Tracking Extreme Market Conditions (Issue 3 · Week 28, 2026)

01Event Overview

On July 2, the crypto market witnessed $370 million worth of liquidations in a single day, primarily due to the cascading margin calls resulting from high leverage. The situation deteriorated further on July 7, with large-scale long-position liquidations driven by BTC and ETH causing 115,000 people to lose their margin positions, with the highest individual liquidation amount exceeding $7.24 million. During the same period, the TAC meme coin plummeted by 90% in just 15 minutes, highlighting the extreme volatility risks faced by tokens with low market capitalization under macroeconomic pressures.

02Course of the incident

• [07-01] SK Hynix’s stock price tumbled sharply, with the related double-long ETF seeing a daily drop of nearly 24% and an overall decline of over 30%. This triggered large-scale stop-losses among highly leveraged long positions on the blockchain, with one address suffering losses of over $4.42 million.
• [07-02] The crypto market witnessed $370 million in liquidations in a single day, primarily due to the cascading margin calls resulting from high leverage, highlighting the severe impact of regulatory uncertainty and macroeconomic volatility on the market.
• [07-03] The Solana-based meme coin ANSEM saw its market value surge by over 300%, reaching a peak of $450 million. On the same day, a senator proposed banning elected officials from issuing meme coins, targeting the substantial profits and potential conflicts of interest of Trump and his family in the crypto sector.
• [07-04] CZ sharing a puzzle image sparked market speculation, causing the market values of two CZ-themed meme coins on the BSC chain to soar, reaching up to $50 million with daily gains of over 250 times before falling sharply afterward.
• [07-06] Binance experienced multiple large-scale USDT transactions within 14 hours, including $500 million in outflows and hundreds of millions in inflows. Strive ASST launched an innovative BTC bond product that eliminates the need for additional margin, ensuring no liquidation risk even if BTC drops to $0.01 and remains there for 18 months.
• [07-07] The market saw large-scale liquidations driven mainly by BTC and ETH, with individual losses exceeding $7.24 million, affecting 115,000 people. Institutional Whales such as Abraxas Capital withdrew approximately $15.9 billion from various platforms in a short period. The TAC meme coin plummeted by 90% in just 15 minutes, trading at only $0.0061 per unit.

03Impact Analysis

04Impact Analysis

05Market Price Perspective

The current price of BTC is $61,905.00, with a 7-day increase of +2.5%. Strategy broke its “never sell crypto” principle by obtaining approval to sell $1.25 billion worth of assets, with the actual volume of sales exceeding $3 billion, marking its transformation into an actively managed hedge fund. This move was aimed at addressing the pressure of paying $1.26 billion in annual dividends on STRC preferred stocks. While it increased short-term selling pressure in the market, it helped balance debts and asset accumulation through optimized cross-exchange trading strategies. The current price of ETH is $1,728.18, showing a 7-day rise of +6.8%. Coinbase, together with 140 other institutions, launched OUSD to compete with USDT, causing Circle’s stock price to plummet by 16%. The intensifying competition in the stablecoin sector indirectly affected expectations regarding the liquidity of the ETH ecosystem.

06Regulatory Response Perspective

On July 3, Trump denied any conflict of interest regarding $140 million in crypto-related earnings, claiming someone else handled those transactions. However, his niece criticized him for abusing his pardons power, raising concerns about political donations within the industry. On July 3 as well, Senator Gillibrand proposed banning elected officials from issuing meme coins, specifically targeting the huge profits made by Trump’s family. On July 7, Trump’s efforts to establish strategic reserves faced obstacles due to doubts about the Treasury Department’s authority; the Commerce Department might take over regulation, while Congress plans to purchase millions of BTC over five years. On July 7, the Digital Chamber opposed a lawsuit filed in New York State, arguing against classifying 390,000 dormant BTCs (worth $234 billion) as lost property, thereby protecting the foundation of digital asset ownership.

