Weekly Market Highlights Review: ALPACA Manipulation and US Encryption Policy - Market Maker Games and Mainstreaming Trends

This week, the price of Bitcoin fluctuated at a high level between $93,500 and $95,500. The SUI ecosystem, Virtual ecosystem, and some AI tokens performed well. The overall market is waiting for key economic data such as unemployment rate and non-farm payrolls to guide the direction.

The encryption market has recently presented a complex situation. An event involving a low market cap token revealed how market makers manipulate contracts, utilize short squeezes, and harvest retail investors through funding rates, highlighting market risks. At the same time, the U.S. policy stance towards supporting crypto assets is also accelerating its mainstream adoption.

1. Low Market Cap Token Events: market maker manipulation, funds determine rise and fall

A certain decentralized finance protocol is facing delisting by exchanges, but its token price has not only remained stable but has nearly increased 10 times within a week. This reflects the market maker's trading strategy:

1. Clearly define the final delisting target and maximize profits through price manipulation.

2. The first stage of controlling the market and stabilizing prices has completed the high-priced delivery.

3. The second phase involves a market maker's sell-off to lure in shorts, followed by a rise to harvest profits in the opposite direction.

4. Gradually dumping the goods after the third stage delivery.

In this process, short sellers have become the "fuel" driving the price increase:

1. The delisting announcement has triggered a large number of short orders.

2. The market maker accumulates spot and establishes a long position.

3. Negative funding rates provide market makers with additional capital to buy.

4. Price increases trigger short covering, forming a vicious cycle.

5. The exchange has shortened the funding rate settlement cycle, accelerating this process.

This event suggests that we can pay attention to tokens with low market capitalization, high contract open interest (OI), and abnormal funding rates, as there may be similar trading opportunities. However, we should be cautious of signals like a sudden drop in open interest.

2. Policy Regulation Trends

1. A certain exchange has been approved to list three cryptocurrency futures ETFs, but not the spot ETFs that the market was expecting. The SEC has delayed its decision on several spot ETF applications, with approval expected to be completed by June 2025. Analysts believe that the approval probability for most crypto asset ETFs is relatively high.

2. Arizona has passed the "Strategic Bitcoin Reserve Act," potentially making it the first state in the U.S. to establish a Bitcoin reserve. The law allows the state treasury and pension system to invest 10% in Bitcoin and plans to establish a digital asset strategic reserve fund. Although there is still a possibility of a gubernatorial veto, it reflects the trend of mainstreaming encryption. Currently, several states in the U.S. have proposed similar reserve acts, and there are also related proposals at the national level, indicating a clear long-term reserve trend.