OVERVIEW

Reset First Rally Later ⏪️

Before we dive in, here’s today’s crypto market heatmap:

And here’s a look at crypto’s total market and altcoin market cap charts:

TECHNICAL ANALYSIS
Open-Interest Reality Check: 30-Day Sizzle 📊

Raw Open Interest (OI) charts shout. They don’t explain. LAR does. It tells you whether fresh exposure is getting absorbed by price or setting up a faceplant. 🙂

The Details

• Open interest - Count of live futures contracts, your leverage meter.

• Window - Aug 9 to Sep 8, 2025.

• Why I built LAR - I wanted one blunt number that blends price change, OI velocity, and actual volatility so we stop guessing whether leverage helps or hurts.

LAR - The Cheat-Code Metric 🧠

• > 5 Smooth Sailing

• 3 - 5 Check Engine

• < 3 Danger Zone

Regimes give direction:

• Absorption Up - price up, OI up

• Short-Cover Rally - price up, OI down

• Levered Selloff - price down, OI up

• Deleveraging Drop - price down, OI down

Context to care about: I ran 30-day windows ending Oct 9 and Oct 12 to bracket the Oct 10 liquidation nuke. Pre versus post tells you who actually cleansed and who just pretended.

$BTC.X ( ▼ 2.42% )

Before Oct 10: LAR 8.1, Absorption Up.

After Oct 10: LAR 1.6, Deleveraging Drop.

Read: That low LAR isn’t bullish or bearish by itself. It says the flush took real risk off without a short pile-on. Let OI rebuild behind higher lows while funding stays boring.

Tilt: Neutral-bearish until the rebuild shows up. Then you can lean risk back in, not before. 🥹 

$ATOM.X ( ▼ 4.66% )

Before: LAR 8.8, Levered Selloff.

After: LAR 17.8, Deleveraging Drop.

Read: This is the kind of reset you want to see before a durable base. Price needs to lead next while OI creeps up second.

Tilt: Cautiously bullish on reclaim setups if OI starts rebuilding after the base forms. Don’t chase the first green candle like a meme-addict. 🙂 

$SOL.X ( ▼ 4.16% )

Before: LAR 6.2, Short Cover Rally.

After: LAR 5.9, Deleveraging Drop.

Read: Strong token, but the regime flipped from squeeze to purge. You want proof of sponsorship next - OI rebuilding with price, not in front of it.

Tilt: Neutral-bearish near resistance. Trade it like momentum with tight risk. If funding spikes on nothing, fade it. 😐️ 

$LINK.X ( ▼ 5.64% )

Before: LAR 2.9, Deleveraging Drop.

After: LAR 5.8, Deleveraging Drop.

Read: The quality of the reset improved. That’s a green flag for base-then-rebuild dynamics. Price leads, OI follows, funding stays sane.

Tilt: Cautiously bullish on break-and-hold setups. Traders who got burned before might be taking profits into and big spikes if perp funding goes nuts. Reload where they panic. 😰 

$ZEC.X ( ▼ 9.8% )

Before: LAR 4.0, Absorption Up.

After: LAR 5.0, Absorption Up.

Read: Leverage is getting digested by price, not choking it. You still respect the speed here - ZEC can move like it’s late for a flight.

Tilt: Bullish while Absorption Up holds. Invalidation is a regime flip into short-cover or levered selloff. 📉 

Why this helps you trade and not cope

• Separates trend from tinder - Absorption Up can carry. Short-cover runs out when shorts do.

• Quantifies the purge - Bigger LAR in down regimes means a cleaner flush. Better bases. Better entries.

• Keeps you honest post-event - After a nuke like Oct 10, you want price to lead and OI to follow. If OI front-runs price again, you’re rebuilding a Jenga tower.

TL;DR: BTC and SOL need sponsorship before you get brave. LINK just upgraded its reset. ATOM printed the kind of purge that breeds real bases. ZEC is still the honey badger of this bunch. 🦡 

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NEWS
Wintermute, Binance, And The $500B Meltdown: Who Really Pulled the Plug?

Wintermute’s official report of the worst liquidation event in crypto history reads like a calm autopsy, but the scene it describes looks more like a controlled detonation. Except the timing, on-chain analytics, - and a $700M transfer - tell another story. Allegedly.💣

The $700M Elephant in the Room

Hours before the crash, Wintermute quietly moved (allgedly) roughly $700 million (mostly BTC) into a Binance hot wallet. Minutes later, order books thinned out and bids vanished across Binance pairs. 🤔 

Traders on X noticed ATOM and SUI free-falling to literal pennies while stop orders froze and only liquidations went through. By the time Binance admitted “intermittent delays,” billions had been flushed.

