Here is the English translation of the text, with the specified terms translated as requested: On the morning of February 28, 2025 Beijing time, the price of Bitcoin (BTC) broke through the psychological barrier of $80,000, hitting a low of $78,258, a drop of over 5.7% in just 24 hours, marking the largest single-day decline since November 2024. This crash not only shook market confidence, but also led to a $1.87 billion liquidation across the crypto market, with long positions accounting for as much as 83%. However, what is more worrying to the market is the resurgence of the long-standing "6.6K Liquidation Price" topic. Many investors are concerned that if Bitcoin continues to decline, will it trigger a larger chain reaction, even leading to a sell-off by institutional funds? In this article, we will delve into the underlying factors behind Bitcoin's latest decline, the truth about the "6.6K Liquidation Price", and whether the market is nearing a bottom. I. Reasons for the Crash: Liquidity Stampede and Macroeconomic Headwinds The Bitcoin plunge was not without warning, but was influenced by multiple factors, forming a "perfect storm": 1. Burst of Leverage Bubble: Technical Breakdown - The "liquidity vacuum" above $80,000 was breached: Kaiko's monitoring data shows that this range had accumulated $7.4 billion in open interest of options contracts. When the price fell below $80,000, stop-loss orders were triggered in succession, forming a "chain liquidation effect" and exacerbating the selling pressure. - Bitfinex's leverage was extremely high: Before the crash, the BTC perpetual contract funding rate reached 0.12% per day (annualized 43.8%), leading to large-scale unwinding of arbitrage positions. - Miners' selling pressure increased sharply: F2pool data shows that after Bitcoin fell below $80,000, over 50% of mining rigs reached the shutdown price, forcing an additional 900 BTC to be sold daily, further increasing the downward pressure. 2. Deteriorating Macroeconomic Environment: Tightening US Dollar Liquidity - Federal Reserve's Monetary Policy Tightening: As of January 2025, the Federal Reserve has maintained the federal funds rate at 4.5%. Previously, the Fed had cut rates three times in 2024, each by 25 basis points, but paused the rate cuts in early 2025. - Slowing US Economic Growth: In Q4 2024, the US real GDP annualized growth rate was 2.3%, lower than the previous quarter's 3.1%. The full-year economic growth rate was 2.8%, slightly lower than 2023's 2.9%. 3. CME Futures Gap: Repeating History? Notably, Bitcoin prices often tend to fill the "gaps" formed on the CME (Chicago Mercantile Exchange) Bitcoin futures market during weekends or other market closures. Historical experience shows that Bitcoin often fills these gaps. For example, in November 2021, Bitcoin quickly fell from above $60,000 to around $55,000, filling the gap on the CME chart between $57,000 and $59,000. If the price continues to decline, Bitcoin may fill the potential gap between $70,000 and $72,000, possibly due to high leverage liquidation and market panic. However, history also shows that filling the gap is often accompanied by stabilization, so investors may want to closely monitor this dynamic. 4. Hedge Fund Arbitrage Unwinding: A Hidden Selling Pressure Engine The Matrix on Target report reveals the structural risks hidden in Bitcoin ETF inflows: - Arbitrage Capital Proportion: At least 25% (about $9.75 billion) of the $39 billion ETF funds come from hedge funds' "spot-futures" arbitrage strategy, and some model estimates suggest the proportion may reach 55%. - Operating Mechanism: Hedge funds short perpetual contracts (when funding rates are negative) while buying ETF spot, earning a daily average spread of 0.03%-0.15%. - Strategy Reversal: After the December 2024 FOMC meeting, the average funding rate plummeted from 0.12% to 0.02%, causing the annualized yield to drop from 43.8% to 7.3%, triggering large-scale unwinding. II. Is MicroStrategy's 6.6K "Liquidation Price" a Myth? MicroStrategy (now Strategy) has drawn market attention due to its massive BTC holdings, and the rumor of a $66,000 "liquidation price" is not entirely accurate. 1. Strategy's Actual BTC Holdings First, the "6.6K Liquidation Price" assumption has obvious flaws. Strategy's Bitcoin holdings were not accumulated through high-risk leveraged financing. According to its public financial reports, the company mainly purchased Bitcoin through stock issuance (cumulative fundraising of $18.8 billion) and fixed-income instruments (such as convertible bonds), rather than relying on traditional collateralized loans. This means that even if the price falls below $66,000, Strategy will not face immediate liquidation - unless the creditors explicitly demand repayment in Bitcoin, but there is currently no indication of this risk being imminent. Second, the management's long-term belief in Bitcoin is as solid as a rock. Michael Saylor has clearly stated that Strategy is positioned as a "Bitcoin financial company" with the goal of achieving a 15% Bitcoin yield and $10 billion in earnings by 2025. This strategic vision suggests that they are more inclined to view short-term volatility as an interlude in their long-term plan, rather than a fatal threat. Furthermore, CFO Andrew Kang revealed that starting in Q1 2025, the company will adopt a new accounting standard that allows Bitcoin to be measured at fair value, no longer requiring impairment losses. This adjustment significantly reduces the impact of price declines on the financial statements, further undermining the credibility of the "liquidation" rumors.

In the trading of crypto derivatives, "liquidation" usually refers to the forced closure of a leveraged position when the price reaches the liquidation price. However, Strategy holds actual spot Bits, without the liquidation mechanism of leveraged trading. Therefore, even if the price falls below $66,000, it will not automatically trigger a "liquidation", and the impact will be more reflected in accounting losses rather than a direct rupture of the capital chain. Of course, if the Bit price remains depressed and hovers below $66,000 for a long time, Strategy may face indirect pressure - the stock price may further decline (it has already fallen significantly from the high last year), investor confidence may be shaken, and even the future financing capacity may be affected. But these are the results of the interweaving of market sentiment and external environment, rather than the "liquidation crisis" directly triggered by the single price point of $66,000. Fundamentally, this so-called "liquidation price" is more like a label under panic, rather than a conclusion based on facts.

III. Investor Strategy: How to Deal with Violent Fluctuations?

Reduce leverage: Reduce the leverage ratio of perpetual contracts to below 5 times to avoid Gamma squeeze liquidation risk.

Dollar-cost averaging: When the Bit price is below the 200-day moving average ($82,100 currently), you can buy in batches.

Hedge risks: Buy a 3% position of $65,000 put options (expiring in June 2025), with an annualized premium cost of about 8.7%.

Conclusion: Light in the Darkness?

History has proven many times that each deep dive of Bit is to accumulate strength for the next round of surge. After the plunge to $3,800 in March 2020, Bit ushered in a 20-fold bull market. If history repeats itself, today's $78,000 may be standing at the starting point of a new cycle.