My brother first let me say you are a good dad. Your wife is a good mother. The fact that you are still in the fight tells that. My sister suffered from this. She ran away from home the first time when she was twelve. Stole my moms wedding ring and the engagement ring that had been passed down thru 7 generations and pawned them to buy heroin when she was 14. My poor mother went thru hell with her. She had three kids that were all taken by the state, spent 4.5 yrs in prison for possession of cocaine and at 30 yrs old, having been out of prison and sober, finally looking like she was getting it all figured out a bit, she was run over by a drunk driver at 2 in the afternoon while crossing the street, in a crosswalk. And he got less time than she did for possession. Yeah, life can be a stone cold ***** sometimes. Unfortunately my front row seat didn't give me any answers for you. I think others have given you some good advice, you need to heal yourself first. Find ways for your wife and you to have some space and time to just be. Cherish the good one, sacrifice the time you give the older daughter before you sacrifice hers. Hardest thing is to accept that it's not your fault. And no matter how bad it hurts dad, you can't fix it for her. YOU CAN"T. Help your wife to understand those things too. All you can do is exactly what you are doing, let her know she is loved and valued, but also that she has to respect your wife and her sister. Draw clear lines for everyone, you have 2 rules for her, help your wife and draw some lines for her to. Be there with arms wide open to help pick up the pieces but you have to stick to the limits that keep the rest of the family whole. Not easy brah, hopefully a good hard reality check can at least open her eyes and allow her to seek healing for herself too.