Last night's flash crash was not a coincidence: three major factors provided early warning:
1. Core factor driving: US PPI data skyrocketed: July PPI MoM +0.9% (expected 0.2%), YoY +3.3%, the highest since June 2022, raising concerns about sticky inflation. |
Revised expectations for Fed rate cuts: the probability of a rate cut this month remains above 90%, but the probability of rates dropping below 3.75% by January 2026 has decreased from 67% to 61%, weakening long-term easing expectations.
Policy narrative shattered:
2. Sovereign reserve expectations unmet: US Treasury Secretary Yellen explicitly denied plans to "expand Bitcoin strategic reserves," crushing institutional entry hopes sparked by Trump’s March executive order.
Regulatory uncertainty: Progress on the "GENIUS Act" is slow, discussions on sovereign reserves in countries like Germany and Japan are stagnant, and institutional funds are on the sidelines.
Key technical signals: Structural deterioration and support game
3. Top pattern confirmed: Three-day chart forms a "double top" structure, RSI divergence indicates momentum exhaustion.
Bulls and bears divide:
Short-term support: 117,300-117,900 (50-day SMA + Fibonacci + psychological level), a breach would lead to a dip to $112,000.
Resistance range: 123,200-124,600 (previous high + liquidity gap), a breakout requires increased volume.
Bullish logic: Whale accumulation + on-chain undervaluation + support from rate cut cycle for long-term bullish outlook.
Bearish risks: Double top technical structure + unmet policy expectations + recurring inflation suppressing breakout momentum.
4. Operational strategy recommendations
1. Short-term (1-3 days):
Breakout strategy: If stabilizing above $120,800, consider light long positions, targeting $124,600, with a stop loss below $117,300.
Response to a drop: If breaching $117,300, wait until the $112,000 support zone to build positions in batches.
2. Mid-term (1-3 months):
Dollar-cost averaging range: $115,000-118,000 (whale cost zone), targeting $130,000 after rate cuts are implemented.
5. Risk warnings
Technical collapse: If $112,000 is breached, it may trigger programmed selling down to the $105,000-110,000 area.
Macro black swan: Continued PPI-CPI inflation divergence, sudden changes in SEC regulatory policy, or exchange hacking incidents.
6. Technical outlook:
Intraday: Range-bound between $117,300-$120,800, waiting for breakout direction.
Before September: If the $117,300 support holds, driven by rate cut expectations, another test of the previous high of $124,500 is expected;
Whale bottom fishing and neutral derivatives structure show that smart money has not exited, and the sharp drop seems more like a washout rather than a trend reversal, with the mid-term uptrend intact.