On-chain analysis claimed the dump was a sort of “controlled reset,” claiming Binance and Wintermute engineered the crash to flush leverage and rebuild cleaner books.

It’s a serious accusation, but the data looks weird: liquidation velocity peaked exactly where that $700M supposedly moved on-chain. Even Binance’s own head of research admitted a “margin system flaw” involving collateral like USDe, wBETH, and BNSOL. 📉 

Binance in the Crosshairs

Binance itself is accused of underreporting liquidation data by as much as 100x, according to Hyperliquid’s co-founder Jeffrey Yan. He pointed out that centralized exchanges compress thousands of liquidation events into a single print - a neat trick for optics.

CZ fired back that only 60% of longs were liquidated on Binance versus 90% on Hyperliquid. 🥊 

Wintermute’s PR Damage Control

Three days after F*cktober 10th, Wintermute’s Tariff Shock Report frames the event as a stress test the market passed. I shit you not. It emphasized liquidity recovery times (normalized within 35 minutes) and on-chain resilience (DEX perps stayed solvent), while sidestepping the $700M question entirely. And Binance.

Like I said in yesterday’s newsletter, it’s going to a little while to shake out what happened and who to point fingers at. 👉️ 

PRESENTED BY STOCKTWITS
Yesterday’s News Today 💬

NEWS
Prince Group Chairman Indicted in $15B Crypto Scam Built on Forced Labor 😠

Chen Zhi, aka “Vincent,” the 37-year-old chairman of Prince Group, stands accused of running what might be the most disturbing crypto fraud empire ever - complete with forced-labor “scam compounds” and billions stolen through pig-butchering schemes. 🐷 

The DOJ also filed its largest-ever crypto forfeiture action, seizing 127,271 Bitcoin worth around $15 billion. That’s billion, with a “B.”

According to the indictment, Zhi’s operation wasn’t some dark-web pop-up (remember when those were the only bad things on the interwebz?). Prince Group, a so-called multinational “business conglomerate,” allegedly ran human trafficking camps where victims were held against their will, forced to run crypto scams, and beaten if they didn’t perform.

Prosecutors say these scams built fake relationships online, gained victims’ trust, then drained their wallets. The DOJ described it as “a cyber-fraud empire built on human suffering,” which might be the understatement of the decade.

The group laundered stolen crypto through complex “spraying” and “funneling” techniques, splitting coins across hundreds of wallets before reconsolidating them. Zhi apparently bragged that his crypto mining profits were “considerable because there is no cost.”

Translation: free labor, stolen money. The operation allegedly spanned 30+ countries, bribed officials, and laundered funds into yachts, jets, and even a Picasso. If convicted, Zhi faces up to 40 years in prison. ⚖️

PRESENTED BY STOCKTWITS
Stonks Fell. Again. 📉 

NEWS
BRIC (Not The BRICS You’re Thinking Of) Bags $299.5M from Tether in Celsius Bankruptcy Settlement 🧱

Tether just cut a $299.5 million check to the Celsius Network bankruptcy estate after a long, ugly fight in court. 🧑‍⚖️ 

The Blockchain Recovery Investment Consortium (BRIC) - a tag team between GXD Labs (Atlas Grove Partners affiliate) and $161.7B asset manager VanEck - announced the deal this morning.

It wraps up a lawsuit filed back in August 2024 accusing Tether of shady collateral transfers and liquidations in the chaotic months before Celsius cratered. 💸

David Proman, GXD Labs managing partner, said the resolution came together faster than expected, which might be the nicest thing anyone’s ever said about a bankruptcy court timeline.

They’re still cleaning up what’s left of Celsius’s illiquid and litigation assets, doing the slow, unglamorous work of squeezing blood from the stone. The roster includes a ‘Who’s Who’ of the “we’ll get your money back, eventually” industry. ⚖️

LINKS
Links That Don’t Suck 🔗

🫂 S&P Global Ratings and Chainlink collaboration brings S&P's Stablecoin Stability Assessments on-chain

🪨 BlackRock developing in-house technology for asset tokenization: Larry Fink says ‘We need to be tokenizing all assets’

😐️ Powell speech steadies crypto market: Fed hints at slower balance-sheet runoff

🇬🇧 IMF forecasts UK as second-fastest-growing G7 economy

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Author Disclosure: The author of this newsletter holds positions in ADA, IMX, COPI, MIN, AGIX, ALGO, ZEC, XLM, and NEAR. 📋