Author: Shouyi, Biteye content team
This is the hardest year in the cryptocurrency world: Bitcoin keeps falling, contract liquidations are constant, no one in the group sends red envelopes, and the collective has shifted from "buying the dip" to "playing dead".
This time's decline is not a simple technical correction, but rather a simultaneous explosion of multiple pressures: global regulatory tightening, escalation of geopolitical conflicts, industry leaders withdrawing, and the collapse of retail investor confidence. Four forces are strangling, unfolding the "siege of the Bright Summit" in the crypto world.
However, after carefully breaking down these ten negative factors, it can be found that many "bad things" are actually a necessary path for industry maturity. Below, Biteye will analyze each point for you, and after reading, you will know how to respond.
1. Iron Curtain of Regulation: Stablecoins, Taxes, and Platform Oversight
1. Interest on stablecoin deposits will be cut off
https://x.com/CryptosR_Us/status/2021523353769480336
In the context of the legislative deadlock of the Clarity for Payment Stablecoins Act in the United States, the American Bankers Association (ABA) and major systemically important banks (SIBs) are lobbying regulators to prohibit issuers of stablecoins and intermediary platforms from paying interest to users, with violating institutions facing a daily administrative penalty of up to $500,000.
Short-term impact: The attractiveness of stablecoins will definitely decline, coupled with the weakening of the dollar, some total value locked (TVL) will flow elsewhere;
Long-term impact: Complete prohibition is unrealistic, and the most likely outcome is a compromise plan of "limited rewards". It is expected that policies will be implemented in the second quarter, and the market will gradually digest this expectation over the next 3-6 months.
2. The global tax net has arrived
https://x.com/Foresight_News/status/2010935974742937622
The framework for the reporting of crypto assets led by the Organization for Economic Co-operation and Development (OECD) has formally come into effect in 48 jurisdictions (including 27 EU countries, the UK, Japan, South Korea, etc.), requiring exchanges to automatically exchange users' cross-border transaction data, with the US simultaneously activating the 1099-DA form.
Short-term impact: Compliance costs increase significantly, triggering panic selling among retail investors;
Long-term impact: Tax transparency is a precondition for traditional institutions to enter the market. It is expected that once fully implemented in 2026, trillion-dollar institutional capital may truly enter the market; for now, it is just a period of growing pains.
3. Even the X platform has begun to restrict advertising qualifications
https://x.com/nikitabier/status/2025337476391608540
The X platform updated its advertising policy for prediction markets, requiring all promotional content to be disclosed, which effectively raises the customer acquisition costs for project parties.
Short-term impact: Marketing on X has completely cooled down, with basically no promotional activity able to proceed;
Long-term impact: Good money drives out bad money, which helps to rebuild industry credibility. However, to be frank, there aren't many serious projects still advertising on X; this regulation holds more symbolic meaning, and it depends on how it is implemented.
2. Geopolitical Strangulation: War, Tariffs, and Diplomatic Relations
4. The Middle East ignites, funds flee to safety
https://x.com/StateDept/status/2026518216600858881
Trump's extreme pressure on Iran, proclaiming "small fights followed by big fights", has escalated risk-averse sentiment, pushing the dollar index (DXY) to soar to 97.7, with 10-year US Treasury yields rising and Brent crude oil surpassing $65/barrel. The global uncertainty index (Economic Policy Uncertainty Index) has reached an all-time high since records began, with funds rushing into traditional safe-haven assets.
Short-term impact: Liquidity in the crypto market has been instantly drained, with the most obvious effect being the disappearance of USDT premiums, which have instead become discounted;
Long-term impact: Geopolitical shocks often come quickly and go just as fast; based on historical patterns, suppressed buying usually rebounds fiercely after 1-2 months. Exiting positions for USD now will likely mean selling at the lowest point.
5. Trump's 15% tariff hammer hits
https://x.com/baldwin_daniel_/status/2025246781592773073
After the Supreme Court rejected related relief requests, the Trump administration, under the Trade Act of 1974, raised the global benchmark tariff from 10% to 15% for 150 days starting February 24. This policy transmits through the chain of "tariffs → inflation expectations → dollar strengthening", hitting the cryptocurrency market as a high Beta risk asset first.
Short-term impact: Negative shocks typically peak shortly after the policy takes effect; referring to the tariff war last April, if subsequent negotiations between major powers break the ice, the market will rapidly turn favorable after any pressures are lifted;
Long-term impact: Trump is accustomed to extreme pressure before negotiations, and TACO has become a classic mode of operation, it is unlikely to implement tariffs for the full 150 days.
6. The market is waiting for the "diplomatic relations" between China and the US
https://x.com/AJEnglish/status/2025111127110418517
The Trump administration announced plans to visit China from March 31 to April 2, but before that, it may implement "extreme pressure before negotiations" through tariff escalations and technology blockades; this is a typical game theory strategy. The market needs to continue trading under policy suspense until the end of March.
Short-term impact: This negative factor is artificially amplifying volatility; the market will continue to be shrouded in policy gloom;
Long-term impact: If negotiations make substantial progress, global risk assets will welcome a liquidity release window. It is expected that once the results of the talks at the end of March become clear, this negative news will be digested, but before that, there exists "uncertainty," and market volatility may increase.
