#加密市场观察 Why did the Crypto Assets fall so hard this time? In simple terms, this big dump was not caused by a single reason, but rather by several issues exploding together, somewhat like a leaky house coinciding with continuous rain. Firstly, the overall environment is not very supportive; recently, the market has become less optimistic about the Fed's interest rate cuts. When officials express concerns about inflation, everyone feels that the era of cheap money may take a little longer, which is not good news for high-risk assets like Bitcoin. Additionally, some key economic data from the U.S. is also not forthcoming, leaving the market feeling uncertain. Many large institutions have chosen to wait and see, or simply withdraw some funds to avoid risks. Then, within the Crypto Assets market, there were also internal issues; the two important forces that previously supported the coin price are weakening. One is that the funds buying Bitcoin Spot ETFs are not only not flowing in but are also flowing out. The other is that those Crypto Veterans who have held their coins for a long time are also starting to sell, and the scale of selling is not small. This is akin to the load-bearing wall of a house starting to loosen.

Interestingly, data shows that this wave of decline is primarily driven by American retail investors selling, indicating a lack of confidence among everyone. The most severe impact comes from a chain of liquidations triggered by high leverage. Previously, too many people in the market borrowed money to leverage their bullish positions, and when the price suddenly fell, the system automatically liquidated their positions. This is called liquidation. Looking at the data, it’s clear that over the past 24 hours, more than 1 billion USD has been liquidated, with over 85% of that coming from bullish positions. This creates a death spiral: prices fall, longs get liquidated, the system sells automatically, selling pressure increases, and prices continue to fall, like a domino effect.
Finally, there is a potential deep risk. Over the past year, many institutions have been aggressively buying coins through something called digital asset vaults, which relies on borrowing money. Now that the lending environment has tightened, they may be forced to sell coins to repay debts, which is like a thunder that could strike at any time. So to summarize, the macro situation is weak, internal funds are retreating, retail investors lack confidence, and coupled with high leverage being wiped out in one go, these factors have contributed to this big dump. Currently, everyone is paying attention to the next important support level for Bitcoin, which is around $93,000. If this level cannot hold, we may have to look further down. In short, market sentiment is quite fragile right now, and we need to be wary of these chain reactions.