Traders woke up to a market that blinked red across the board — a historic wave of forced liquidations wiped out roughly $19B in 24 hours as Bitcoin plunged to $104,782 and Ethereum slipped below $3,500. The selloff hit high-beta names harder (DOGE, AVAX, HYPE), while geopolitical headlines — a renewed tariff standoff with China and a U.S. government shutdown that has effectively frozen SEC and CFTC operations — amplified fear. Yet on-chain flows signal rotation into BTC rather than a full exit from crypto, suggesting this may be a reset, not a rug pull.

What Just Happened

Mass liquidations cascaded through over-levered longs, driving volatility to extremes. With U.S. policy uncertainty and regulator downtime removing clarity and liquidity, risk assets repriced quickly. Altcoins underperformed as traders sought relative safety in BTC, lifting Bitcoin dominance.

Why This Matters to Traders

- Leverage reset cleans up froth and can build a healthier base for the next move. - Regulatory pause delays approvals and enforcement clarity, heightening headline risk. - Rotation to BTC often precedes market stabilization but pressures alt/BTC pairs.

Key Levels and Signals to Watch

- BTC: $100,000 psychological support; reclaim of $105,000 on 4H/1D closes shows strength; resistance zone $110,000–$112,500. - ETH: Watch $3,350–$3,500 as pivot; ETH/BTC weakness implies continued BTC-led market. - Derivatives: Funding turning negative + rebuilding but lower open interest can support a constructive bounce. - On-chain/flows: Exchange net outflows for BTC, rising stablecoin supply, and cooling realized volatility favor accumulation rather than capitulation.

Actionable Playbook for the Next 72 Hours

• Wait for confirmation: Consider longs only after a 4H/1D close back above $105K with rising spot bid and declining basis.
• Reduce leverage: Keep exposure conservative (≤2–3x). High volatility makes tight stop-outs more likely.
• Ladder entries: Scale bids between $100K–$105K with a hard invalidation below structure; avoid all-in entries.
• DCA in spot: If your thesis is long-term, scale in gradually; let the market come to you.
• Hedge smartly: Short-dated protective puts or small put spreads can cap downside while preserving upside.
• Monitor funding/OI: Re-entry is cleaner when funding stays ≤0 and OI recovers without aggressive perp premiums.
• Alt caution: Prioritize BTC until dominance stalls; avoid illiquid names. Memecoins are highly speculative and can gap through stops.

Scenario Map

• V-Reversal: Swift reclaim of $105K, funding ≤0, OI rebuilds → momentum scalps with tight trailing stops.
• Base-Build: Range forms $100K–$110K → sell rips, buy dips; fade extremes near range edges.
• Another Leg Down: $100K fails on volume → step aside or hedge; next liquidity pockets sit below round numbers.

Risk Management First

Set clear invalidation levels before entry. Size positions so a single trade loss is tolerable. Respect event risk from Washington and Beijing headlines while the SEC/CFTC

Bottom Line

This flush looks like a leverage cleanse with capital rotating into Bitcoin, not abandoning crypto. Trade the confirmation, not the hope: let price reclaim key levels, keep leverage light, and use hedges to stay in the game.

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