Gate on-chain observation ( on October 16, ): The US government seized another $2.4 billion in Bitcoin; Paxos quickly destroyed 300 trillion PYUSD after mistakenly issuing them.

In the past 24 hours, the crypto market has seen landmark events on both macro and micro levels. The U.S. government has launched a new round of Bitcoin seizures worth $2.4 billion against Prince Group, which, along with the Whale LuBian's transfer of $1.34 billion BTC, has created significant selling pressure expectations on a macro level. Internally, the Bull vs Bear Battle has intensified: on one hand, top short positions, represented by Abraxas Capital, are partially taking profit, indicating short-term risk release; on the other hand, several institutional whales are re-accumulating ETH around $4,000, while precise short-term traders are frequently capturing swing trading opportunities, making substantial profits intraday. Overall market sentiment remains cautious, with funds rapidly rotating between mainstream assets and high-risk alts, and investors need to closely monitor the defense of key support levels.

1. BTC Market Dynamics and Analysis

The macro level and the movements of on-chain Whales dominated today's BTC market.

· Macro and Institutional Flows: Government Whales Apply Pressure

The U.S. government, in the Prince Group case, has once again transferred Bitcoin worth $2.4 billion from associated wallets, following the previous disclosure of the seizure of 127,271 Bitcoins. This is likely an unannounced additional seizure action. Meanwhile, a whale address that has been dormant for 3 years, LuBian.com, transferred 11,885 BTC (worth $1.34 billion). Earlier reports indicated that the U.S. Department of Justice plans to reclaim the 127,271 Bitcoins related to the LuBian hacker incident and has linked it to the Prince Group, which is suspected of global cybercrime and forced labor scams. This potential selling pressure significantly suppresses market sentiment.

· Bull vs Bear Battle: Top short positions take profit, short-term experts frequently emerge

Despite macroeconomic pressures, the internal market battles are fierce. The well-known short-selling institution Abraxas Capital has begun to reduce its ETH short positions, realizing a profit of $245 million in the past 7 days. Its main address's ETH short position is currently still in a loss state, and this reduction may be aimed at locking in profits. On the other hand, short-term trading has performed remarkably: an address suspected to be a “BTC OG” has closed 310 coins of BTC short positions, quickly taking profits; another Whale that opened $140 million in BTC shorts yesterday has also closed positions for a profit of $2.683 million. These short-term operations have a 100% win rate, with an average holding period of only a few hours, showing extremely high market sensitivity.

2. ETH Market Dynamics and Analysis

The Ethereum market presents a complex situation where institutional accumulation and high leverage battles coexist.

· Whale Behavior Focus: Institutions Buy on Dips, Celebrities Reduce Losses

After clearing profits of $93.74 million at the beginning of the month, a certain institutional whale bought back 10,000 ETH through OTC at an average price of $3,987, indicating optimism about the medium to long-term value of ETH. However, the address of “Brother Maji” Huang Licheng reduced his position by 1,590 ETH after incurring a loss of $246,000, and currently only has 585 ETH left. His high-leverage long positions have a liquidation price of $3,678, which poses a high risk.

· Ecosystem and Network Activity: PYUSD is experiencing unusual volatility

The stablecoin PYUSD experienced unusual operations this morning, with the issuer Paxos completing the minting and burning of 300 trillion PYUSD within 30 minutes. This abnormal activity led the DeFi protocol Aave to temporarily freeze PYUSD trading. Although it did not directly impact market prices, it exposed the operational risk hazards associated with centralized stablecoins.

3. Other Altcoin Market Dynamics and Analysis

The altcoin market is experiencing significant capital rotation, with smart money seeking opportunities between Meme coins and mainstream DeFi assets.

· DeFi and RWA sectors: LINK sees large accumulation

Chainlink has become the focus today, with two newly created wallets withdrawing a total of nearly 1.45 million LINK from CEX, with a total value of about 26.25 million USD. Such a large-scale unified action may indicate that whales or institutions are optimistic about this asset.

· Meme coins and specific projects: High win rate short positions targeting Aster

The meme coin sector has seen a typical Bull vs Bear Battle case. A whale with a total holding of $98 million precisely established a short position of over 7.4 million coins using 3x leverage before the Aster drop, currently realizing an unrealized profit of $1.76 million, with a return rate exceeding 50%. In contrast, a certain whale address heavily invested in Chinese meme coins at high levels, accumulating an unrealized loss of $3.167 million, with the principal shrinking by 56.5%, highlighting the extremely high risk in this sector.

4. Market Overview and Trend Analysis

Overview

Today, the market is being pulled by two forces: “macro sell pressure” and “internal resilience.” The asset movements of the U.S. government and the sleeping Whale hang over the market like the sword of Damocles, while smart institutions and traders on-chain respond with flexible swing trading and accumulation during dips. The overall market pattern leans towards caution, but there has not been a panic sell-off.

Trend Analysis

In the next 1-3 trading days, the $110,000 of BTC and $3,950 of ETH will become key support levels. If these levels are lost, it may trigger the liquidation of high-leverage long positions and accelerate the downward movement. Notably, a Whale has already placed nearly $10 million in limit buy orders, preparing to bottom out at positions such as $3,750 - $3,835 for ETH and $184.75 - $185.4 for SOL. In terms of capital rotation, the accumulation of Whales in LINK and the violent fluctuations of Meme coins indicate that market risk preferences are diverging, with capital shifting from purely sentiment-driven assets to fundamental DeFi assets.

V. Conclusion

On-chain is a arena of desire and rationality. Today, we witnessed the iron fist of the state machinery, the awakening of ancient Whales, the precise hunting of smart money, and the quiet sorrow of adventurers. The market eternally repeats a similar script during cycles, with only the actors and chips changing. When the government can easily confiscate assets, when every on-chain transfer is exposed to analytical tools, true anonymity has become an illusion. In this world where transparency is infinitely magnified by technology, the first rule of survival may be to always maintain reverence for the market.