Let's review the process of the market's flash crash; many people may be confused by this wave of decline.

Last Friday, the market was still immersed in the optimism brought by Powell's speech, and $ETH broke through new highs over the weekend.

However, within less than 48 hours, BTC and ETH both experienced a flash crash.

The cause was a giant whale transferring about 24,000 BTC to an exchange and conducting a large-scale sell-off.

This massive sell order triggered a price drop within 20 minutes, and the downward trend continued until Tuesday, with BTC's price once dipping below $110,000.

The crash triggered a chain liquidation, forcing hundreds of millions of dollars in leveraged long positions across the market to be liquidated (mainstream estimates range from $550 million to $840 million).

Previously, U.S. spot Bitcoin ETFs had seen net outflows for six consecutive trading days, with over $1.4 billion in net outflows from cryptocurrency investment products last week.

In fact, this sell order of 24,000 BTC might not have been able to penetrate multiple layers of buy orders during the work week. However, the rapid price drop broke through key technical support, causing a large number of highly leveraged long positions to hit liquidation lines, and these forced sell orders flooded the market, accelerating the price decline and forming a classic vicious cycle in the crypto space.

Additionally, one of the most important indicators in the crypto market—BTC ETF net inflows—turned negative, prompting some institutions to take a short-term bearish view on the crypto market.

Interestingly, the biggest victim in this decline was actually ETH. Since many accounts use a unified margin, when BTC sharply dropped, causing a shrink in account equity, ETH longs were also liquidated. It can be said that ETH was 'pulled up' during the BTC decline, effectively taking the hit for BTC.

Moreover, market makers are accustomed to pairing BTC and ETH for market making; when BTC broke down, institutions reduced their positions, and ETH also followed suit, leading to a correlated decline in both.