Revisiting today five years ago, the 'Black Swan of 312' in the cryptocurrency world seems to be still vivid. March 12, 2020, has become an eternal pain in the hearts of most people and a memorial day remembered by those in the crypto space.#btc
1. Market Background:
In March 2020, the COVID-19 pandemic spread rapidly around the world, plunging the global economy into panic. Traditional financial markets such as US stocks, crude oil, and A-shares all crashed, and market liquidity dried up. Against this backdrop, Bitcoin also could not escape unscathed, and market panic quickly spread to the crypto world.
2. Bitcoin Plunge:
Around 6 PM on March 12, 2020, the price of Bitcoin began to plummet from around $7900, dropping from $7300 to $5555 in just half an hour, a decline of nearly 24%. Subsequently, Bitcoin continued to fall, breaking through several key support levels including $6000 and $5000. Around 4 AM on March 13, Bitcoin again experienced a significant drop, sliding from $6000 to $4350, and earlier it had briefly fallen to a low of $3800. Over the entire 24 hours, Bitcoin's decline exceeded 48%, marking the largest single-day drop in recent years.
3. Chain Reaction:
1. Contract Liquidation: Within 24 hours, the total liquidation amount across the network exceeded $3.8 billion, with over 100,000 contracts forcefully liquidated, especially impacting long positions. Many trading platforms crashed or experienced delays due to excessive trading volume, preventing users from timely replenishing their positions or buying the dip.
2. Market Stampede: Due to the rapid price decline, a stampede effect occurred in the market, causing Bitcoin's price to breach multiple key levels in a short period.
3. Platform Intervention: Many trading platforms suspended trading due to extreme market volatility, a practice colloquially known as 'pulling the plug'. This action stabilized the market to some extent, but also sparked controversy.
Looking back at this crash, it was not only the 'Black Thursday' of the crypto world but also a microcosm of turmoil in the global financial markets. The uncertainty of the pandemic, the spread of market panic, and the hidden dangers of high-leverage trading collectively led to this disaster. However, this crash also reminds us that market risks are everywhere, and respecting the market and controlling risks is the eternal theme of investment.
Today, Bitcoin has become the eighth-largest asset globally. Yet, the '312' event remains a scar in the hearts of many and serves as a mirror, reminding every investor: no matter how prosperous the market may seem, risk control is always the top priority.
