Bitcoin is fluctuating at a high level while alts are performing brightly, with policy supporting the mainstreaming of encryption.

This week, the crypto market has shown a high-level fluctuation, with Bitcoin prices fluctuating between $93,500 and $95,500. Some altcoins have performed well, such as those in the SUI ecosystem, Virtual ecosystem, and several AI tokens with significant rises. The overall market is still waiting for key economic data such as unemployment rates and non-farm payrolls to determine its direction.

The regulation and market manipulation in the encryption field are intertwined, presenting a complex situation. The ALPACA incident revealed how market makers manipulate low market cap coin contracts, utilizing short squeezes and funding rate harvesting to exploit retail investors, highlighting the speculative risks in the market. Meanwhile, the U.S. policy stance towards crypto assets is clearly supportive, and the Bitcoin reserve bill passed in Arizona marks an acceleration in the mainstreaming of cryptocurrencies.

The ALPACA incident reflects the trading strategy of the manipulators: first, they control the market and stabilize the price to complete the contract delivery, then they attract short sellers by crashing the price, subsequently raise it for a reverse harvest, and finally gradually sell off after the delivery. In this process, the "air force" becomes the "fuel" that drives the price rise, as their negative funding rates provide additional capital for the bulls.

Binance has shortened the funding rate settlement period to 1 hour, further increasing the pressure on shorts and accelerating the process of short squeezes. This change has sped up the market operation rhythm, with the periods for pump and dump clearly shortened.

For investors, attention can be paid to low market cap ( alts, such as those below 100 million USD ), in conjunction with indicators like open interest ( OI ) and funding rate ( Funding Rate ) to assess potential whale operations. However, it should be noted that under the new settlement mechanism, the market reacts more swiftly, requiring investors to make quicker decisions.

In terms of policy regulation, the SEC has approved the listing of three XRP futures ETFs from ProShares, but not the spot ETFs that the market was expecting. The SEC has also postponed the approval decisions for several spot crypto market ETFs, which are expected to be reviewed by June 2025. Market analysts are optimistic about the approval of various crypto market ETFs.

The "Strategic Bitcoin Reserve Act" passed by Arizona allows the state treasury and pension systems to invest up to 10% of their funds in Bitcoin and proposes the establishment of a digital asset strategic reserve fund. This marks a transformation of cryptocurrency into a mainstream financial asset and may trigger other states to follow suit. However, the bill still faces the possibility of a gubernatorial veto.

Regardless of whether the Arizona bill ultimately passes, states across the U.S. are actively promoting Bitcoin reserve legislation. Currently, 28 states have proposed 47 related bills, with 18 entering the legislative process. At the federal level, there is also a proposal being discussed for the U.S. Treasury to purchase 1 million Bitcoins as a strategic reserve within five years. Although it may be difficult to see substantial progress in the short term, the trend of Bitcoin reserves has already formed, and we can expect to see the actual implementation of related bills in the next two years.