Regulatory Storm and Liquidity Crisis: ETH and BTC Face Significant Tests in the Short Term

Bitcoin's attempt to break the key resistance level of $98,000 has encountered obstacles, which are not merely a simple technical correction, but rather a concentrated release of multiple macro risks. The SEC's regulatory policy has taken a sharp turn, there has been unusual migration of on-chain whales, and the Layer 2 settlement system is under pressure, compounded by panic in the derivatives market, creating a complex risk landscape.

Regulatory Black Swan: SEC Hits the Pause Button on Crypto ETFs

The process of Bitcoin's current push to a historical new high encountered strong resistance at the $98,000 position due to policy measures. The U.S. Securities and Exchange Commission (SEC) suddenly suspended the approval process for three cryptocurrency ETFs, breaking the market's expectations for a gradual improvement in the regulatory environment. Unlike the previous technical selling pressure, the core driver of this pullback comes from policy uncertainty—regulatory concerns loom large, directly shaking institutional investors' confidence in entering the market, and panic sentiment quickly spreads.

The shift in regulatory policies often has a delayed but lasting impact. The suspension of ETF approvals not only affects short-term capital flows but, more importantly, alters the timeline for the compliance process of crypto assets. In the absence of a clear regulatory framework, institutional funds tend to adopt a wait-and-see approach, which explains why BTC experienced such a sharp correction as it approached the psychological barrier of $100,000.

On-chain movements: Whale migrations and Layer 2 system risks

On-chain data reveals deeper market turmoil. A mysterious address recently executed a rare large-scale asset migration, with a total of 120,000 BTC transferred in batches to multiple new addresses. Such a volume of transfer operations typically indicates institutional position adjustments or changes in custody structures, and at sensitive moments, it can easily evoke associations with "panic selling."

Meanwhile, the Ethereum ecosystem is experiencing rare technical pressure. The daily liquidation amount of Layer 2 networks has reached a historical high, causing the mainnet Gas fees to soar over 500% in a short time, with network congestion approaching a state of paralysis. High Gas fees not only suppress on-chain activity but may also trigger a chain liquidation risk for DeFi protocols — when transaction costs exceed staking rewards, forced liquidations will self-reinforce, creating a vicious cycle of "congestion-liquidation-recongestion."

Market Data Overview: $1.86 billion in liquidations and liquidity contraction

In the past 24 hours, the total liquidation amount across the network reached $1.86 billion, highlighting the vulnerability of excessive leverage. In terms of market sentiment indicators, the Fear and Greed Index has dropped to 27, entering the "Extreme Fear" zone, indicating that the confidence of retail investors and short-term funds is on the verge of collapse.

More concerning is the deterioration of data on the liquidity front:

• The value locked in DeFi has evaporated $12 billion within a week, indicating that funds are accelerating their exit from on-chain financial protocols.

• The USDT premium rate has dropped to -2.3%, indicating a weakening willingness of on-site funds to purchase stablecoins, which usually signals a tightening of liquidity.

• The options market's put-call ratio has breached the warning line, indicating that the derivatives market is pricing in a greater risk of decline.

Some analysts warn that the current market leverage ratio has reached a dangerous threshold, and based on historical data models, the probability of a black swan event occurring exceeds 70%.

Derivatives and Funding: Dual Warning Signals

The structural changes in the options market often precede spot prices. The volume ratio of put options to call options continues to rise, indicating that professional investors are actively positioning for downside protection. This "insurance buying" behavior itself can become a source of selling pressure, especially amplifying volatility when market makers hedge their positions.

The negative premium of USDT is another underestimated risk signal. In fiat channels such as the Renminbi, a negative premium not only reflects weakened demand but may also imply that certain regional markets are facing capital outflow pressure or a decline in the demand for trading medium conversion, which poses a potential blow to the crypto market that relies on the liquidity of stablecoins.

Macroeconomic Noise: The Indistinguishable "Central Bank Coin Purchases" Rumors

Market rumors suggest that a central bank has purchased 30,000 tons of Bitcoin, accounting for 1.4% of the total supply. This figure raises obvious doubts at the factual level—Bitcoin is measured in "units," and the use of "tons" creates conceptual confusion. Furthermore, the 1.4% share corresponds to approximately 294,000 BTC, which does not match the scale of "30,000 tons." Such unverified information frequently appears in volatile markets, becoming part of the market noise and testing investors' discernment.

Conclusion: Risk control is prioritized over speculation.

The current market is in a complex environment with overlapping pressures from regulation, technology, and liquidity. For holders of ETH and BTC, the core advice is not to predict the bottom, but to implement strict risk management.

1. Leverage positions should be decisively reduced to avoid becoming fuel for forced liquidation.

2. Pay attention to the congestion relief of Layer 2 networks and assess whether the systemic risks of DeFi are controllable.

3. Be wary of changes in regulatory news, as policy risk remains the biggest source of uncertainty.

4. The premium of stablecoins and options data need to be continuously monitored, as these two indicators will first reflect the market sentiment turning point.

During periods of extreme volatility, "surviving" is more realistic than "betting on a rebound." The market is undergoing a stress test concerning liquidity, confidence, and regulatory expectations. Investors should adopt a defensive posture and wait for clearer signals of conviction to emerge.

Risk Warning: The content of this article does not constitute investment advice. The cryptocurrency market carries extremely high risks, please make cautious decisions.