War is the art of deception: from the October flash crash to the February panic

Cryptocurrency Market Observation

Yesterday during a live broadcast, a veteran who has held Bitcoin since 2014 sold two Bitcoins upon hearing the news of a zeroing event! Haha, although it wasn’t mine, I felt a little pain. It shows that smoke screens can be very intense! Why does a market that seems to want to trap you make you feel happy and comfortable? Why does a market that can make you big money first cause you to collapse?

On October 10, 2025, the cryptocurrency market experienced the largest flash crash in history, with $19.3 billion evaporating into nothingness, and 1.66 million investors being swept out. Just four months later, in February 2026, Bitcoin fell below the $60,000 psychological threshold. The once “Bitcoin die-hard” Michael Saylor first mentioned that “selling Bitcoin is also an option.”

On the surface, these are two declines driven by different reasons. But from a strategic perspective, they form the most classic dialectic of “deceptive tactics” in market warfare—bad news hiding the seeds of reversal, good news concealing traps for harvest.

1. October 2025 Flash Crash: Building the Bridge, Crossing the River in Secret

🔥🔥🔥 I rarely look at news, so the only answer I rely on is the candlestick chart pattern—get out quickly!

The apparent trigger for that plunge was Trump announcing tariffs on China. But a deeper analysis suggests it was more like a carefully planned “ambush.” After the crash, the truth surfaced: Binance had previously launched aggressive promotions offering 12% annualized returns on USDe and allowing it as collateral, creating a dangerous leverage cycle. When market volatility hit, a series of liquidations followed.

More ironically, just before the crash, Deutsche Bank released a bullish report predicting Bitcoin could become a central bank reserve asset by 2030. This was a typical “sugar-coated shell”—attracting funds with optimistic expectations to gather ammunition for the subsequent “crossing the river in secret.”

However, after the crash, the market instead saw a series of positive signals: Bitcoin spot ETFs accumulated net inflows of $4.21 billion that month, the first batch of altcoin ETFs officially launched in the US, and the Federal Reserve cut interest rates by 25 basis points. By the end of October, Bitcoin had rebounded to around $115,000. The October flash crash precisely cleared excessive leverage in the market, creating space for subsequent rises.

2. February 2026, the $60,000 Threshold: Under the Bombardment of Bad News, Hidden Currents Surge

🔥🔥🔥 Starting from January, I told everyone that the February turning point would be a phased build-up of long positions. (To be verified again at year’s end)

The negative news in early February was a “saturation-level attack”: China’s eight government departments issued the strictest virtual currency ban, Strategy reported a quarterly loss of $12.4 billion and its founder considered selling coins, mining companies sold Bitcoin to “delever,” and large addresses sold about 81,000 BTC within eight days. Media declared the “myth of digital gold shattered.”

Just as the market was pessimistic, another force quietly moved. On February 13, the US Treasury Secretary said the “Digital Asset Market Clarity Act” might pass in spring, followed by a constructive closed-door meeting between the White House and industry on stablecoin legislation. While retail investors panicked and sold off, long-term holders were quietly placing dense buy orders at low prices, waiting for panic-driven chips to flow in.

Looking at these two events together, it’s a clear example of strategic deception: October’s visible panic crash was actually driven by leverage liquidations and institutional harvesting, followed by ETF inflows and price rebounds; February’s visible shock was regulatory crackdown and crisis among giants, but behind the scenes, policy expectations were quietly brewing, and accumulation at low levels was underway, leading to legislative progress and price recovery.

After the October flash crash, retail investors fled in fear, but institutions quietly increased their positions; during the February negative bombardment, Strategy continued to accumulate at an average price of about $78,000.

When negative news is overwhelming, positive signals are often not far behind; when everyone is bullish, risks are approaching!