Review of the Core Reasons for 'Black Thursday' on March 12
The main reasons for the sharp decline on March 12, 2020—global financial turmoil, leveraged trading, and regulatory uncertainty—occurred just as the COVID-19 pandemic began to spiral out of control. Traditional markets like US stocks triggered circuit breakers, leading investors to panic sell all high-risk assets, and Bitcoin was no exception. Leveraged trading exacerbated the situation, with too many high-leverage players in the crypto market at the time (some platforms even offered 1000x leverage), triggering a chain of liquidations as prices fell, which accelerated the crash. As for regulation.
At the beginning of 2020, countries had unclear attitudes toward cryptocurrencies, and the market was particularly sensitive to policy shifts. Bitcoin plummeted from $8,000 to $3,620, with a nearly 50% drop within 24 hours, marking a 'bloody memory' in the crypto world.
By the way, regarding the current market situation, the positive news about BTC's ETF in 2024 has indeed pushed the market to new heights. The milestone of $100,000 is not just a number but also a psychological barrier. In recent months, the market has entered a volatile period, with Bitcoin fluctuating between $90,000 and $100,000. Some are shouting, 'End of the bull market, better run,' while others optimistically say, 'This is a buildup, and the next surge will reach $120,000.' Such divergence is actually quite normal, reflecting the instability of market sentiment.
Several external factors have also contributed to the instability in the crypto world:
Global Economic Uncertainty: The global economy is still struggling to fully recover from the shadows of the pandemic by 2025, with inflation, supply chain issues, and geopolitical conflicts potentially dragging it down.
Monetary Policy Adjustments: If the Federal Reserve continues its hawkish stance (raising interest rates or not cutting them), the pressure on risk assets will increase; conversely, cutting rates could be a lifeline, but the likelihood of that happening now seems low.
Regulatory Trends: Countries' attitudes toward cryptocurrencies remain wobbly, with the policies of the new US government not yet fully clarified, and signs of tightening emerging in Asia as well.
In the short term, altcoins have not surged, which is related to the high dominance of BTC. Currently, funds are still focused on Bitcoin (BTC), and the altcoin season may only unfold once it stabilizes.
