Is the liquidity in the secondary market sufficient?

In addition to being related to central bank interest rate policies and economic strength,

it is also related to the overall valuation of the secondary market.

For example,

when the market capitalization of core assets is 1 trillion USD,

if there are over 100 billion USD in the market, it can lead to a significant rise.

When the market capitalization of core assets is 10 trillion USD,

it requires over 1 trillion USD to drive it up further.

When market liquidity is abundant,

it doesn't matter whether your position is short or long,

everyone is providing the necessary factors for the corresponding assets to rise.

Because short positions will eventually need to buy back to close.

For assets with many derivatives,

in a situation of ample market liquidity,

every significant drop is a good opportunity to enter.

The reason to avoid chasing highs is that short-term movements may lead to short squeezes,

or due to emotions causing a large leverage increase.

Short-term explosive short and long trends brought about by high leverage

are difficult to sustain.

When market liquidity begins to dry up,

every drop will lead to a new systemic crisis,

until the market's leveraged large positions are tested.

Liquidity will improve again,

and a new game of passing the parcel begins.