Brothers, today is February 1st, a big event has happened! The big beautiful government actually managed to shut down, can you believe it? Now the whole screen is buzzing with "Is this really a shutdown or not?"
We can tell from the market's reaction. First, prices collapsed, data exploded, and this is the hardest answer. In the past 24 hours, over 410,000 people were liquidated, 2.53 billion dollars vanished, and the largest single ETH contract lost 223 million! This is not retail emotional behavior; this is clearly a chain reaction in the market, with one link triggering another.
So, the question arises, brothers, what is the market really afraid of with this government shutdown?
To put it bluntly, it's like the 'boots on the ground'. Before, we were guessing whether there would be a shutdown, and now some institutions have really stopped. The first reaction of funds is to run! First, reduce risk exposure and then talk. When macroeconomics sneezes, the crypto market catches a cold first, and this time it really caught fire.
But you have to see the whole picture. This wave of short selling is fierce, and it's not just the crypto circle that's suffering. A quick glance makes it clear: crypto is falling, and gold and silver are also dropping, all risk assets are shrinking. The signal is very clear: the market is not targeting anyone specifically, but everyone is entering 'defense mode'. I remember saying before that the market is like a mirror that reveals demons; when systemic risk appears, no one can pretend nothing is wrong.
Alright, here comes the question again: why start cutting leverage first to reduce risk?
This is the most critical aspect: when large funds encounter such situations, they won’t rush to sell their spot holdings, but will first cut the most dangerous positions—those high-leverage contracts. The result we see is not a gradual decline, but a chain of liquidations and liquidity being drained, with prices being smashed down by forced liquidations, not a natural retreat at all.
Speaking of that 223 million ETH liquidation, was it a coincidence? Definitely not. What role does ETH play in the circle now? It is the center of liquidity, the gathering place for leverage, and the magnifying glass of emotions. When the system is under pressure, it gets hit first. This is also in line with what I discussed previously: if Bitcoin doesn't rise, other coins that go up will have to fall back. As the second largest, ETH naturally became the first gate when leveraged funds ran away.
25.3 billion dollars, guys, just like that it's gone, what does this mean?
It's not that faith is gone, nor that the bull market is over, but that the market's position structure has collapsed first. Many people are not misjudging the direction; they just didn't calculate whether they could survive this wave of volatility. I always say that trading contracts is about risk control and position management; as long as you’re alive, you can still contribute. In such market conditions, blindly going long or short is gambling with your life. You must recognize the reality: this is a fierce deleveraging, and it’s not over yet. But, guys, don’t treat it like the end of the world, because if you feel confused, don’t want to look at the market, or are afraid to operate, that’s totally normal; everyone feels the same.
If you don't believe it, look at what those big institutions are like now: MicroStrategy holds over 710,000 BTC, with the cost line right beneath them; if it falls another 3000 dollars, they’ll be trapped; Tom Lee's Bitmine holds over 4 million ETH, with a floating loss of 5.9 billion, down 36%; Yi Li Hua's fund is even worse, with 650,000 ETH's liquidation price approaching 1880, just one breath away. If institutions are like this, what good does it do for us to panic? If the sky falls, there are still tall people to support it, right?
So, will my brothers ask: what to do with BTC and ETH next? My thought is very simple: just trade back and forth within the range, seize the opportunity. As long as you don’t blindly chase highs or sell lows, there’s always a chance.
Bitcoin is now around 78710, with recent support at the morning low of 78.5k below, and resistance at 79.5k-80k above. It has been grinding here for a long time. If it comes back to around 78.5k tonight, consider picking some up. For the rebound, first look at 80k, if it breaks through, then look at 81k. If it bounces up to the resistance zone and can’t get above, just short it hard, targeting the range of 76k-78k.
Ethereum is now at 2644, with strong support around 2420 and resistance above at 2680-2700. If it returns to around 2450, you can try a small long with a target of 2700, and if it breaks through, then look for 2850. If it rebounds to the resistance zone and weakens, there's no problem shorting a bit; look for 2350 below.
Overall, the downtrend is not finished yet, and the external situation is also chaotic. It’s safer to operate with the trend and short from high positions; if you're unsure, just watch and don’t force trades. First, take a wait-and-see approach; generally, the probability of making profits with short positions is much larger than with long ones!
In the end, the most important thing in investing is to keep your hands steady. I've been reminding everyone in my articles: never be completely out of the market to avoid missing out entirely; but also never be fully invested, leave some room for yourself. It's better to miss out than to make a mistake. The market is always fluctuating; if you protect your principal, you'll still be at the poker table when the next opportunity comes.
Alright, that’s enough for today. If you want to sync with me to monitor the market, catch altcoins and meme trends, feel free to chat in the community. There are real-time strategies every day. Follow along with Bai Ge; I’m not asking for overnight wealth, just seeking steady growth. Give a thumbs up and follow to stay updated, so when the next market change happens, you can find Bai Ge right away.
