In recent days, global markets have been plummeting. The US stock market has crashed, gold and silver have both fallen, the cryptocurrency market has experienced consecutive liquidations, and Bitcoin has dropped directly from $73,000 to $60,000.

There is a saying circulating in the market that this wave of crash is due to some old financial powers in Europe being very dissatisfied with Trump's proposal of a tripartite division of the world among the US, China, and Russia. With the support of the Democratic Party in the US, they have started to sell off on a large scale to express their dissatisfaction.

From the data perspective, this logic is not completely baseless.

According to data from the US Treasury, foreign investors hold approximately $30.9 trillion in US securities, with the combined public and private sectors in Europe amounting to nearly $10 trillion, which is a very high proportion.

These funds are mainly distributed across three asset classes: U.S. Treasury bonds, U.S. stocks, especially large technology stocks.

For a long time, Europe has been a stable buyer of U.S. Treasury bonds and an important force supporting the high valuation of U.S. stocks.

It can be said that in the global capital structure, European funds are one of the most important financial backers for the U.S.

If these funds suddenly start to shrink or even withdraw, the impact on the market would indeed be very significant.

In the crypto market, because of the high proportion of Trump supporters, this round of decline has been hit the hardest.

In addition to political factors, U.S. stocks are also undergoing a round of deleveraging.

The current situation is that the scale of borrowing to invest in stocks in the market has reached a historical high, while the cash ratio in investors' hands has hit a historical low, and the leverage that can be added has basically been maxed out.

The cash position of fund managers has fallen to a historical low, and the short positions in the S&P 500 and Nasdaq ETFs have also dropped to a historical low.

Simply put, the bulls have already run out of bullets, and the bears have no new ammunition, putting the market in a very fragile high position.

In this high-expectation environment, as soon as there is a slightly negative piece of news or a significant increase in costs, it can easily be magnified into a sell-off.

Last Thursday's sharp drop in Microsoft was actually an early signal.

The recent decline in Bitcoin is largely following U.S. stocks, but with greater volatility.

How is the on-chain data?

From the data, market sentiment has clearly turned to panic. Short-term investors are selling off in large quantities.

However, even with such a sharp decline, early long-term holders have not shown significant selling.

This indicates that this rapid decline is more due to insufficient liquidity, rather than everyone fleeing in panic.

From the sentiment indicators, things are already very extreme. The Fear and Greed Index has dropped to 9, indicating extreme fear.

The weekly RSI indicator has also fallen to its lowest level since the pandemic, and the 4-period overlapping chart has shown serious overselling.

So, from a rhythm perspective, Bitcoin is likely in the process of following U.S. stocks to deleverage, slowly finding its bottom.

The speed of the decline is increasing, and the slope is becoming steeper, clearly accelerating the release of risk.

But just as the parabolic rise cannot last forever, the parabolic decline is also unsustainable, and it is highly likely to gradually slow down later.

This recent round of adjustment actually increasingly feels like a U.S. stock-style decline, where when it’s time to drop, it does so decisively, and deleveraging is often completed in a very short time.

This wave of decline has also made many large institutions very uncomfortable.

On the BTC side, MicroStrategy MSTR's paper losses have exceeded $10.16 billion.

On the ETH side, BMNR's losses have also exceeded $8.65 billion.
Even more dangerously, another heavily invested ETH institution, Yilihua, was close to being forcibly liquidated yesterday.

An hour ago, Trend Research sold another 19,000 ETH to repay loans, having cumulatively sold 215,500 ETH.

It can be seen that the pressure at the institutional level is indeed significant.

Overall, this round of decline is more like a combination of political games + market deleveraging + liquidity exhaustion.

It is not that long-term funds are fleeing in panic, but that the short-term environment is too poor, the money is too little, and the sentiment is too fragile.

Historical experience tells us to remain calm in times of extreme optimism and even more so in times of extreme panic. So I bought a position at 62100.