The cryptocurrency market experienced a sudden collapse.
Many traders raised questions about the nature of this unprecedented fall. The decline was not just a normal corrective movement resulting from the usual market fluctuations; rather, it was the result of a calculated and systematic manipulation by some major platforms, led by **ByBit**.
#### **What happened?**
Initially, ByBit and other similar platforms offered high leverage and massive liquidity, attracting traders eager for quick profits. However, these temptations came with significant risks. As forced liquidations increased due to market instability, platforms began to suffer severe losses. To compensate for these losses, they resorted to a dangerous strategy: unexpectedly and abruptly moving the market to liquidate excessive leveraged contracts.
#### **How did platforms manipulate the market?**
1. **Systematic liquidations:**
When a large percentage of contracts are open in one direction (whether buy or sell positions), platforms reduce available liquidity, leading to pushing prices towards broad liquidation levels. This allows them to recover the funds they provided as leverage.
2. **Hitting stop-loss levels:**
By employing advanced techniques, platforms create rapid and irrational fluctuations, pushing prices below or above stop-loss levels temporarily. After that, the market returns to its normal path, but it is too late for the traders who were liquidated.
3. **Creating media panic:**
Alongside these movements, negative or misleading news about the market is spread, such as predictions of a larger collapse or liquidity issues in some projects. This incites panic among small investors, prompting them to sell their assets at a loss. At this moment, large institutions benefit from buying assets at low prices.
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#### **Who benefits?**
In this scenario, only one category lost: individual traders. The entities that emerged as winners were the major platforms and big market makers, who benefited from these movements to strengthen their balance sheets at the expense of others' losses. They successfully recovered the liquidity they provided as leverage, in addition to purchasing assets at discounted prices after the market crash.
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### **What is the solution?**
To avoid falling victim to these systematic strategies, traders can follow some critical steps:
1. **Reduce reliance on leverage:**
Using high leverage makes an account more susceptible to liquidation during any sharp market movement. Therefore, it is better to limit leverage usage or avoid it altogether if possible.
2. **Do not get carried away by emotion:**
Markets are characterized by sharp volatility, and the key to sustainability is adhering to a clear and well-thought-out trading strategy. Decisions should be avoided based on panic or unjustified excitement.
3. **Diversifying portfolios and platforms:**
Not putting all funds on one platform significantly reduces the risk of sudden liquidation. Distributing assets across multiple platforms and using secure digital wallets can provide an additional degree of protection.
4. **Continuous learning:**
The digital market is in constant evolution, and it is essential to keep up with the latest trading strategies and protection methods. Understanding how platforms and markets operate gives traders a significant advantage.
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**Summary**
The collapse of the cryptocurrency market was not merely the result of natural fluctuations; it was the result of deliberate manipulation by major platforms that exploited the conditions to gain profits at the expense of small traders. The game is still ongoing, and every participant must be aware of the rules and act with caution.
Survival in this complex world depends on a deep understanding of the market, adherence to a well-thought-out strategy, and avoiding falling into manipulation traps. Only those who understand the rules well and act wisely will be able to achieve success and sustainability in the world of cryptocurrencies.