07Ecosystem Impact Perspective

On July 7, Pioneer Fund abandoned its stance of resisting crypto and urgently hired a head for digital assets to focus on tokenization, signaling a strategic shift by this major asset management firm. M&A activities in the sector surged by 26 times in just half a year. Rising compliance costs led to the decline of many startups within the ecosystem, as the industry began to follow traditional financial models. On July 7, Vitalik Buterin released a four-year roadmap for Lean Ethereum, covering second-level transaction confirmation and post-quantum security. Institutions now need to assess the risks associated with technological restructuring to determine whether they can pursue a vision of trillion-dollar ETH settlement volumes. On July 7, Ondo introduced a Perp DEX that integrates real-world assets with derivatives, supporting up to 20x leverage for U.S. stock trades, thus reshaping the logic of Wall Street on the blockchain. On July 3, the Ethereum Foundation separated its commercial functions, with giants like Bitmine investing to establish Ethlabs and Ethereum Institutional, creating three key power centers in the industry.

08Key points to watch going forward

1. Scale of Actual Selling Pressure and Execution Pace of Strategy
It is necessary to continuously monitor the actual selling activities carried out under Strategy that exceed the authorized limit of $1.25 billion, with a particular focus on the details of how it uses accounting classifications to exclude $216 million worth of coin sales from this limit. If the actual selling volume from these three major funds approaches or exceeds $3 billion, coupled with increasing pressure from the $1.26 billion annual dividends owed on STRC preferred stocks, it will signal a significant liquidity shock.

2. Interest Conflicts in the Stablecoin Sector and Contract Expiry Timelines
Closely track the extent to which OUSD, launched by Coinbase in partnership with 140 institutions, erodes USDT’s market share, especially regarding whether Circle and Coinbase will renew or terminate their three-year contract. If Circle’s stock price continues to drop sharply due to the loss of clients, or if concerns arise over the transparency of OUSD’s reserves that prompt regulatory scrutiny, it could trigger a crisis of trust in stablecoins.

3. Progress of U.S. Strategic Reserve Legislation and Allocation of Regulatory Powers
Pay attention to the legislative progress regarding proposals to purchase millions of bitcoins within five years, as well as the final decisions on regulatory responsibilities between the Treasury Department and the Commerce Department. If legislation faces obstacles or regulatory duties shift unexpectedly, leading to heightened policy uncertainty, it will affect the timing of institutional allocations. There is also a need to be vigilant against sharp fluctuations in market sentiment caused by ongoing political disputes.

4. Risks of Ethereum’s Technical Overhaul and Compatibility with Institutional Settlements
Assess the timeline for implementing second-level confirmation and post-quantum security features outlined in Vitalik Buterin’s four-year upgrade plan for Lean Ethereum. If the technical overhaul causes network congestion or abnormally high Gas fees, affecting the settlement efficiency of institutions such as Ethlabs, founded with funding from giants like Bitmine, it will undermine ETH’s competitiveness as a trillion-dollar-scale settlement infrastructure.

09Related Reads

1. “140 million in crypto profits deemed legal, yet fierce conflicts erupt within families”
2. “Trump’s Bitcoin reserves face hurdles: Treasury’s authority in doubt, Commerce Department emerges as candidate”
3. “Battle over ownership of 390,000 dormant BTCs: Digital trade associations oppose New York state lawsuit”
4. “Asset management giants rush to hire new leaders: From rejecting crypto to pursuing tokenization”
5. “From calling Bitcoin a scam to considering it essential—just out of fear of China taking the lead”
6. “Senator proposes banning officials from issuing tokens, targeting Trump family’s 140 million in profits”
7. “Annual dividends of 1.26 billion: Strategy breaks its ‘never sell tokens’ rule and initiates monetization”
8. “Secrets behind Strategy’s token sales: The 1.25 billion cap is just the tip of the iceberg”
9. “Vitalik Buterin’s four-year roadmap: Can Ethereum maintain its role in institutional settlements?”
10. “Coinbase teams up with 140 giants to create OUSD; Circle’s stock plummets 16% in the resulting competition”
11. “M&A activities surge 26 times: Crypto’s decade from bedroom code to giant monopolies”
12. “RWA leaders attack Perp DEXs: 20x leverage reshapes Wall Street’s on-chain logic”
13. “Foundations retreat to neutrality—how do giant corporations control the fate of commercialization?”