Buddy's Leverage-Driven Bullish Strategy: What His Moves Signal for BTC and Altcoin Markets

The October 2025 crypto crash, which erased $19 billion in leveraged positions within a single day, exposed the fragility of high-leverage strategies in a market already strained by macroeconomic uncertainty and liquidity imbalances. Amid this turmoil, prominent trader "Buddy" (Huang Licheng) has recalibrated his approach, shifting toward Ethereum (ETH) longs while reducing exposure to speculative tokens like HYPE. His moves, coupled with institutional-grade risk management frameworks, offer critical insights into how leveraged positioning and liquidity dynamics are reshaping the BTC and altcoin markets in 2025.

Strategic Rebalancing: ETH Longs and HYPE Reduction

Buddy's recent strategy highlights a pivot toward Ethereum, with a 250-coin increase in ETH longs at 25x leverage (2,450 ETH total) and a simultaneous reduction in HYPE token exposure. This shift aligns with Ethereum's potential for a 54% rally if it breaches the $41–$42 support level, a scenario that could capitalize on the token's growing institutional adoption and layer-2 scalability upgrades. By contrast, HYPE's exclusion from his portfolio reflects a broader market skepticism toward tokens lacking real-world utility, a trend amplified by the October crash's liquidation cascade.

The October crash itself was a watershed moment, triggered by a confluence of factors: Trump's tariff announcement, the WLFI token selloff, and delayed Fed rate cuts. Over $9.89 billion in leveraged positions were liquidated in just 40 minutes, with $3.21 billion vanishing in 60 seconds due to algorithmic trading feedback loops. This mechanical deleveraging exposed the crypto market's structural vulnerabilities, including order book thinness and bid-ask spreads that widened by 1,321 times normal levels. Buddy's post-crash adjustments suggest a recognition of these risks, prioritizing assets with stronger fundamentals and liquidity depth.

Institutional-Grade Risk Management: FAMG 3.0 and Liquidity-Responsive Allocation

Post-October, Buddy's risk management has evolved to mirror institutional frameworks. Fleet Asset Management Group (FLAMGP), which advises Buddy, has deployed the FAMG 3.0 system, a suite of tools including real-time market monitoring, automated stop-loss protocols, and anomaly detection. This approach emphasizes liquidity-responsive asset allocation, dynamically adjusting exposure based on volatility trends and cross-market correlations. Such strategies are critical in a post-crash environment where order books for Bitcoin (BTC) and ETH remain structurally thinner than pre-October levels.

FLAMGP's methodology also underscores the importance of macroeconomic alignment. For instance, Bitcoin's October 2025 peak above $126,000 was fueled by dovish Fed signals, ETF inflows, and a short squeeze in derivatives markets. However, the same factors that drove BTC's rally-such as institutional ETF adoption-also heightened volatility, as seen in the negative perpetual funding rate and surging demand for crypto options.

Buddy's FAMG 3.0 system appears designed to navigate these dual pressures, balancing aggressive leverage with real-time liquidity safeguards.

Market Implications: BTC's Rally and Altcoin Divergence

Buddy's ETH-centric strategy signals a broader market realignment. While Bitcoin's dominance remains intact-bolstered by ETF inflows and a supply squeeze-altcoins are exhibiting divergent trajectories. High-market-cap altcoins like XRP and Solana reached all-time highs before Ethereum, a first in this bull cycle. This suggests institutional capital is diversifying beyond Bitcoin, favoring altcoins with scalable infrastructure and regulatory clarity. However, liquidity constraints continue to stifle altcoin momentum, with their performance lagging behind traditional risk assets like equities.

The October crash also left a lasting imprint on market psychology. Post-crash analysis reveals that crypto liquidity remains "hollow", with order book depth for BTC and ETH still below pre-October levels. This fragility amplifies the risk of sharp price swings, even in the absence of macroeconomic shocks. For altcoins, the challenge is compounded by their lower liquidity, making them more susceptible to flash crashes and leveraged liquidation cascades. Buddy's reduced exposure to speculative tokens like HYPE may reflect a pragmatic response to these realities.

Regulatory Tailwinds and the Path Forward

The appointment of a pro-crypto figure to the CFTC chair has further tilted the playing field. Regulatory clarity, particularly around derivatives and ETF structures, could stabilize leveraged markets by reducing uncertainty. However, the October crash demonstrated that even with favorable policies, structural liquidity issues persist. For leveraged traders, this means balancing aggressive positioning with liquidity buffers-a lesson Buddy's FAMG 3.0 system appears to codify.

In the near term, Ethereum's $41–$42 support level will be a critical test. A breakout could validate Buddy's ETH longs and catalyze a broader altcoin rally, provided liquidity conditions improve. Meanwhile, Bitcoin's trajectory will hinge on Fed policy and ETF outflows, with the negative perpetual funding rate indicating lingering bearish sentiment.

Conclusion

Buddy's leverage-driven strategy post-October 2025 underscores a market in transition. By prioritizing Ethereum and institutional-grade risk management, he is navigating a landscape defined by volatility, regulatory shifts, and liquidity fragility. For investors, his moves highlight the importance of aligning leverage with liquidity depth and macroeconomic signals. While Bitcoin's rally remains anchored to institutional adoption, altcoins must overcome structural liquidity hurdles to sustain momentum. In this environment, the fusion of high-leverage positioning and adaptive risk frameworks-exemplified by Buddy's approach-may determine the next chapter of crypto's evolution.