Bitcoin's sharp decline triggered $368 million in liquidations within one hour, serving as a starting point for system analysis of the deep logic behind the market’s sudden change. First, from a microstructure perspective, overly crowded long leverage positions triggered algorithmic stop-losses after the price broke key support levels, leading to a stampede-like liquidation. Liquidity exhaustion and market maker withdrawals further amplified the decline. Second, on the macro level, the Federal Reserve's delay in interest rate cut expectations and Trump's tariff policies caused Bitcoin's correlation with the Nasdaq to rise to 0.82. Its safe-haven attributes gave way to high-volatility tech stocks, making them the preferred choice for institutions to sell in exchange for liquidity. Policy-wise, a historic split emerged: China's central bank and eight other departments issued Document No. 42, which for the first time incorporated stablecoins and RWA tokenization into regulation, fully cutting off domestic entities from participating in virtual currency activities and creating a legal firewall; meanwhile, the US advanced the GENIUS Act and promoted the Clarity Act to provide a compliant framework for stablecoins and digital assets, attracting Wall Street capital. This "Eastern blockade, Western acceptance" pattern forced capital to reallocate amid regulatory arbitrage. At the institutional level, Strategy, holding over 710,000 Bitcoin, suffered a quarterly loss of $12.4 billion. Its "debt issuance to buy coins" model became unsustainable due to the stock plunge, and debt pressures may force it to sell Bitcoin, becoming the market’s biggest risk point. Mining companies also had to sell due to falling coin prices, exacerbating supply pressure. Despite extreme short-term fear sentiment, technical indicators show Bitcoin holding above the critical 200-week EMA support, CME smart money reducing short positions, and volatility declining, suggesting a mid-term bottom may form within the next 60 days. Looking ahead, the market will enter a highly differentiated phase: Bitcoin, as a digital scarcity asset, will strengthen its core position under sovereign and institutional allocations; Ethereum faces technical over-inflation pressure; among altcoins, only those with compliant entry points, RWA, and Bitcoin L2 have opportunities. Regarding investment strategies, it is recommended to hold core spot positions, keep cash in tactical positions, and buy the dip in tranches when the panic index hits extreme levels, while hedging tail risks with options. This article emphasizes that the crypto market has thoroughly moved away from wild growth and entered a complex cycle shaped by macro liquidity, institutional debt, and regulatory policies. Investors need to shift their mindset, focus on scarcity, to navigate through bull and bear markets.