The market is experiencing severe fluctuations, and cryptocurrency prices have plummeted. The year hasn't even started well, and negative sentiment is flooding in. Traders are busy cutting positions in various digital assets. Bitcoin suddenly dropped, at one point falling more than 6%. The second-largest digital asset, Ethereum, experienced a drop of 27% for a while, marking the largest single-day drop for Ethereum since May 2021. Many mainstream cryptocurrencies have fallen to their lowest points in recent weeks. The altcoin market is even worse, with particularly strong selling sentiment, and investors' confidence has collapsed, making the entire market a disaster.

Historically, the cryptocurrency market has also experienced several significant fluctuations. For example, in August 2024, the price of Bitcoin fell below $53,000, evaporating $510 billion in market value within three days, and then Bitcoin fell below the psychological barrier of $50,000. However, compared to yesterday's fluctuations, while these movements were significant, they did not reach the intensity of yesterday's events. In yesterday's market, the drop in Bitcoin and Ethereum, as well as the speed of market panic spreading, exceeded previous fluctuations.

According to CoinGlass's market data, in the past 24 hours, there have been 720,000 liquidations in the cryptocurrency market, with a total liquidation amount reaching $2.21 billion. Among these, the liquidation amount for long positions is $1.87 billion, while for short positions, it is $340 million. This data is comparable to the scale of liquidations caused by some major historical events. In the context of severe market fluctuations, the risks of leveraged trading are magnified. Many investors have suffered significant financial losses in a short period, with some even losing everything. For instance, some investors leveraged long positions when Bitcoin prices were at their peak, and as prices plummeted, their positions were quickly liquidated, resulting in heavy losses. Meanwhile, some investors who leveraged short positions at the lows also faced substantial losses as prices rebounded.

First, long positions were liquidated, then short positions. After the crash, the cryptocurrency market rebounded sharply during the trading session. Bitcoin rebounded to break $102,000 in the morning, with an increase of over 4%; Ethereum also rebounded to break $2,900. Such a dramatic rebound caught many investors off guard, and shorts were continuously liquidated. First, the leveraged longs were liquidated, and after the longs were done, the leveraged shorts were liquidated. This situation of both longs and shorts being cleaned up left the entire market unprepared.

The uncertainty in the cryptocurrency market is still particularly high. Trump's tariff policy has scared the market enough to prompt investors to quickly sell off risk assets. As an emerging market, the cryptocurrency market itself is quite volatile, and any influence from external factors can easily lead to significant fluctuations. As the saying goes, the crypto space is essentially a gamble, with very few people getting out. The rapid wealth and bankruptcy of many can happen in an instant. Pay attention to asset planning and limit contract trading.

In the crypto space, luck determines whether you can catch lightning, while greed determines whether you can survive the storm until the next rainy season.

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