BREAKING BREAKING BREAKING 💫
JUST IN: $140,000,000,000 wiped out from the crypto market cap in the past 4 hours💡
The cryptocurrency market started the weekend with a shock as Bitcoin suddenly fell more than $4,000 in just a few minutes. According to market data, more than USD 400 million in leveraged long positions were "wiped out" within 60 minutes. The Kobeissi Letter assesses this as a direct consequence of low liquidity and high-risk leverage levels, rather than the result of any news or changes in fundamental factors.
According to The Kobeissi Letter's assessment, in 2025, the cryptocurrency market will be constantly subject to strong fluctuations on Friday and Sunday evenings. These are hours known for their low liquidity, limited order depth, and reduced trading activity.
This development follows an old pattern:
No negative news or unusual macro events
Trading volumes drop sharply at the end of the week
Large sales sufficient to drive down prices trigger a chain reaction across the market. Thin liquidity has become the main factor allowing for "deep dives" in Bitcoin prices without any fundamental factors.
Against the backdrop of low liquidity, the cryptocurrency market currently maintains high levels of margin positions. This makes the price vulnerable to minor fluctuations.
When Bitcoin starts to decline:
Long positions are activated at the liquidation level
Automatic sales are constantly entering the market
The price declines faster due to the leverage wipeout model
Investors panic sell, making the depth of orders even smaller
Although the price has fallen sharply, Kobeissi Letter believes that this is not a bad sign in terms of the fundamentals of Bitcoin or the crypto industry as a whole. Instead, new structural factors are at the root of the problem:
Liquidity across the market is low due to defensive psychology
Investors are using excessive leverage
Trading volumes declined at the end of the week, leading to increased volatility.
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