Encryption speculation and regulation run parallel; US policy promotes Bitcoin mainstreaming.

This week, the crypto market is showing a high-level fluctuation trend, with Bitcoin prices fluctuating between $93,500 and $95,500. Some alts such as the SUI ecosystem, Virtual ecosystem, and AI Tokens are performing remarkably well. The market as a whole is waiting for key economic data this week, such as unemployment rates and non-farm payroll data, to determine the subsequent direction.

Regulation and market manipulation in the encryption field are intertwined, presenting a complex situation. The ALPACA incident reveals the phenomenon of low market value Token contracts being manipulated, showcasing the risks of market speculation by squeezing shorts and harvesting funding rates from retail investors. At the same time, the U.S. policy level holds a supportive attitude towards crypto assets, with Arizona's Bitcoin Reserve Act marking a significant step towards the mainstreaming of cryptocurrencies.

The ALPACA incident reflects the typical operation techniques of market makers: by controlling the market to raise contract prices for delivery profits, inducing shorts to enter the market, and then raising the prices again to complete the harvesting, and finally dumping the market to cash out the remaining value after delivery. In this process, shorts become the "fuel" that pushes up prices, as the funding rates they pay provide extra capital for longs.

Binance has shortened the funding rate settlement period to 1 hour, further increasing short pressure and accelerating the short squeeze process. This change requires investors to react more quickly, and they may need to rely on automated tools to monitor market data.

In terms of regulation, the SEC has postponed the approval decisions for several spot cryptocurrency ETFs, but the industry remains optimistic about final approvals. The Bitcoin Reserve Bill passed in Arizona allows public funds to be invested in Bitcoin, reflecting the trend of cryptocurrency transitioning to mainstream financial assets. Although the bill faces the possibility of being vetoed by the governor, the trend of advancing similar policies at both state and federal levels in the United States has already emerged.

Overall, the crypto market is seeking a balance between speculation and regulation, and the gradual improvement of the policy environment is driving crypto assets towards broader acceptance and application.