🚨 Emergency Special: Strategy Under Water & A Crypto Bloodbath

The moment many traders feared has arrived. Over the past weekend, crypto markets experienced one of the sharpest drawdowns of this cycle — and the implications go far beyond a simple correction. What we are witnessing is not just volatility, but a leverage unwind, a liquidity shock, and a potential regime shift in global monetary conditions.

Below is a structured, clear, and readable breakdown of what happened, why it matters, and what to watch next.

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📉 What Happened So Far

Bitcoin suddenly collapsed from $84,000 to a weekend low of $75,500.
Since then, the price has clawed back slightly to around $78,800, but confidence has clearly been damaged.

Key facts from the crash:

• $2.5 billion in liquidations in just 24 hours
• Strategy’s average BTC purchase price ($76,037) was briefly breached
• Gold fell 11% and silver 31% — the worst precious metals day since 1980
• Trading volume surged +402% compared to the previous week
• Social media dominance of Bitcoin reached 69% — everyone was talking about the crash
• Some blame has been directed at incoming Fed chair Kevin Warsh

This was not a random move — it was a systemic leverage event.

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🔥 The Strategy (MSTR) Problem — Myth vs Reality

A dangerous narrative is currently spreading online: the idea that Michael Saylor could face liquidation. This is false.

Here are the facts:

• Strategy holds 712,647 BTC
• Average entry price: $76,037 per BTC
• That represents over 3% of the total Bitcoin supply
• These coins are unencumbered — they are NOT collateral
• No margin call is possible. No liquidation price exists.

However, there is a serious problem.

Saylor’s famous “Bitcoin flywheel” is broken:

1. Issue shares
2. Buy Bitcoin
3. Bitcoin rises
4. Strategy’s premium expands
5. Issue more shares
6. Repeat

Right now, Strategy’s market-to-net-asset-value (mNAV) is around 1.14 — dangerously close to parity. Without a premium, the model stops working.

On February 5th, Strategy will release Q4 earnings. They will likely look ugly — not because the company is insolvent, but because Wall Street will see the model under real stress for the first time.

Strategy carries:

• $8+ billion in convertible debt
• $8.36 billion in preferred stock dividends

These obligations continue regardless of Bitcoin’s price.

Bottom line:

• Saylor cannot be forced to sell.
• But if Bitcoin stays below $76K for long, he may no longer be able to buy aggressively either.

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🏦 The Man Who May Change Everything: Kevin Warsh

Kevin Warsh is expected to replace Jerome Powell as Fed Chair in May.

While markets fantasize about rate cuts, Warsh has already made his stance clear:

He wants to aggressively shrink the Fed’s $6.6 trillion balance sheet, meaning:

• Less liquidity
• Tighter financial conditions
• A harder environment for risk assets — including Bitcoin

Back in 2011, Warsh was the only Fed governor who voted against QE2, calling it a “misallocation of capital that would eventually come back with force.”

That moment may be arriving now.

Interestingly, Warsh once called Bitcoin “the new gold for people under 40.” He is not anti-Bitcoin — but he is anti-excess liquidity, and Bitcoin has historically thrived in easy-money environments.

Since June 2025, Bitcoin has behaved strangely against liquidity — suggesting markets may already be pricing in this new regime.

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💥 How the Liquidations Unfolded

The Kobeissi Letter summarized it perfectly: the crash was all about leverage.

Three waves hit in just 12 hours:

1. Overleveraged longs were wiped out
2. Confident shorts piled in — then got squeezed
3. A second layer of longs was blown up

Result: $100 billion in market cap vanished in five hours.

Cathie Wood estimates $28 billion of deleveraging since October — and this may not be over.

As long as retail traders use 10x to 50x leverage, these wipeouts will keep happening.

Uncomfortable truth:

The market doesn’t need direction — it just needs your stop losses.

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⚔️ Key Support Levels to Watch

🟢 $78,000 — Short-term support
A psychological level. Holding here keeps hope alive.

🟢 $76,037 — Strategy’s average price (THE LINE)
The most important level in the market right now.
Three daily closes below this = bear market signal.

🟢 $75,500 — Weekend low
Must hold for any bullish scenario.

🟢 $74,000 — April 2025 low (“Liberation Day”)
Structural support from earlier in the year.

🟢 $59,000 — Worst-case forecast (Kalshi traders)
Would represent a full correction of the rally.

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🔴 Key Resistance Levels

🔴 $80,000 — First major hurdle
Strong selling pressure appeared here.

🔴 $84,000 — Pre-crash level
Where the entire selloff began.

🔴 $87,000 — Personal capital preservation trigger
Below this, caution is warranted.

🔴 $90,000–$92,000 — January consolidation range
Now likely heavy resistance.

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🎯 Trading Implication

• Above $76K: cautious capital preservation with selective longs
• Below $76K for 3 daily closes: switch to bear-market mode

The whales got what they wanted over the weekend: liquidity. If you trade with high leverage here, you are not the player — you are the product.

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🤝 How I’m Positioning Myself

• Strengthened grid bots with additional margin
• Closed MSTR/USDT grid bot
• Secured profits from Hyperliquid to protect core positions
• Reduced long exposure, increased short exposure
• Raised cash allocation — liquidity is king in risk-off markets
• Watching daily closes around $76,037 very closely

Key dates ahead:

• February 5: Strategy Q4 earnings
• May: Kevin Warsh replaces Powell
• Every day: watch Bitcoin relative to $76K

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Final Question

The debate is not whether Saylor will be “liquidated.”
The real question is:

Will $76,000 hold — or are we entering a new chapter of this cycle?

Stay disciplined. Protect capital. And remember: markets test your psychology before your strategy.

Posted Using INLEO