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The financial market in 2025 is a battlefield, and retail investors have engaged in fierce confrontations with the Wall Street institutional giants with huge capital and savvy strategies with the coordination and speculative enthusiasm of social media.This dynamic is particularly evident in Bitcoin’s so-called “death line” game, the overbought rebound of the S&P 500, and the speculative boom in options and cryptocurrencies, raising a key question: Who will win this tug-of-war?Based on the latest market data, technical analysis and macro trends, this article explores the struggle between retail investors and Wall Street, the significance of key Bitcoin resistance levels, and the broader impact of stocks, commodities and cryptocurrencies in 2025.
Rebellion of retail investors: a force that cannot be ignored
Retail investors have become a powerful force that drives unprecedented market activity.In the options market, retail investors account for two-thirds of the daily options trading volume of the S&P 500, with 70% of the options being call options, a bullish sentiment that has not been seen since the meme stock craze in 2021.This speculative boom reminds of the short squeeze between GameStop and AMC, when retail investors coordinated actions through platforms such as X and Reddit, defeating hedge funds, resulting in heavy short losses.In the cryptocurrency market, Tom Mlen oscillator indicator shows that non-report traders (retail investors) hold large net long positions on micro-bitcoin futures, pushing prices close to the key “death line” resistance level, which triggered an 80% pullback in 2017 and 2021.
The power of retail investors lies in their creation momentum-driven short squeeze.For example, the price of Bitcoin soared to an all-time high of $122,946 in December 2024, driven by retail enthusiasm and inflows of $1.9 billion in institutional ETFs in January 2025, far exceeding the 13,850 BTC mined that month.Retail-driven demand, coupled with corporate adoption (e.g., MicroStrategy holds $450,000 BTC worth $45 billion), suggests that a structural shift could overwhelm Wall Street’s bearish bets.
However, retail investors’ fanaticism is also accompanied by risks.Overbought states, such as Bitcoin’s RSI divergence and the disconnection of the S&P 500 from its 20-day moving average, suggest that the market may be exhausted.Glassnode data shows that retail investors often buy at high points and sell in panic during pullbacks, making them vulnerable to the tactical retreat of Wall Street.
Wall Street’s Counterattack: Patience and the Power of Capital
Wall Street represented by hedge funds and commodity trading consultants (CTAs) are playing a different game.Their net short positions on the Russell 2000 and Bitcoin (according to Subu Trade) reflect the reverse bet on the mean regression.The net position of large speculators as a percentage of open contracts is “extremely negative” on the Russell 2000, a pattern that often heralds a reversal in history.Similarly, hedge funds’ short bets on Bitcoin are expected to have a similar past crash, with Peter Schiff warning that Bitcoin could fall to $65,000 if the Nasdaq enters a bear market.
Wall Street’s strategic advantages are reflected in dark pool transactions, with a $4 billion SPY batch transaction indicating that institutions are repositioning.Ray Dalio’s recent filing shows that he sold his S&P 500 positions in favor of gold and Chinese stocks (such as BABA), indicating a shift to defensive assets amid the backdrop of tariff concerns and rising volatility.VIX (market panic indicator) soared to its highest level since December 2024, indicating that Wall Street is ready for a more volatile market.
However, short positions on Wall Street are also at risk.If Bitcoin breaks through the “death line” (about $120,000-125,000, based on the 2025 high), short cover may trigger a “continuous short squeeze” market, driving further price increases.The S&P 500 hit its third-fastest recovery, up 20% in 2024, and the Nasdaq hit a new high in July 2025 (pushed by Nvidia’s $4 trillion valuation), indicating momentum could challenge bearish bets.Wall Street’s need for lower entry points could force CTAs to buy on the rise, as cash levels are lower than the sell signal from Bank of America.
The Death Line: The Success or Failure of Bitcoin
Bitcoin’s “death line” is the key to the battle between retail investors and Wall Street.This technical resistance level was hit in 2017 and 2021, resulting in a pullback of more than 80%.Bitcoin hit this level in 2025 (high $122,946) but encountered a slight rejection, and low trading volumes indicate caution.However, several factors suggest a possible breakthrough:
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Enterprise adoption: More than 130 companies, including MicroStrategy and possibly Trump Media, have used Bitcoin as an asset reserve, and Japan’s Metaplanet plans to increase its 10,000 BTC reserves fivefold.Institutional purchases and retail enthusiasm have caused an imbalance in supply and demand, and the BTC absorbed by ETFs far exceeds the mining volume.
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Political success: The Trump administration’s stance on supporting cryptocurrencies, including the proposed U.S. strategic Bitcoin reserves and the White House cryptocurrency summit, boosted market sentiment.However, Trump’s tariff policy triggered volatility, with Bitcoin falling 17% to $78,103 in February 2025 on trade concerns.
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On-chain dynamics: Glassnode data shows that the accumulation model of large investors (>10,000 BTC), medium-sized traders and retail investors is consistent with the breakthrough period.The decline in exchange balance further indicates tight supply.
Breakthroughs of the “death line” could bring Bitcoin’s target price to $150,000-$200,000, as predicted by Max Keiser and Chamath Palihapitiya, driven by demand for 21 million hardtops and ETFs.Conversely, failure to break through this level, coupled with macro headwinds (e.g., Fed hawks cut interest rates, correlation with Nasdaq 0.88), could trigger a pullback to $65,000-80,000, as Schiff warned.
Market Relevance and Financial Report Season
The interaction between stocks, commodities and cryptocurrencies highlights the wider struggle.The S&P 500 and Nasdaq set records in July 2025 and were overbought, with only 11% of similar situations remaining bullish after three days, according to Subu Trade.The earnings season started with Tesla and Google, with market expectations perfect, with Kingman Sachs reporting bullish sentiment reaching unprecedented levels.However, the performance of the “buy expectations, sell facts” model (such as Netflix) and Google’s low forward-looking PE ratio (23) in AI and geopolitical risks suggests volatility.
In terms of commodities, gold and silver are breaking through, with a target price of US$4,000 and a target price of US$42-43, reflecting defensive positioning.Rare earth minerals required for artificial intelligence hardware are expected to set off a craze in the next decade as countries compete for supply.China’s liquidity injection has driven stocks such as Yinn CQ, indicating that funds are rotating towards emerging markets.
Views: Results in 2025
Retail investors have the upper hand in short-term momentum, especially in the cryptocurrency field. Their coordinated purchases and corporate support may break through the “death line” and trigger a short squeeze on Wall Street shorts.However, Wall Street’s capital, dark pool operations and ability to deal with volatility give it an advantage in the long-term pullback.The overbought status of the S&P 500 and the VIX surge suggest that a short-term pullback may be consistent with Bitcoin’s failure at resistance levels if macro pressures (such as tariffs, Fed policies) intensify.
In order for retail investors to “win”, continuous coordination and trading volume are crucial, especially in breaking through key technical levels.Wall Street relies on mean regression and soaring volatility, using cash reserves to buy lows.My point of view is that 2025 will be a year of drastic volatility, with retail investors going to achieve tactical victories (such as cryptocurrency short squeeze), but unless there is a black swan event (such as large-scale ETF inflows or regulatory shifts), Wall Street’s strategic depth will prevail.Investors should remain flexible and focus on Bitcoin’s $120,000-125,000 level, S&P 6,350 call options and earnings catalysts for directional clues.
In short, 2025 is a high-risk chess game.The enthusiasm of retail investors meets Wall Street’s pragmatism. Although the “death line” is crucial, the result depends on trading volume, macro stability and who will give in first.
