Bitcoin Liquidity Crisis: The Truth Behind the Frenzy

Recently, strange phenomena have frequently appeared in the crypto world: whales dumping 9 billion Bitcoin, yet the market remains calm; 500 million in short positions leading to global regulatory pursuits. This exposes the brutal reality — institutions are reveling while retail investors are exiting.

Superficially, trading is active, but in reality, liquidity is distorted: leading exchanges monopolize 90% of trading volume, with price differences on smaller platforms reaching 5%; active addresses of retail investors have plummeted by 17%, and weekend volatility is 40% higher than on weekdays, turning them into waiting prey.

The harvesting tactics of institutions are quite simple: use regulatory rules to force small platforms out, monopolize liquidity; conduct large trades covertly in the over-the-counter market, while in the spot market “poking the needle” to liquidate retail investors — on August 3rd alone, 900 million in funds evaporated.

Retail investors have only three options to break through: seek refuge in decentralized platforms, closely monitor policy loopholes (such as compliant exchanges in Hong Kong), avoid frequent trading, and hold onto Bitcoin. It is important to remember that institutional off-market chips have bottomed out, and the spot gap could ignite a market surge at any moment.

This crisis is not the end, but a reshuffling. When institutions weave their capital web, retail investors' chances hinge on decentralization against centralization, and time against volatility.

The next 9 billion sell-off may be just around the corner.

How long do you think this crisis will last?

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