3. Internal Bloodletting: Liquidation, Selling Coins, and Withdrawal
7. Wu Jihan liquidated BTC, fully transitioned to AI
https://x.com/CupidMonday/status/2025956106833449279
Wu Jihan's Bitmain recently liquidated about 1,132 BTC (valued at about $72 million) and announced a comprehensive transition to AI data center (AIDC) business. The company's IR statement emphasized that this is a "non-permanent zero position," essentially for managing the balance sheet in response to the pressure from mining machine iterations (4nm/3nm chip upgrades) and capital expenditure needs for AI computing infrastructure.
Short-term impact: The panic of "miner sell-off" further amplifies. After all, if even the big miners are selling, why should retail investors hold on?
Long-term impact: The integration of AI and crypto computing power is a trend of industrial upgrade and not a systemic crisis of the industry. It is expected that once the AI data center is built, funds will flow back into the crypto market.
8. Vitalik continues to sell ETH, prices drop further
https://x.com/DeFiTracer/status/2018698179277963356
Ethereum co-founder Vitalik Buterin has been continuously reducing his ETH holdings through a multi-signature address, selling 1,869 ETH in two days, totaling over 7,000 ETH (about $15.5 million). The official statement confirms that the funds are used to support long-term investments in the Ethereum Foundation's research and biotechnology fields. Compared to his holdings of about $430 million, the reduction ratio is less than 0.36%.
Short-term impact: In the current weak market, Vitalik's actions precisely strike the confidence of ETH bulls, forming a vicious cycle of "the more you sell, the lower it goes, the lower it goes, the more you sell". Many on X are starting to question whether Vitalik is pessimistic about ETH, and this sentiment contagion is terrible;
Long-term impact: The founder's cashing out to support the ecosystem is a normal operation, just the timing is very unfortunate.
9. Influencers collectively calling it a day, smart money exits
https://x.com/dotyyds1234/status/2026097439850303512
Community high-influence traders KOL represented by "Han Ba Long Wang" publicly announced a 30%-50% reduction in on-site positions and released bearish remarks. In a thin market environment, such voices are amplified through social media, forming sentiment contagion. Now some in the group are starting to show empty position screenshots, indicating clear signs of herd mentality.
Short-term impact: On-chain traders and bearish remarks have a significant impact on the market;
Long-term impact: When "smart money" recognized by the market collectively exits dramatically, it usually constitutes an excellent contrarian bottom signal. Of course, whether this time is an exception, no one can be certain. Some KOLs may delete posts later and turn bullish; you can use the @xhunt_ai plugin to check deleted post records.
4. Emotional Nuclear Explosion: "Bitcoin is dead", Decoupling, and Trust Crisis
10. FUD explodes in full force, "Bitcoin is dead" trending everywhere
https://x.com/XHuntCN/status/2025963293920342134
Google Trends data shows search volume for "Bitcoin is dead" reached a peak since the 2022 FTX collapse; the USD1 stablecoin briefly decoupled to 0.98 USDT due to FUD; on-chain detective ZachXBT announced it would disclose insider trading evidence of the "most profitable companies in the crypto industry" on February 26.
Short-term impact: In such an environment, trust mechanisms have suffered a serious blow, triggering indiscriminate selling;
Long-term impact: The peak search volume for "BTC is dead" is often the strongest signal of a market bottom - it was so in 2018 and 2022. It is expected that ZachXBT's exposure will trigger risk aversion to flee in the short term, but in the long term, it is beneficial for the industry to clear out toxins and give birth to new life.
5. Technical Indicators: Indeed bleak, but might be nearing bottom
Looking at the data, it is indeed bleak. Three core indicators (BTC oversold index, ahr999 bottom-fishing index, extreme fear index) are close to historical extreme levels. The indicators suggest that the current market's level of overselling has approached historic limits, but has not broken the longest record; fluctuating near the bottom may continue for another 1-2 months.
Optimistically, historical data shows that "new life often emerges from despair," and after moving out of these extreme indicators, BTC's 90-day return average is over +50%. Coupled with Trump's visit to China at the end of March, the earliest reversal window may open in March.
Pessimistically, if Trump's visit to China breaks down at the end of March, or if ZachXBT indeed reveals shocking news (such as verification of Tether reserve fraud), all of the above "bottom signals" may fail. Users are advised to decisively eliminate leverage in the short term and closely monitor ZachXBT's revelations and the progress of Trump's visit to China.
Market Suggestions: Surviving is more important than calculating profits
Looking back at the recent ten major negative factors, 60% come from regulation and geopolitics, while 40% come from internal selling pressure and emotional collapse. It seems to be all negative, but after careful calculation, about 70% of the negativity will turn into positivity in the medium to long term - the iron curtain of regulation is building a compliance moat for traditional funds, and low emotions are often the darkest night before dawn.
The "bottom fishing" and "shorting" on Twitter are more about sentiment; when the bottom truly arrives, the group should be in complete silence, rather than debating "whether it's the bottom" as it is now.
"The siege of the Bright Summit" is not the endgame of crypto - compared to how much profit there is, the most important thing is to always be at the table.
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