotions in the current market: although the Greed Index has reached 70, the contract long-short ratio is only 0.58, and retail participation is significantly lower than that of institutions. A head of a quant team pointed out: "The whale's $800 million long position is equivalent to betting on a shift in Federal Reserve policy, but after Moody's downgraded U.S. Treasury ratings, the 30-year Treasury yield broke above 5%. In this situation, high-leverage positions are like dancing on a volcano."
Federal Reserve's interest rate cut expectations reversed: Inflation data becomes a key variable.
The market's focus is shifting towards the upcoming PCE inflation data. According to Wall Street "mouthpiece" Nick, the core PCE month-on-month growth rate for April may be only 0.13%, significantly lower than the market expectation of 0.2%. If this data is verified, it will provide short-term support for risk assets like Bitcoin, as low inflation may strengthen expectations for the Federal Reserve to cut rates within the year.
However, the signals released by senior Federal Reserve officials lean towards a hawkish stance. Federal Reserve's third-in-command Bostic clearly stated, "There may only be one rate cut this year," while New York Fed President Williams emphasized that "the risks of premature rate cuts are extremely high," and noted that the balance sheet reduction process will continue as planned. This policy tone resonates with the 30-year Treasury yield breaking above 5%, leading to a $72 billion shortfall in the Treasury market, exposing international capital's concerns over dollar assets.
Moody's decision to downgrade the U.S. rating from AAA to AA+ further exacerbated market fears over the liquidity of U.S. Treasuries. A macro hedge fund manager analyzed: "Interest payments on U.S. Treasuries have already accounted for 4% of GDP, which is equivalent to double the military spending. In this situation, the Federal Reserve dares not cut rates significantly, otherwise, the debt snowball will grow larger. But not cutting rates will trigger a tightening of dollar liquidity, creating a vicious cycle."
Market crossroads: The ultimate contest between institutional bulls and the cycle peak.
The current market is in a state of rupture between traditional cycle patterns and institutional capital speculation:
Bullish logic: Institutions like BlackRock continue to increase holdings via ETFs, the Bitcoin exchange inventory has dropped to its lowest level since 2018, the efficiency of the Lightning Network has surpassed 10 TPS, and the macro-level trend of "de-dollarization" triggered by the U.S. Treasury sell-off provides long-term support for cryptocurrencies.
Bearish logic: The precise peak-escaping case of Ethereum's founder, the doubling peak pattern of ETH, the potential liquidity tightening triggered by the Federal Reserve's hawkish stance, and the accumulation of $510 million in short positions above $110,000 all constitute short-term pullback pressure.
It is worth noting that the issuance of virtual asset licenses in Hong Kong and the promotion of the U.S. GENIUS stablecoin bill are injecting expectations of compliance into the market. A blockchain research team from an investment bank pointed out: "When traditional financial institutions begin to use BTC as collateral to issue structured products, the market's pricing logic will shift from 'liquidity-driven' to 'asset allocation-driven,' which may change the original cyclical patterns."
In this war without gunpowder, the struggle for the $110,000 mark is not just a price game but also a clash of ideas between the old and new financial systems. For ordinary investors, maintaining position flexibility and risk control may be more important amid the intertwined signals of the Ethereum founder's liquidation and BTC's high-leverage speculation — just as the whale who gambled $800 million left a warning when taking profits: "Before the Federal Reserve's policy shoes drop, any leverage is a double-edged sword."
